Fuel-cell truck startup Hyzon agrees to merge with decarbonization plus SPAC

Ed Ludlow and Gillian Tan
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Hyzon Motors Inc., a fuel cell truck startup, has agreed to go public via a merger with Decarbonization Plus Acquisition Corp., according to people with knowledge of the matter.

The special purpose acquisition company has held discussions about raising new equity to support the transaction that values the combined entity at more than $2 billion, some of the people said, requesting anonymity because the talks are private. A deal could be announced within the next week.

Representatives for Hyzon and Decarbonization Plus declined to comment. Shares of the SPAC pared a gain of as much as 26% in early trading Friday, trading up 18% to $16.25 as of 10:22 a.m. in New York.

This rendering shows a Hyzon Motors' heavy-duty truck.

Decarbonization Plus, a vehicle sponsored by an affiliate of private equity firm Riverstone Holdings and led by Erik Anderson, raised about $226 million in an October initial public offering. It said at the time it wanted to find a target “whose principal effort is developing and advancing a platform that decarbonizes the most carbon-intensive sectors.”

Hyzon was spun out of Singapore-based Horizon Fuel Cell Technologies Pte, which has been developing fuel-cell technology for commercial applications for almost 20 years. The startup, which counts Total SE among its investors, makes hydrogen-powered big rigs, buses and coaches.

The use of hydrogen and fuel-cell technology in commercial vehicles isn’t new. However, investor interest has intensified since U.S. startup Nikola Corp. listed its shares in early June with the help of blank-check company VectoIQ Acquisition Corp. Despite zero revenue, Nikola quickly saw its market value surge as high as $28.8 billion before sliding back to its current valuation of about $9 billion. Nikola has promised global fleets of hydrogen fuel-cell semi trucks and other commercial vehicles that it plans to build from 2023.

According to BloombergNEF, fuel-cell vehicles could to capture as much as 30% of bus-fleet volume globally by 2050 and as much as 75% of heavy-vehicle fleets, with growth driven primarily by demand from China and the European Union.

This rendering shows a Hyzon Motors' medium-duty truck.

Hyzon is headquartered at a former General Motors Co. facility in Honeoye Falls, New York. In July, it announced plans for a plant in the Netherlands as part of a joint venture with Holthausen Clean Technology BV. It also has unspecified manufacturing activities with an undisclosed partner in Shanghai, and operations in Australasia.

Hyzon says it already has more than 400 commercial vehicles on the road using its fuel cell technology. It expects to deliver about 5,000 fuel cell-powered trucks and buses by 2023 and is targeting annual capacity of around 40,000 fuel cell-electric vehicles by 2025. In August, Hyzon inked a deal with Australian mining company Fortescue Metals Group Ltd. to build a fleet of hydrogen fuel cell buses.

EV companies including Fisker Inc. and Arrival Ltd. have agreed to go public through SPAC mergers.

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