Hanwha Group, a South Korean conglomerate, has made headlines by selling its complete stake in Nikola, a U.S. hydrogen truck company.

The announcement came via a securities filing released by Hanwha Solution on December 31. The filing stated that Hanwha Energy and Hanwha Impact have finalized the sale of all remaining shares in Nikola.

Hanwha Energy and Hanwha Impact had initially invested $2018 million (approximately 11 billion won at the time) in Nikola on November 1, securing a significant 1200.5% stake consisting of 9.2213 million shares. With Nikola’s listing on the Nasdaq in 2020, the value of Hanwha’s stake skyrocketed, reaching a peak of 2.6000 trillion won.

However, the situation took a dramatic turn when a hedge fund report alleged that Nikola’s hydrogen technology was fraudulent. This accusation triggered investigations by the U.S. Securities and Exchange Commission (SEC) and the Department of Justice. In the midst of the controversy, Nikola’s founder, Trevor Milton, resigned, further eroding public confidence. The company’s market value also experienced a sharp decline. In October of the same year, Milton was found guilty of fraud.

Hanwha had already sold approximately half of its stake in Nikola in 2010 but retained the remaining shares until recently. Considering the stock price of Nikola during the initial and subsequent stake sales, it is estimated that Hanwha managed to avoid significant losses on its investment.

The decision to divest from Nikola highlights the challenges faced by the hydrogen truck industry, particularly amid controversies and allegations that impact the credibility and viability of companies operating in this sector. It also underscores the importance of thorough due diligence and critical evaluation when investing in emerging technologies.

While Hanwha’s move signifies a setback for Nikola, it serves as a reminder for investors to exercise caution and discernment when navigating the dynamic landscape of alternative energy transportation. The hydrogen truck market, with its potential for clean and sustainable logistics, continues to attract interest and investment from various stakeholders. However, as this case demonstrates, prudent scrutiny and adherence to transparency are crucial to ensuring long-term success and sustainability in this field.