The European Commission’s ‘Fit for 55’ package and the US Department of Energy’s Earthshot programme, which were both announced this summer, identify the use of hydrogen as an energy source as key to achieving carbon dioxide emissions reductions in hard-to-abate sectors. Ballard is well placed to benefit from greater hydrogen adoption since it has already commercialised its fuel cell technology, and the c 3,500 buses and trucks powered by its fuel cells have driven over 100m kilometres between them. Importantly, Ballard is focused on heavy- and medium-duty motive applications including bus, truck, rail and marine, where fuel cells are a compelling zero-emission option because of range and refuelling times.
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Ballard Power Systems |
Decarbonising heavy-duty mobility
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Alternative energy |
Deutsches Eigenkapitalforum 2021
25 October 2021 |
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The European Commission’s ‘Fit for 55’ package and the US Department of Energy’s Earthshot programme, which were both announced this summer, identify the use of hydrogen as an energy source as key to achieving carbon dioxide emissions reductions in hard-to-abate sectors. Ballard is well placed to benefit from greater hydrogen adoption since it has already commercialised its fuel cell technology, and the c 3,500 buses and trucks powered by its fuel cells have driven over 100m kilometres between them. Importantly, Ballard is focused on heavy- and medium-duty motive applications including bus, truck, rail and marine, where fuel cells are a compelling zero-emission option because of range and refuelling times.
Increasing penetration of bus and truck markets
Over three-quarters of Ballard’s revenues are attributable to the heavy-duty transportation sector. Around half of these are from sales of fuel cell modules to companies such as Weichai Ballard, Wrightbus, Solaris, New Flyer and Van Hool to power buses and trucks in China, the UK, the Netherlands, Germany and California. The other half are attributable to customer development programmes including ongoing work with the Weichai Ballard JV, Siemens and Audi.
Initiatives underpinning future growth
Ballard is increasing its investment in the design and development of new fuel cell stacks and modules, while working on reducing the costs of existing products. Its new FCmove-HD+ high-power density fuel cell stack for buses and trucks is more than 40% more compact and over 30% lighter than its previous 100kW module and has 50% fewer component parts, resulting in an estimated 40% improvement in total lifecycle cost, encouraging adoption. The company continues to form strategic partnerships with leading companies in key target markets and verticals. For example, it is working with electric vehicle integrator QUANTRON, on fuel cell electric trucks for initial delivery in the second half of 2022, and with smart battery experts Forsee Power on fully integrated solutions combining a fuel cell and a battery system for heavy-duty mobility applications.
Still to reach cash break-even
Ballard is not yet profitable or cash generative. Total H121 revenues were US$42.6m, generating a US$33.6m adjusted EBITDA loss. Free cash outflow (including capex and investment in the JV) totalled US$48.0m, offset by a deal offering in February raising US$527m at US$37.0/share.
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Consensus estimates
Source: Refinitiv |
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Research: TMT
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