Hydrogen and Fuel Cell Technology Taking Off, Ballard Aims for $130 Billion Heavy and Medium Duty Vehicles Market

by Helena Tavares Kennedy (Biofuels Digest) Ballard just hosted a 5-hour analyst day with no breaks and there was a lot to unpack in terms of how the company intends to apply fuel cells in the bus, truck, trains and even marine sectors. But the key message was the huge expanding fuel cell and hydrogen market applications – specifically the Heavy and Medium Duty vehicles market estimated at $130 billion in the next 10 years.

They talked about Ballard’s strategic plan – including 3 key market opportunities for them, China, Europe and California – as well as progress across a number of commercial, technology and operational fronts.

And if you aren’t’ already familiar with how promising hydrogen and fuel cells are for the world, check out the U.S. Department of Energy’s “5 Fast Facts about Hydrogen and Fuel Cells” which covers things like hydrogen being the most abundant element on earth, how fuel cells can be used to power a huge variety of applications and be grid-independent, and more. You can also find the latest on the DOE’s involvement in Hydrogen and Fuel Cell Technology here.

“We came away from the 5-hour analyst day with no breaks impressed with the progress Ballard has made and anticipates making in the future around cost reductions, which will unlock new applications. Certainly policy in Europe, China and California is moving to support hydrogen for heavy duty/high horsepower applications. Ballard appears very well positioned in China given its 49% ownership in the Weichai JV that will help further penetrate trucks and buses in the region. We like the setup for China, but anticipate that to be the most price aggressive and lowest margin region for Ballard in the years ahead. The MAHLE development and strategic partnership shows the power of the Ballard reach; however, we were hoping for more “meat on the bone” on how Ballard will penetrate Europe where the market is ultra competitive with many existing partnerships (Alstom/Cummins, CNH/Nikola, Daimler/Volvo, etc.) Europe is throwing around a lot of money at hydrogen as part of COVID-19 stimulus. We believe any M&A BLDP is pursuing should be focused on this region with aim of broadening out beyond their strength in bus. The 2030 “financial vision” appears achievable in our view and the margin commentary is largely aligned with what PLUG is achieving today in its product segment with GM over 30% and a 20%+ EBITDA margin as part of their ’24 guidance.”

Shell published a 25-page shipping decarbonization report that highlighted hydrogen and fuel cells as a winner, winner, chicken dinner, saying “Shell will seek to advance its research in this area, as hydrogen is projected to benefit from build-out across other industry and transport sectors, making it potentially more cost competitive than alternative zero-emissions fuels,” and “We believe liquid hydrogen to be advantaged over other potential zero-emissions fuels for shipping, therefore giving a higher likelihood of success.”

And look at Honda’s announcement just a few days ago that they will withdraw from Formula One as an engine supplier so they can focus more of its R&D towards “areas of future power unit and energy technologies, including fuel cell vehicle (FCV) and battery EV (BEV) technologies, which will be the core of carbon-free technologies.” READ MORE