The Plug share price fell quickly to under 3 USD (2.50 USD at low) and then rose again to over 4 USD. At a price of less than 3 USD, it was possible to build up excellent trading positions (see H2-international Feb. 2024). Is there now a turnaround in the price trend or was this just a brief flare-up before the downward trend continues? Or will there even be an upward trend reversal?
There is a great opportunity for Plug Power to receive a credit (loan) totaling 1.6 billion USD from the US Department of Energy (DOE) as part of the Inflation Reduction Act. This is to come in the third quarter, although there are also rumors that it could be approved much earlier, but I won’t take part in this speculation. In this ideal scenario Plug will then have sufficient capital to establish and expand several production facilities, for example in Tennessee and New York, and start production there. The stock market will value this – if it happens – very positively: with higher share prices.
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But a loan is borrowed capital that has to be repaid. What are the conditions? How high is the interest or coupon? What are the repayment arrangements? Will the loan be paid out immediately in full or in installments and with target definitions (milestones)? What is Plug doing with the money? If there is no clarity about this or the loan is not approved in the first place, then the stock market will be miffed or react in disappointment, with the consequence of falling share prices.
Parallel to this is running a share placement program (at-the-market) worth 1 billion USD. Of this, already over 305 million USD, through the placement of 77.4 million shares, have flowed into Plug’s account. This will also correlate positively with the DOE credit: If this is granted, Plug’s share price will – even if possibly only for a short time – climb, and this then enables the perfect placement of shares via ATM in the ramp-up. This money from the ATM program can be used to solve the short-term liquidity problem, since the cash on hand lay at just 135 million USD December 31, 2023.
There are also other possible difficulties, because the US Treasury Department is defining how hydrogen must be produced in order to receive the subsidy of up to 3 USD per kg. Plug is relying very heavily on this funding, but there are still questions: From which location must the regenerative energy come from, in what amount and at what point in time? And at which location must the electrolysis take place? With this are, like in the EU, a series of bureaucratic hurdles – unfortunately.
Disappointing figures
What are these figures: The turnover in fiscal year 2023 amounted to, instead of the expected 1.2 billion USD, only 891 million USD. The loss even amounted to 1.4 billion USD, which corresponds to a minus of 2.30 USD per share. The press conference on the results in March raised more questions than it answered.
For example, the material inventory is to be reduced by a value of 700 million USD via the delivery of finished products to customers. Whereas in 2023 only 400 million USD was invested in this area, no more capital is to flow into here in 2024.
The production at locations such as Georgia, Tennessee and Louisiana is to be ramped up and contribute to an increase in the profit margin. These sites are already capable of producing liquid hydrogen for the company itself and supplying it to customers. The Texas and New York sites will only be continued once the DOE loan has been approved, as otherwise they tie up too much liquidity.
In addition, there is to be price raisings (among others for H2, stacks and electrolyzers) and a cost-cutting program of 75 million USD. Liquid hydrogen is currently still being purchased, which entails losses, but is to be replaced by self-produced hydrogen.
After Plug Power – I reported in detail – established production facilities in the USA and internationally in a variety of ways and thus severely strained liquidity, the planned cost-cutting program amounting to 75 million USD is now to take effect. Whether this amount will be sufficient may be doubted, however, because it seems downright ridiculous in view of the Plug’s liquidity problems and comes much too late. That the company has started to produce liquid hydrogen at several locations and has delivered to customers like Amazon and Walmart is good news for now, but will at first have little influence on the company figures.
With orders for electrolyzers too has Plug scored, but it will be some time before significant sales and thus profits are visible here. That the Saudi sovereign wealth fund Public Investment Fund (PIF) at the end of 2023, with the selling of 5.67 million shares, has completely withdrawn from Plug is not a good sign.
Summary
Words must now be followed by deeds, because all too often very full-bodied forecasts have been made. That Plug will bring partners on board for some projects seems very likely. And also the spin-off (partial sale) of some units is conceivable, if liquidity cannot be adequately presented soon. However, there is currently no need for action. Plug is clearly on my watch list, though, as the company is active in the right markets at the right time. Once the financial problems have been solved, there will possibly also be changes in management, which has lost trust, and Plug will continue on its way.
Over 170 million shares sold short (short interest, status mid-February) are dubious, however, as there is massive speculation against the company or – keywords Amazon and Walmart (warrants) – a form of hedging is being used – no guarantees. All the same, already 10 million shares were short covered in January/February. On the other hand, it is this short interest that can sometimes have a price-driving effect via the covering (short squeeze) when good news is reported. Everything has two sides.
There is still no need for action, however, since the publication of the figures for the first quarter is pending. That various business media in Germany count Plug Power among their top investments in hydrogen befuddles me, though. There are more convincing H2 investments.fa
Disclaimer
Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.
Hyzon Motors will start production of 200‑kW modules for commercial vehicles in the USA in the second half of 2024. This should then lead to a recovery of the strongly depressed share price via incoming orders. Parallel to this are running product presentations such as the recent one in Melbourne (Australia) with the 200‑kW Hyzon Prime Mover at the Kangan Institute Automotive Centre of Excellence. Deliveries in New Zealand, Australia, Europe and the USA are planned for later in the year. This fuel cell system can be used in many other applications and markets at the same time: rail vehicles, maritime transport, stationary energy, mining vehicles, etc. It will be interesting to see which customers this 200‑kW single stack will find and the order potential that will result, especially as it offers a cost reduction potential of over 25 percent and conserves 30 percent of the space and weight – compared with a 110‑kW system. A first major market for Hyzon will be the employment in commercial vehicles in Australia, where the company has an important location with around 50 employees.
Patent registrations – Competition with Toyota and Bosch
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Hyzon Motors has applied for a number of patents in the USA, Europe and Asia and many have already been granted. The main focus here is on reducing emissions when using fuel cells, but also on battery systems. What this means in detail is not clear to me, but shows that Hyzon is very active in securing patents and sees in it an important basis for its FC products and utilizations as well as markets. This would put them in direct competition with companies such as Toyota and Bosch. This could – purely theoretically – eventually lead to license revenue.
Hyzon still has with over 100 million USD sufficient capital, but will not be able to avoid taking measures (issue of new shares or participation of a strategic investor) to finance the company’s growth and expansion. The production facility in Illinois is self-financed. Production ramp-up is beginning in the second half of the year. Incoming orders for the FC modules as well as speculation by a strategic partner or investor make the share of Hyzon Motors a very interesting speculation, although the investment is to be classified as highly speculative as you’re dealing with a start-up.
Disclaimer
Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.
A good 450 participants gathered at the specialist conference H2 Forum in Berlin February 19 and 20 to discuss innovative H2 technologies, strategies for the market ramp-up and the necessary regulatory framework conditions. A further 1,000 participants were connected online, even despite the considerable time difference in countries such as India and the USA.
The event was opened via a video by Kadri Simson, EU Commissioner for Energy. The two-day program was held under the motto “Empowering the future of hydrogen,” where this year’s focus was on the production of the green gas by electrolysis and its transport in Germany and Europe. At the H2 Forum were, among others, representatives from E.on, Enapter, EWE, Linde, FNB Gas and the H2Global Foundation. They discussed the role of hydrogen in the defossilization of the economic systems. Philipp Steinberg of the German economy ministry outlined the various phases of the development of the hydrogen core grid in Germany.
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Feelings of optimism and assurance were tangible throughout the high-ceilinged rooms of the Estrel Congress Center (ECC) as players from politics, industry and the energy sector talked about ambitious H2 projects at home and abroad. Inspiring as well was the approval by the EU Commission a few days before of a series of IPCEI projects, thus ending for some participating companies years of waiting. Additionally, the carbon contracts for difference and the auctions of the European Hydrogen Bank are giving hope to business representatives.
Spain: Megawatt-electrolysis in practice
For example, Özlem Tosun, project manager for green hydrogen at Iberdrola Deutschland, reported on the experience with a 20‑MW electrolysis plant, making it currently the largest in Europe. “I hope it doesn’t stay that way,” she added, in view of the necessary market ramp-up for green hydrogen. The Spanish energy corporation, known in the country primarily as an operator of wind farms in the Baltic Sea, started operation of the plant in Puertollano, May 2022 in the presence of the King of Spain. The city with nearly 50,000 inhabitants is located about 250 kilometers south of Madrid. The electricity for the hydrogen production comes from a 100‑MW photovoltaic park a few kilometers away and flows via an underground cable into the production hall, in which 16 electrolyzers of 1.25 MW each perform their work. These produce annually up to 3,000 tonnes of green hydrogen, which is temporarily stored in tower-high pressure tanks at 60 bar. The electrolysis plant is located next to the fertilizer factory of Fertiberia and currently covers ten percent of their hydrogen requirement, which according to Iberdrola saves 48,000 metric tons of CO2.
“But this is just the beginning,” stressed Tosun. “In the coming years, Iberdrola wants to increase the production more than tenfold – to 40,000 tonnes by 2027.” The demand is there, since otherwise Fertiberia is using for its ammonia synthesis gray hydrogen obtained from natural gas. That no comparable plant for the production of green hydrogen on an industrial scale is yet in operation is also due to the fact that the whole thing is not as simple as it sounds in the big plans and letters of intent. “It didn’t go smoothly from the start,” admitted Özlem Tosun. “On the contrary – we had a lot of problems. But we also learned a lot and were able to improve a lot as a result. Not only technically, but also economically.” One of the most important points was to optimize the efficiency of electricity use. Contributing to this was that the performance and efficiency of the electrolyzers were able to be increased further and further.
Overall, the practical experience in Puertollano was important “to be able to scale the system.” As far as the large-scale production of climate-neutral energy sources is concerned, the multinational energy company not only sees itself as a pioneer, but is also optimistic about the future. Because Spain first wants to become independent of fossil fuel imports and then be able to export renewable energies. So it’s no wonder that Germany is for Iberdrola “a key market,” as Tosun says, “especially for green hydrogen.”
Lack of regulation as a stumbling block
How the development of a German and European hydrogen industry can be accelerated was one of many other topics discussed at the conference. It is important to break down barriers – for example lack of regulation and infrastructure – it was said in a panel discussion. Such hurdles, the speakers agreed, were in addition to the high costs for H2 production, like before, the crucial reasons why not a small number of companies, despite the positive feasibility studies, are still waiting with the final investment decision. The following figures show just how wide the gap is between aspiration and reality when it comes to the gas of the future: In recent years, the German government has raised the target for domestic production of green hydrogen from the original three gigawatts to ten gigawatts, yet so far not more than 62 MW of generation capacity has been installed. That there is a long way to go, but which can go faster, further practical examples have shown.
“Never waste a green electron again!”
“Did you know that with the wind power that was curtailed in the first half of 2022 alone 1.5 million households in Europe could have been supplied with electricity for a year?“ (The figure refers to average households with a consumption of 3,500 kWh per year.) That was one of several questions with which Alexander Voigt, managing director of HH2E, began his speech. “What could we do with all the green electrons that are not being generated only because the power grid cannot absorb them?” His answer, of course: Hydrogen! But also high-performance battery storage, to be able to offer energy for stabilization of the power grid. That’s how he explained the business model of the planned HH2E factory in Lubmin, Germany. It will use surplus electricity to “reliably and cost-effectively produce green hydrogen.” In addition will come CO2-free heating and, if required, the conversion of the “green molecules” back into electricity.
Alexander Voigt, CEO von HH2E, nutzt künftig Überschussstrom in Lubmin (Foto: Monika Rößiger), Source: Monika Rößiger
With this, the plant could contribute to the decarbonization of industry in Germany and, at the same time, support the energy supply. The final investment decision will be made shortly, according to Voigt, and then the way would be clear for the start of construction. In the year 2026, according to the plan, energy generation is to start: around 100 megawatts of total capacity in the first expansion stage, divided between a 56‑MW electrolyzer and a 40‑MW battery storage system. The electricity for electrolysis is coming from offshore wind farms in the Baltic Sea. Initially, the operators expect to produce around 7,200 tonnes of green hydrogen per year. The production capacity of the plant is scalable up to one gigawatt. Lubmin, once a transshipment point for Russian natural gas, will then become a center for green hydrogen. This can be fed into the existing natural gas grid that extends from the northeast of Germany to the southwest near Stuttgart.
In total, more than 40 companies from the entire H2 value chain presented their solutions and products in the high glass hall next to the conference hall in the Estrel Congress Center. The organizational framework of the H2 Forum was right: There was time to connect during the coffee breaks, lunch and supper. Lively discussions took place at all the tables and stands. That more politicians were present this time than at previous events was, according to Laura Pawlik, Sales Manager of the organizer IPM, particularly emphasized in the feedback from the participants. And also that the representatives from politics and administration were definitely open to further funding.
The date for the next conference has already been set: March 4 and 5, 2025, again in the ECC in Berlin. Focal points will be in addition to politics also the regulatory progress in Germany and Europe.
The share of Cummins Engine brings joy: The share price rose to a new high for the year, after the company was able to settle a long-standing legal dispute – it was about non-compliance with emission standards for engines – with a penalty payment of 1.6 billion USD, and with that this chapter is closed. The total cost of this settlement was 2.04 billion USD. Regarding the value per share, Cummins earned a good 19 USD in year 2023, if including the abovementioned costs. So it was about 6 USD per share.
The dividend remains at a high level – recently 1.68 USD per share in the quarter. Turnover increased by ten percent to 34.1 billion USD in year 2023 and should also further grow in the future. The subsidiary Accelera, which concentrates on the clean energy business (engines, batteries, fuel cells, electrolysis, etc.), was able to increase turnover to 354 million USD and should in the current fiscal year bump this up to 450 to 500 million USD. This area belongs, via the program Destination Zero, to one of the company’s future fields of focus and requires considerable investment. This division will therefore report a loss this year of 400 million USD, which, however, has its logical basis in the high initial investments. Even so, Accelera alone was already able to build up an order volume for electrolyzers of 500 million USD. The spin-off of the subsidiary Atmus Filtration Technologies to the shareholders (swap offer) is also about to be finalized. Cummins holds over 80 percent in this. The company will be valuated with 1.9 billion USD.
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New engine development HELMTM
A share price driver, however, can be the development of a new generation of engines. These units, based on the X15 engine platform, can be operated with natural gas as well as with hydrogen (starting 2028) and e-fuels. HELMTM stands for high efficiency, low emission, multiple fuels. They should accordingly contribute to significantly reducing the diesel demand of today’s customers. Test runs are underway with Walmart and UPS, and also with Paccar for its US class 8 truck Kenworth T680. Cummins is investing 1 billion USD in this project for the time being.
At the current price level – the company has a market capitalization of about 39 billion USD – the current valuation seems sufficient to me, where Cummins is considered a standard stock with a high dividend yield. I would now remember and rather bet on the comparable competitor from China, Weichai Power, as this company is only half as highly valued as Cummins and additionally owns a special potential in the area of hydrogen and fuel cells. Cummins but will go its own way in hydrogen. The subsidiary responsible for this, Accelera, has very high growth potential, which will have a positive impact on the company as a whole in a few years’ time.
Disclaimer
Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.
The share price of Ballard Power is at an all-time low. The published figures for the fourth quarter of 2023 and the entire year 2023 paint a contradictory picture. The future prospects outlined by the board, however, give cause for optimism. Turnover rose in the fourth quarter to 46.8 million USD – an increase of 132 percent compared to the same quarter previous year. Order intake in the fourth quarter amounted to an impressive 64.7 million USD, and the orders on hand (backlog) decreased slightly by three percent to 130.5 million USD, as Ballard received more orders to execute (deliver). However, the orders on hand fell by 21.7 million USD, as there were delays with one customer. This order has not been lost, but cannot yet be counted.
Total turnover in 2023 lay at 102.4 million USD, so the bottom line for the year as a whole was a loss of 0.48 USD per share. These are, however, all snapshots that obscure the company’s prospects, since important markets for fuel cells are only at the beginning of a long phase of strong growth. In the USA, Ballard is working on the construction of a new production facility, as recently announced. And in Texas: There, 20,000 FC stacks, to start, are to be produced per year as well as the MEAs. Investment volume: 160 million USD, and subsidies amounting to 40 million USD are beckoning. Do you build such a plant if you don’t believe in the future of your own technology and its market? By no means.
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FC buses really getting rolling
Impressive is the development in deliveries and incoming orders for FC modules for buses. An example: The bus manufacturer Solaris began its collaboration with Ballard in year 2013 with the purchase of two modules. In the following ten years, Solaris ordered 213 modules. In 2023 alone, it was already 365 modules. According to Ballard, this is just the beginning of a real wave of orders. Similar seems to be the case with cooperation partner for many years NFI: 141 modules in year 2023, which should only be the small beginning of the possible order volume, was the commentary.
NFI unites various bus brands under one roof such as New Flyer (70 percent market share for transit buses in the USA) but also Alexander Dennis (double deckers) and MCI. The annual production amounts to 8,000 buses. The partnership with Ballard has now been strengthened and already 100 FC modules ordered, to be delivered by 2024.
By year 2037, there are to be 650,000 buses globally, according to Information Trends, that will drive with hydrogen. In 2022, it was just about 4,000. Price parity for battery-electric and hydrogen-powered buses should be reached by 2030. Then, there should also be enough H2 stations and the price of hydrogen should be at parity with the price of diesel. Ballard is the clear market leader today and could remain so.
China – the giant awakens
The joint venture with Weichai for the production of FC modules for trucks and buses has still not really got going. Regulatory conditions and support programs as well as initiatives by individual provinces make Ballard confident that things will really get going soon. There, 20,000 complete FC systems (power range from 50 to 200 kW) per year can be built. That corresponds to an annual capacity of 2 GW in FC power. In year 2023, in China, 7,500 FC vehicles were sold – altogether 7,300 FC buses and 13,700 FC trucks. Through special support measures by the province Shandong (where the production is located), the JV will finally get started in 2024.
From the United Kingdom, Ballard has reported an order for 15 MW FC capacity. It entails 150 FCmove modules for an unnamed customer with which a letter of intent for another 296 FCmove modules with delivery by March 2026 exists. It involves off-grid electricity generation from renewable energies. At the same time, Ballard has reported the successful completion of test series for FC backup systems for data centers of Caterpillar and Microsoft. The last could be the basis for major orders.
Has the share price bottomed out?
The share price increase from 1 to 2 USD US-$ (2018 to 2020) to over 40 USD at the end of 2021 and the subsequent decline in the price to currently around 2.70 USD should now lead to a sustained upswing again. This describes the entire H2 ecosystem on the stock exchange: It starts with technological developments that lead to expectations on the stock market, which is reflected in the sharp rise in the share prices of listed companies in the sector.
This was the case at the end of 2021. Then, it came little by little to sharp falls in share prices, related to increasing disillusionment among investors. In accordance with to the Gartner hype cycle, the FC and H2 sector is now entering a long-term upward trend, as the markets are gaining momentum. With hydrogen, this entails production, transport, uses, markets, and much more. It is clear that this is a disruptive new technology and industry.
Combining this analysis with the long-term Elliott wave chart results in a picture in which the Ballard share is now bottoming out (a current sell-off as the end of the downward spiral), just at a time when investors almost no longer want to believe in the company’s success, which is expressed in the very low share price and the market valuation of about 0.8 billion USD with, at the same time, 751 million USD in the bank. Today we have real figures, if you only look at the more than 1,680 buses that drive with Ballard technology. The hydrogen costs per 100 km are sinking massively. The modules are also becoming increasingly competitive thanks to cost-cutting programs and material optimizations – also in comparison to battery-electric and diesel-powered buses.
If the cost of diesel fuel is on average 240 USD per day and battery-electric is 16 USD for electricity per day, then the fuel cell (hydrogen) is in between at on average 85 USD per day. The charging times of a battery-electric bus must also be taken into account, however, whereas vehicles can be refueled in just a few minutes with hydrogen or diesel. Especially for certain applications (with long distances, hilly terrain, weather influences), the hydrogen bus is superior to the battery-electric bus.
In addition, hydrogen is becoming increasingly cheaper. Whereas the average price per kg has been still around 10 euros up to now, an average of 6.48 EUR should be feasible in one to two years, in two to three years 3 to 5 EUR per kg, and in 10 to 15 years, so they say, it could even be as little as 1 to 2 USD per kg. The total cost of ownership for the hydrogen bus will fall massively, and diesel will need to be replaced.
Ballard is calmly focusing on the scaling of its technologies and the imminent ramp-up of important sectors such as heavy transportation. Already in the current year 2024, incoming orders for FC modules for buses are set to rise sharply, where the turnover is expected to be split 30 to 70 percent between the first and second half of the year. Order intake will have an impact on the share price, and the next quarterly figures less so.
Summary: Ballard is very well positioned in terms of its finances. With over 750 million USD liquidity, the company will be able to manage its future growth (expansion of existing capacities, geographical expansion) very well from its own resources. Key markets such as FC buses and trucks are in the starting blocks and will ensure very high growth for the company in the long term. That this all is taking longer than expected is normal for the development of a new market. The year of the actual breakthrough (profit zone) will be 2025/26, as the most important framework conditions (including availability of H2 infrastructure) will be created and the regulation as well as support programs worldwide (USA, EU and Asia) will take full effect in a positive sense. Ballard is likely to be one of the winners of this development. The year 2024 will be characterized by rising order intake. Buy and leave alone. Investment horizon: at least two to three years.
Disclaimer
Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.
Year 2022 saw fuel cell shipments creep up over 2021 numbers, though the latter was a remarkable year. When 2021 exceeded 2020’s MW numbers by over 70%, we thought we were finally seeing the uptick that had been anticipated – the classic “hockey stick” pattern. But the structure of the industry – and its reliance on only a few players for the majority of shipments – means that growth comes in spurts.
E4tech’s eighth annual Fuel Cell Industry Review showed just under 86,000 units shipped in 2021, or just over 2,300 MW, even with the COVID pandemic still hanging over markets. But this rapid growth was largely due to the activities of two vehicle OEMs, Hyundai and Toyota, together accounting for over 70% of the megawatts. But even after taking these out of the picture, growth continues – slowly but surely.
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E4tech is now part of ERM and the team is continuing to research and write the Review. The ninth FCIR shows that 2022 shipments were similar to the year before – with the continued but slow growth still led by Hyundai and Toyota, at over 60% of MW shipments, and by fuel cell buses and trucks into China. In 2022, we estimate nearly 89,200 fuel cells to have been shipped, amounting to almost 2,500 MW.
Analysis by region
For vehicles (which by far is the largest contribution, at 85% of all shipments by megawatts), much of the demand was localized to China and South Korea. China saw over 4,150 units being shipped, across all modes of mobility (including forklifts, now slowly taking off in the country), while South Korea saw nearly 10,400 deployments, dominated by Hyundai’s Nexo. Together with 831 Toyota Mirais going into the home market of Japan, Asia now accounts for around 15,600 units into transportation markets, or 17% of global shipments of fuel cells by number, but rather more impressively some 1,500 MW (60%) of the shipped megawatt count.
Hyundai is benefitting from the 50% subsidy for fuel cell vehicles in South Korea. South Korea is now also the single largest market for large stationary units, in CHP and prime power modes. Stationary shipments into the country grew from 147 MW in 2021 to 196 MW in 2022 (8% of the global MW count). These numbers illustrate the importance of South Korea for fuel cell shipments – and, moreover, the key role of sustained policy and subsidies in helping fuel cell companies and OEMs to achieve volume.
In context of the Japan’s Ene-Farm program, across all markets (stationary, mobility and portable), Asia accounts for 60,850 units (two-thirds of global shipments) and 1,770 MW (71% of global shipments). Behind Asia is North America, with around 14,550 fuel cell shipments (nearly 485 MW, or 19% of global shipments in megawatts), led by Toyota and Bloom Energy shipments to the United States. Europe accounted for roughly 13,250 of fuel cell shipments in 2022, down from just over 14,000 units in 2021. The fall in unit shipments followed the completion of the PACE program of the US Inflation Reduction Act and the imminent closure of KfW-433 grant funding by Germany. In megawatts, the count slightly increased, from a corrected 204 MW in 2021 to 228 MW in 2022, about 9% of the global market. Fuel cell vehicle shipments to Europe are lower than for Asia and the US because of the low subsidies provided by the national governments.
Analysis by application
Fuel cells for mobility, primarily cars, continued to dominate the overall count. Across all modes of mobility (including forklifts), 85% of shipments (2,100 MW) fell into this category in 2022, 150 MW more than in 2021. In units, mobility accounted for 35% of shipments in 2022, a slight fall from 2021’s share. So, the message is transportation is growing, but other fuel cell markets are growing too.
The next main contributor to vehicle shipments is China, with a record 3,789 units (buses and trucks) being shipped over 2022. Together, these are estimated as contributing 387 MW to the overall count in 2022.
While nearly 1,000 fuel cell buses were shipped into China in 2022, fewer came to Europe in 2022 (only 99 registrations). According to CALSTART figures, as many as 82 new fuel cell buses were fielded in the US in 2022, mostly in California. Outside China, fuel cell truck shipments globally in 2022 remained minuscule. This could change, given the business plans of Cellcentric, Plastic Omnium, Hyzon and others.
Fuel cells for ships and for aviation remains exploratory, now with a growing emphasis on propulsion rather than hotel loads or auxiliary power. Forklifts continue to be a major application for fuel cells, albeit with fewer unit shipments in 2022 (over 9,650 units) compared to 2021 (over 13,400 units). Prime power and CHP comprise a large part of the remaining demand, in unit numbers and in MW. By number, micro-CHP still dominates, with Japan leading with its Ene-Farm program. ACE shows 42,877 units being installed in 2022, over 3,000 units more than the previous year. Outside Japan and Europe, micro-CHP shipped in negligible numbers, further demonstrating the criticality of country-to-country policy in supporting fuel cells. Together, prime power and CHP across the power range contributed 364 MW shipments in 2022, up from 335 MW in 2021. Although a growing emphasis for developers, fuel cells for grid support and off-grid power has remained subdued, at 14 MW (for both years). Shipments of portable fuel cells (including smaller ported APUs, less than 20 kW in power output) showed an increase, from just over 6,000 units in 2021 to nearly 8,000 units in 2022. These are supplied globally, but most feed into European and North American industrial and consumer markets.
Shipments by fuel cell type
PEM continues to outweigh other fuel cell types in shipments, both in volume and in MW capacity. Of the nearly 90,500 fuel cells shipped in 2022, over 55,000 were PEM. By megawatts, PEM fuel cells recorded 2,151 MW, 86% of the overall volume of shipments.
High-temperature PEM, generally utilizing methanol rather than hydrogen as a fuel, continues to grow, led by Advent Technologies. While still a fraction of overall PEM units at present, shipments are set to grow more aggressively given the improved logistics and increased runtimes enabled by the methanol fuel. DMFC (direct methanol) had a good year, with nearly 8,000 units shipped over 2022, mostly from SFC Energy.
SOFC (solid oxide) grew to nearly 27,000 units in 2022 (mostly micro-CHP, by number). The MW count grew from 207 MW in 2021 to 249 MW in 2022. Much of this is attributable to stronger sales from Bloom Energy. PAFC (phosphoric acid fuel cell) shipments fell, and while no new MCFC (molten carbonate) system placements were recorded over 2022, FuelCell Energy continues to produce significant volumes of stacks, for mid-life refurbishment of systems. AFC (alkaline) shipments increased to over 100 units in 2022, way down on other fuel cell types despite the lower cost potential, both for the fuel cell stack and the hydrogen purity requirement.
Summary
Fuel cells had a good year in 2022. Despite shipments being dominated by a few key suppliers into just a few countries, we are at last beginning to see shipments into Australia and South America, buoyed by the greater interest in hydrogen generally. And while interest is helpful, it remains the case that fuel cells have yet to break through the high capital cost threshold, and (for the hydrogen-fueled units) high fuel prices. We are slowly seeing this happen, through big changes to the supplier landscape, the IPCEI initiative in Europe, significant capacity upgrades to fuel cell production, and the Inflation Reduction Act in the US. But for now, the message remains the same: sustained support from governments is still needed to allow fuel cells to fully support the energy transition. Some fuel cell companies are now also purposing their designs to electrolysis, to help push the market, and with it the hockey stick.
ERM’s Review, a digest of the year’s activity, together with an analysis of fuel cell shipments by region, type and application year on year, is available at http://FuelCellIndustryReview.com. The 2022 edition is delayed, but coming soon. We would like to thank all the fuel cell shippers who graciously provide shipment numbers to us each year, which helps underpin our review.
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