A Business Update and Overview with Ballard Power Systems’ CFO Paul Dobson



KEY POINTS
  • Ballard's vision is to deliver fuel cell power for a sustainable planet. Ballard’s zero-emission PEM fuel cells are enabling electrification of medium- and heavy-duty mobility, including buses, commercial trucks, trains, and marine vessels.
  • This Management Series provides a general business update and overview of the company’s operations. Topics covered include the acquisition landscape, sales pipeline, competitive environment, and product cost reduction progress.
  • Ballard has $1.3 billion of cash to deploy and is focused on investing behind two key themes: accelerating hydrogen adoption and expanding global manufacturing capacity.
  • The company has made significant progress on its 3x3 cost reduction program focused on driving cost efficiencies in engineering design, supply chain, and advanced manufacturing.
  • Ballard is ahead of schedule in its 3x3 program and has already achieved a 50% reduction in the cost of the stack compared to a three-year 70% reduction target. The company has a line of sight beyond the 70% level.
  • The regulatory environment is favorable for Ballard’s fuel cell transportation solutions in key markets such as California, China, and Europe. The US Department of Energy also recently announced its Hydrogen Shot program which aims to facilitate clean hydrogen adoption.
  • China remains a critical market where the company has a strong relationship, including a joint venture with Weichai to produce stacks and modules for buses, trucks, and forklifts. This is a crucial deal and positions Ballard to better leverage the world’s largest market for fuel cell electric vehicles.
  • Our prior content on BLDP can be accessed HERE.

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OUR INSIGHTS

The Opportunities

Ballard operates in the rapidly growing PEM-based hydrogen fuel cell market. The company already has a dominant position in heavy- and medium-duty motive applications, which should position it to benefit from rapid industry growth. There are two key factors influencing this growth: a lower TCO and aggressive product development. Ballard's significant market share, a declining cost curve, product line expansion, and greater hydrogen availability should drive a fast-growing TAM for Ballard. China, the world's largest and fastest-growing FCEV market, is key. Ballard currently holds a 45% market share in China and believes its strategic collaboration with Weichai will enable the company to win in China long-term, with the government targeting 1 million FCEVs on the road by 2030. Europe, where Ballard currently holds an 80% market share, is also vital with 25,000 FCEVs and 100,000 fuel cell trucks estimated by 2030.

The Obstacles

The biggest headwinds are clear. The first is successfully reaching the TCO reduction targets, which presents both technology and execution risk. The second is successful and timely product development and portfolio expansion, particularly to address the attractive commercial truck opportunity. Ballard is currently working with tier 1 suppliers MAHLE in Germany and Linamar in Canada to develop and commercialize integrated products for both class 6-8 and class 1-2 trucks.

Ballard's vision is to deliver fuel cell power for a sustainable planet. Ballard’s zero-emission PEM fuel cells are enabling electrification of medium- and heavy-duty mobility, including buses, commercial trucks, trains, and marine vessels.

EXECUTIVE DISCUSSION

Executive in Focus: Paul Dobson joined Ballard as Senior Vice President & Chief Financial Officer in March 2021. Mr. Dobson brings over 25 years of global financial, operations and leadership experience, including significant experience in the energy industry. Mr. Dobson most recently served as CFO and Interim CEO of Hydro One. He previously held senior financial and operating roles at Direct Energy for 15 years, including as CFO and COO. Prior to that, Mr. Dobson served for 10 years at CIBC in various finance, strategy and business development roles. Mr. Dobson holds an Honours Bachelor’s degree from the University of Waterloo, an MBA from the Ivey Business School, Western University and is a CPA, CMA. He currently serves on the board of directors of Methanex.

Shawn Severson: Let's jump right into it, Paul. Why don't you give a little bit of overview, background on what brought you to Ballard as I'm sure a number of investors hav...

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