Motiv-ating the Hydrogen Economy with Fuel Cells



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.
  • The company serves a large market for various fuel cell applications with an estimated total addressable market (TAM) of over $130 billion by 2030, and Ballard currently holds the highest market share for PEM fuel cell products.
  • Global net zero-emission regulations and public policies underpin an estimated $42 billion hydrogen fuel cell vehicle market by 2026 and provide a backdrop of growth for Ballard.
  • 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 significant reduction in the cost of the stack compared to a three-year 70%+ reduction target.
  • 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 Power to produce stacks and modules for buses, trucks, and forklifts in the China market. This is a crucial deal and positions Ballard to better leverage the world’s largest market for fuel cell vehicles.

CATALYST MONITOR

  • Continued progress on the 3x3 cost reduction program and achieving a TCO at or below battery electric and diesel.
  • Additional political and policy tailwinds around carbon reduction and specific policies favoring fuel cells.
  • Subsidy announcements out of China designed to help accelerate adoption of fuel cell electric vehicles.
OUR INSIGHTS

The Opportunities

Ballard operates in the rapidly growing PEM-based hydrogen fuel cell market. The company already has a dominant position in HMD 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 of fuel cell buses and trucks in China and believes its strategic collaboration with Weichai will enable the company to win in China, 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 FCEBs 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.

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