dynaCERT, Volkswagen and Plug Power: Between Breakthrough and Cost Pressure! Who Will Take Off and Who Will Fall Behind?

dynaCERT: Commercialization Successes in France & Beyond

The core product, HydraGEN™, uses electrolysis to generate hydrogen and oxygen on demand and feeds both gases into an internal combustion engine's air intake. This retrofit solution significantly reduces fuel consumption and emissions. The patented bridging technology offers a fast payback period, contributes significantly to decarbonization and is therefore seeing increasing success.

Most recently, the cleantech company announced plans to expand its market presence in France and other French-speaking markets through its distribution partner, IPMD. A repeat order from an existing customer, as well as ongoing pilot projects in the transportation, port, industrial, and mining sectors, reflect growing interest in HydraGEN™ technology.

Vietnam also represents an important market, serving as a bridgehead for the company's Southeast Asia strategy. In late June, dynaCERT announced its first production order from a local logistics company. Further orders followed in early August. Under the leadership of the new CEO, Kevin Unrath, a sales campaign is currently underway. Targeted customer meetings and industry events are intended to boost sales.

Additional revenue could potentially come from emissions credits. The proprietary telematics platform HydraLytica provides the foundation for this with a Verra-certified methodology. Verra is a large and recognized international organization that develops standards for voluntary CO₂ markets and certifies climate protection projects.

The successful placement of a convertible bond in June raised CAD 5 million for the Canadian company. Now, subject to TSX approval, the company plans to extend the CAD 1 million convertible bond issued in October 2024 until October 2027. Analysts at GBC expect the stock, which is currently trading at about CAD 0.09, to see its price multiply over the next 12 months.

Volkswagen: Severe Cutbacks and Hope for Improvement

The situation at Volkswagen is coming to a head. High costs, extensive recalls, and the escalating labour dispute are putting the company under pressure. Millions of vehicles across the group must be recalled due to potential steering failures. This will cost several billion euros. In addition to VW, Audi, Seat, and, most recently, Škoda are also affected.

Statements by management at the Capital Markets Day of the 75%-owned subsidiary Porsche AG recently provided some cause for optimism. With its "Sports Car Forge '35" strategy, Porsche aims to cut costs, boost productivity, and make the group financially more robust following several difficult years—even against the backdrop of persistently weaker business in China. In the medium term, the operating margin is expected to return to 10 to 15%; in the long term, the company is aiming for the upper end of that range.

VW recently terminated several collective bargaining agreements effective at year-end to implement further cost savings. The stock market remains unsettled, with the automaker's stock trading below EUR 70. To become more competitive in the electric vehicle market, VW recently announced closer cooperation with a player from the People's Republic of China. VW and its subsidiary PowerCo, together with Gotion, are establishing three joint ventures in Spain, Slovakia, and Morocco to produce battery cells and cathode material. The focus is on cost-effective, long-lasting lithium iron phosphate batteries, which are intended to make electric vehicles in the mass-market segment more competitive.

Plug Power: Significant Improvement in Gross Margin

The company sells electrolysers for hydrogen production, fuel cell systems, and related services, and also runs a hydrogen supply business. A recent company announcement caught investor attention. Plug Power has signed a strategic agreement with Arcadia eFuels for more than 1 GW of electrolyser capacity for planned e-SAF projects in Europe and the Americas.

The first project is the 280-MW ENDOR project in Denmark, where Plug electrolysers are expected to produce approximately 110 metric tons of renewable hydrogen daily, which will be processed into synthetic aviation fuel together with captured CO₂. In addition, the company is the preferred electrolyser supplier for four other projects with a total potential capacity of more than 1 GW.

In the second quarter, the US-based company slightly increased revenue year-over-year to USD 178.3 million. The gross margin recovered significantly and stood at only about -1%. Reaching the break-even point is a key medium-term goal. EPS shows progress; in Q2, the loss per share was USD 0.14, compared to USD 0.20 in the prior year. For the first six months, EPS was negative at USD 0.31, up from USD 0.41 previously. The shares are currently trading at USD 1.78, giving the company a market capitalization of USD 2.5 billion. Analysts see potential for the stock to double, with an average price target of USD 3.54.

For dynaCERT, commercialization is now crucial. Then the stock, as valued by GBC, should also step-by-step put its horsepower on the road. VW must demonstrate that the new cost structure enables sustainable margins under competitive pressure. At Plug Power, funded projects and rising margins matter more than total volume. The break-even point must be reached in the medium term.