Massively Underrated! The Next Robotics Wave Is Coming – First Hydrogen, BMW and Schaeffler Are Getting in Position!

First Hydrogen: Setting Its Sights on the Next Booming Market

First Hydrogen made a name for itself with fuel cells for commercial vehicles. Its strategic approach also includes hydrogen production and supply. Research into small modular nuclear reactors rounds out the company's profile. Now, the company has shifted its focus to robotics and autonomous systems, tapping into a massive market. The goal is to successfully establish a diversified technology group.

Drones have fundamentally changed the nature of warfare. Now, unmanned ground systems are increasingly coming into focus. Ukrainian units are now deploying these so-called UGVs (Unmanned Ground Vehicles) for logistics, evacuating the wounded, mine clearance, and, increasingly, for offensive operations—as was most recently the case during Operation Vivaldi. Fortune Business Insights expects the global UGV market to grow from just under USD 13 billion to more than USD 32 billion by 2034.

The Canadians want to secure a share of this massive market potential. The company recently secured exclusive global rights to further develop and commercialize a patented, AI-powered UGV platform. The design is modular and is intended to operate both autonomously and via remote control. The first unit has just been completed. Interchangeable superstructures enable a variety of missions, including transport, surveillance, and communication. The demonstrated configuration includes an automatically opening launch and transport unit for drones.

First Hydrogen had previously announced a definitive agreement to acquire a 60% stake in Exodus Actuation Solutions. To this end, two million of its own shares are to be issued in stages, and USD 2 million will be allocated for technology development. According to the press release, Exodus owns or licenses 26 granted patents and 10 pending patents related to motors, gearboxes, and actuators.

With this, the Canadian company aims to build its own technological foundation for autonomous and humanoid robotics. These activities will be consolidated within the subsidiary First Humanoid Corp.

The stock has not yet reacted to the strategic repositioning. Shares are currently trading at CAD 0.385, giving the company a market capitalization of CAD 35 million. This contrasts with the potential of a rapidly growing future market.

BMW: Managing Expectations

The automaker is increasingly relying on robotics to improve its own production. Last year, BMW successfully carried out a pilot project with the US robotics company Figure AI, using the Figure 02 humanoid robot at the Spartanburg plant in the US. According to BMW, Figure 02 supported the production of more than 30,000 BMW X3's within 10 months.

For its Leipzig plant, BMW announced another robotics pilot project with Hexagon Robotics' AEON, the humanoid robot from the Swedish company, which is to be used in battery and component manufacturing, among other applications. At the same time, BMW is continuing to develop fuel cell technology. A few weeks ago, the company reported on testing and production preparations for the iX5 Hydrogen. Hydrogen thus remains an additional powertrain option, whose success also depends on supply and operating costs. While these developments are innovative and encouraging, for now, the challenges of the core business dominate at the Bavarian automaker. In the second quarter, the automotive segment's EBIT margin was only 2.3%. Shares are currently trading at EUR 55, giving the company a market capitalization of EUR 33 billion. As recently as the end of last year, shares were trading at nearly EUR 100 on the stock market. On average, analysts see upside of around 30%.

Recently, new CEO Milan Nedeljkovic prepared the market for a prolonged period of weakness. The operating margin in the automotive business is expected to reach only 3 to 5% by 2028, while the traditional target range of 8 to 10% is not expected to be achievable again until the beginning of the next decade. The main problem remains China, where BMW is grappling with an intensifying price war and declining demand for expensive foreign vehicles. The company's countermeasures include cost cuts, greater localization in China, and the elimination of thousands of jobs. At the same time, investments and R&D spending are set to decline. BMW expects to gain momentum through the expansion of AI across the entire value chain and the introduction of a new sales model in Europe.

Schaeffler: Expertise Is Key

Schaeffler develops motion and drive technology for vehicles and industrial plants and intends to increasingly leverage this expertise in the field of robotics. This past summer, the German company unveiled a formed shaft gearbox for humanoid robots. These compact gearboxes transmit force and motion to the joints, making them central components of robot actuators. The new manufacturing process is expected to reduce production costs by more than 25% and material consumption by more than 75%. Series production for several manufacturers is planned for next year.

According to the company, it has already produced more than two million formed shaft gears for the automotive industry. In addition to shaft gears, precision bearings, linear and drive technology, sensor technology, and motion control solutions are also potential applications for robotics. This aligns with the Group's broader strategic positioning; with E-Mobility, Powertrain & Chassis, Vehicle Lifetime Solutions, and Bearings & Industrial Solutions, it is now significantly more than just a traditional rolling bearing manufacturer.

Financially, however, the Group continues to face challenges. In the first half of the year, Schaeffler generated approximately EUR 11.7 billion in revenue. The E-Mobility segment posted an operating loss (EBIT) before special items of EUR 402 million. Free cash flow before acquisitions and divestitures stood at minus EUR 300 million. At the current share price of EUR 6.30, the company is valued at EUR 6 billion. Analysts believe the stock has upside potential of around 40% over the next 12 months.

BMW, Schaeffler, and First Hydrogen are addressing different aspects of the same future-oriented topics, such as Physical AI, autonomous systems, and new propulsion technologies. BMW is incorporating humanoid robots and fuel cells into concrete pilot and development projects, while Schaeffler supplies key components such as drives, transmissions, and actuators. First Hydrogen is building its own technological foundation for autonomous unmanned ground vehicle (UGV) and robotics systems. These activities are consolidated within the subsidiary First Humanoid Corp.