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May 10th, 2023 | 09:35 CEST

Panic at Plug Power: Hydrogen specialists Nel and First Hydrogen convince

  • Hydrogen
  • greenhydrogen
  • renewableenergies
Photo credits: pixabay.com

Is the wheat being separated from the chaff in the hydrogen sector? This is the impression one could get in the last few weeks. First, Nel convinced with its quarterly figures. The Norwegians are finally getting a grip on their margins and are building the next gigawatt factory in the US. First Hydrogen is also investing in North America. A new site for the production of hydrogen and fuel cell commercial vehicles is to be built in Canada. Plug Power, on the other hand, has its work cut out. The US company disappointed with its quarterly figures on Monday evening. In addition, capital measures were announced. The share price fell by almost 10% in German trading yesterday.

time to read: 4 minutes | Author: Fabian Lorenz
ISIN: PLUG POWER INC. DL-_01 | US72919P2020 , NEL ASA NK-_20 | NO0010081235 , First Hydrogen Corp. | CA32057N1042

Table of contents:


    First Hydrogen: Building in Canada

    Recently, the experts at researchanalyst.com pointed out that the slide in First Hydrogen's share price in recent weeks was an opportunity to get in on the hydrogen high-flyer of recent months (link to the study https://researchanalyst.com/en/updates/stock-news-first-hydrogen-second-chance-after-the-setback). And they seem to be right. Driven by positive news from industry and from the Company itself, the rebound is underway.

    First Hydrogen's Generation I fuel cell vehicle with a range of over 500 km is currently being tested by Rivus. To put this in perspective, as a fleet manager Rivus manages around 85,000 light commercial vehicles in the UK. Through the British alone, First Hydrogen could easily reach its target of selling between 10,000 and 20,000 units of the utility van by 2025/2026. In the process, the fuel cell vehicle will be tested by more international customers.

    At the same time, the Company is laying the foundation for building an ecosystem around hydrogen. First Hydrogen has bought two plots of land in the Canadian town of Shawinigan. The Company's production plant for up to 35 MW of green hydrogen is to be built there. This will then not only be used to supply the light commercial vehicles (LCV) offered by First Hydrogen but will also be sold to other hydrogen vehicles. First Hydrogen will thus be a vehicle manufacturer and fuel provider in one. The new Shawinigan site will also produce First Hydrogen's light commercial vehicles for the North American market in combination with the Company's Hydrogen-as-a-Service product offering. The assembly plant will be designed to produce 25,000 vehicles per year at full capacity.

    First Hydrogen CEO Balraj Mann: "Shawinigan is the ideal place for us to build a hydrogen ecosystem. The city and region are very well positioned with abundant renewable energy resources, developing industrial communities and a growing green energy economy. It will also be crucial to work closely with the regional education network to build the skills needed for the future. We are very pleased that Investissement Québec recommended Shawinigan to us, and we expect that our joint projects will ultimately create hundreds of jobs in the region."

    Nel: Margins under control and expansion in the US

    Operationally, things are looking up again at Nel. Initially, the quarterly figures had surprised positively. Subsequently, Goldman Sachs, among others, confirmed the 'Buy' recommendation and raised the price target slightly to NOK 21. The Norwegian hydrogen specialists had exceeded expectations. Margins are improving noticeably, and the order book is at a record level.

    And the Norwegians continue to invest heavily. In the US state of Michigan, the Company wants to build an automated gigawatt electrolyser factory. Nel announced this at the SelectUSA Investment Summit in the US capital, Washington. When completed, the Michigan plant is expected to have a production capacity of up to 4 GW of alkaline and PEM electrolysers. In the future, Nel will build on its fully automated concept for the production of alkaline electrolysers, which was developed at Heroya in Norway. On-site, the Norwegians plan to invest around EUR 400 million. A large number of possible locations had previously been examined.

    "The decision for Michigan is based on an overall assessment of what the state can offer in terms of financial incentives, access to a highly skilled workforce and collaboration with universities, research institutions and strategic partners. The personal commitment of Governor Whitmer and her competent and service-oriented team should also be highlighted," said Håkon Volldal, CEO of Nel.

    Volldal emphasised that the short distance to General Motors, headquartered in Detroit, also played an important role in the choice of the state. The two companies are working together to further develop and improve Nel's PEM electrolyser technology.

    "Nel's new facility near our HYDROTEC development site in southeast Michigan will help us accelerate our electrolyser collaboration," said Charlie Freese, Executive Director of HYDROTEC at GM. "This technology is critical to lowering costs while creating a more sustainable hydrogen supply."

    Plug Power: In need of capital after significant loss

    Plug Power released figures for the first quarter of 2023 on Monday night and disappointed. The loss is higher than expected, and the revenue forecast for the 2023 financial year also fails to meet analysts' expectations.

    Plug Power increased its revenue from USD 141 million to USD 210 million in the first quarter of 2023. Unfortunately, the loss also increased significantly, from USD 156.5 million, or USD 0.27 per share, to USD 206.6 million, or USD 0.35 per share. For the full year 2023, Plug Power forecast revenue of USD 1.2 billion to USD 1.4 billion. According to Bloomberg, this is well below average analyst estimates of USD 2.04 billion. Plug Power attributes the large loss to increased hydrogen molecule costs combined with historically higher natural gas prices and continued supply disruptions.

    Given the loss, it is not surprising that Plug Power requires fresh capital. The Company is currently looking at several sources of low-cost, non-dilutive capital, and the second phase of due diligence with the US Department of Energy's Loan Programs Office is underway. There would also be discussions with banks for an asset-backed loan.


    Hydrogen will be a crucial part of the energy mix. However, it is not yet clear which companies will benefit. But the wheat is being separated from the chaff. While Nel seems to be getting a grip on its margins, Plug Power is facing significant challenges. The losses are increasing, the supply chains are still not under control and fresh capital is needed. By contrast, things are going well at First Hydrogen. The Generation I vehicles are being tested and will hopefully be ordered soon. Generation II is already in development, and the Company plans to produce hydrogen themselves in the future. The Canadians are valued much more favourably than Nel and Plug Power.


    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Fabian Lorenz

    For more than twenty years, the Cologne native has been intensively involved with the stock market, both professionally and privately. He is particularly passionate about national and international small and micro caps.

    About the author



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