April 25th, 2022 | 10:48 CEST
Plug Power, First Hydrogen, Daimler Truck, Ballard Power - Revolution of transport: Hydrogen versus oil and gas!
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"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Daimler Truck - Chip shortage and autonomous driving
The freshly acquired DAX member Daimler Truck Holding is showing itself to be very progressive. In addition to the extensive deliberations on hydrogen drives, the Company focuses on autonomous driving in the USA. The focus here is not on the city or short distances but the so-called hub-to-hub distance of 300 to 500 kilometers. It is about standardization, relieving the burden on drivers, and synchronizing traffic on roads that are already overcrowded.
There is still a lot of fantasy involved in these considerations. In addition to very powerful communication networks, the industry needs further standards for road sensors or chips with sufficient artificial intelligence to make any traffic situation safe. In the last 2 years, the chip shortage issue has become more acute, i.e. even regular high-performance chips without autonomous functions are currently in short supply.
To get entirely on track for the future, Daimler Truck needs sufficient filling stations for e-motors or fuel pumps for hydrogen. Without this infrastructure, which the state will probably have to install first, the industry will not invest in expensive developments. However, a key aspect today is cost parity: The carrier who can offer the most favorable delivery price wins the race on the highway, and the electric or hydrogen-powered truck must deliver an operating advantage. At present, this is only possible with heavy subsidies from the state.
Daimler Truck Holding has fallen for the first time since its admission to the DAX. The share price is currently technically trapped between EUR 23 and EUR 26. The stock is not expensive, with a P/E ratio of around 7 and a payout of over 4%. However, supply chain issues are likely to weigh on current growth.
First Hydrogen - A good setup for infrastructure and vans
The sharp rise in fossil fuel prices is also causing policymakers to rethink their approach. That is because economies are facing significant challenges in making future mobility both clean and affordable. Commercial vehicles and ships, responsible for around 40% of global traffic emissions, are prime candidates for H2 fuel cell technology. The high power requirements mean that previously questionable battery solutions can be dispensed with. Ships must be able to move safely and autonomously on the world's oceans, and the necessary fuel must not run out under any circumstances in stormy seas.
The Canadian Company First Hydrogen has recognized the market's needs and adopted a two-pronged strategy at an early stage. In addition to developing a production-ready commercial transporter with fuel cell propulsion, the Company is also working on providing refueling points. Ballard Power and AVL Powertrain are the vehicle technology partners, and a prototype is to be ready for demonstration as early as this summer. In the fuel sector, the Company is cooperating with FEV Consulting GmbH of Aachen, Germany, to develop an adequate liquid hydrogen refueling station. At the same time, the Company is entering into a service agreement with the purchaser of the new cargo vehicle. Time is pressing: From 2025, stricter emission targets issued by the EU will apply, which conventional internal combustion engines in freight transport are currently unable to meet. First Hydrogen's strategy is to secure long-term domestic supplies of green hydrogen at fixed prices. This packaged solution will find its supporters, as the transportation industry desperately needs promising decarbonization approaches to compete.
Since the launch of the FHYD share in Canada and Germany, the price has been climbing relentlessly. Last week, the price reached a 12-month high of CAD 3.56. With 55.4 million shares, the Company is now worth CAD 170 million. This is unlikely to be the end of the road. The stock is quite volatile and has high turnover, so set a personal limit.
Plug Power and Ballard Power - The mobility of the future is green
Hydrogen shares were only high on investors' lists temporarily last year in 2021. After a dream rally in the first quarter with rises of several 100%, prices then fell back by over 70% from the top for some stocks. The two best-known North American representatives of the hydrogen sector are Plug Power and Ballard Power; they experienced their big sell-off in January 2022. Now it is time to take a closer look at the stocks again.
Plug Power is implementing modern propulsion concepts. For example, it recently equipped a large number of Walmart forklifts with a fuel cell. In addition to hydrogen for its 9,500 forklifts already in use, Plug Power also offers solutions for stationary power and other vehicles. The US retail giant is expanding its hydrogen infrastructure to reduce its carbon footprint, making the Company more ESG compliant.
Canada's Ballard Power, a First Hydrogen partner since 2021, recently received type approval for its marine fuel cell module. This regulatory approval is an important step toward the commercialization of H2 technology for marine applications and a game-changer for the inclusion of fuel cells in zero-emission solutions for heavy-duty marine transportation. The FCwaveTM high-power module developed by Ballard is offered as a flexible solution that could meet the energy needs of different types of vessels and a potential onshore energy supply. The scalable 200-kW power module offers a plug-and-play replacement for conventional diesel engines.
For Plug and Ballard, it will be crucial to see how many orders can be brought in from public investment budgets in favor of climate neutrality. Only then can a serious estimate be made of the operational development in the near future. What remains undisputed is the continued need for investment in research and development, which will probably not allow any net profits for shareholders for the time being. Plug Power is the top dog, analytically somewhat more favorable than Ballard and has significantly more liquid funds from the last capital increases.
The armed conflict in Ukraine provides the best arguments for turning away from fossil fuels in energy supply and mobility. The H2 companies listed on the stock exchange are not yet able to report profits; a lot of research and development still needs to be done here. In addition to standard titles such as Plug Power and Ballard, one should also consider the second-tier stocks, such as First Hydrogen when investing because the potential for surprises is much greater here.
Conflict of interest
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