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December 21st, 2023 | 07:00 CET

Renewable Energy in Focus: First Hydrogen, Siemens Energy and Volkswagen present groundbreaking technologies - Which share leads the way?

  • Hydrogen
  • greenhydrogen
  • renewableenergies
  • Technology
Photo credits: Volkswagen AG

Renewable energy is increasingly taking center stage for investors. Companies like First Hydrogen are setting new standards by developing advanced hydrogen-powered commercial vehicles. However, the figures have to be right. While Siemens Energy struggles with the challenges in the energy sector, a large proportion of the Company's shares are being shifted to the pension fund, which could have severe consequences for investors and employees. On the other hand, Volkswagen is responding to the German government's austerity measures. It is taking over the previous state's share of the environmental bonus for electric vehicles as a goodwill gesture. However, this seems to be merely a gesture in light of the Company's restructuring program that is launching in Germany. These developments shed light on technological advancements and business adaptations in the era of green transformation.

time to read: 6 minutes | Author: Juliane Zielonka
ISIN: First Hydrogen Corp. | CA32057N1042 , SIEMENS ENERGY AG NA O.N. | DE000ENER6Y0 , VOLKSWAGEN AG VZO O.N. | DE0007664039

Table of contents:


    Dirk Graszt, CEO, Clean Logistics SE
    "[...] We can convert buses and trucks to be completely climate neutral. In doing so, we take a modular and incremental approach. That means we can work with all current vehicle types and respond to new technology and innovation [...]" Dirk Graszt, CEO, Clean Logistics SE

    Full interview

     

    Green mobility expansion: First Hydrogen plans huge production plant and focuses on "Hydrogen as-a-Service" in North America

    The transition to renewable energy requires affordable and low-risk technologies. Companies worldwide are facing the challenge of finding cost-effective solutions for the transition to low-emission drives. First Hydrogen is leading the way by not only planning on the drawing board, but already developing and manufacturing hydrogen-powered fuel cell commercial vehicles ("FCEVs"). In cooperation with AVL Powertrain and Ballard Power Systems Inc., they have carried out test drives with their vehicles in the UK. The FCEV van scores points here with an impressive range of over 630 km per charge. These FCEVs offer a solution for logistics companies looking for cost-efficient and low-emission powertrains.

    The North American program marks a significant expansion step for First Hydrogen. The Company plans to build a vehicle assembly plant and a green hydrogen production facility in Shawinigan, Quebec. With its "Hydrogen as-a-Service" model, the Company will provide B2B customers in the Montreal-Quebec City hub with clean green hydrogen and zero-emission commercial vehicles to accelerate the development of green ecosystem solutions. The assembly facility will enable an annual production of up to 25,000 vehicles for distribution across North America. At the same time, it will significantly contribute to the creation of green technology jobs in the region.

    The hydrogen-powered FCEVs from First Hydrogen have already traveled more than 10,000 km during extensive testing. The zero-emission future starts now in Canada.

    Siemens Energy still in trouble: CFO resigns, pension fund assumes risk

    However, not all companies in the industry are experiencing a smooth ride. Siemens Energy will have to pay around EUR 500 million in fees for government support over the next 3 years, according to reports from WirtschaftsWoche magazine. The German government, which is backing the Company with EUR 7.5 billion in guarantees, is demanding fees three times higher than those originally requested by the banks.

    Now, Siemens Energy's financial challenges are casting a long shadow over the Siemens Group's pension fund. Siemens has already announced that it will reduce its direct stake in Siemens Energy. Chief Financial Officer Ralf Thomas will also resign from the Supervisory Board. The ship has not yet sunk, but there is a significant lack of water under the keel. The independent fund, which is managed off the balance sheet, now holds a 14.8% stake in Siemens Energy. From an investment perspective, this high stake poses considerable risks, as the Company is still struggling with the difficulties caused by its wind power subsidiary, Siemens Gamesa, and is currently reliant on government guarantees for orders worth over EUR 100 billion.

    What previously led to financial distress for investors is now being transferred as a risk to long-serving Siemens employees. It is an accounting trick, kept off the balance sheet. And morally not of the finest nature. By doing this, Siemens is transferring another part of its Siemens Energy share package to its pension fund, reducing direct shareholding from 25.1% to 17.1%. The problem has thus only disappeared from the books but by no means from the corporate world.

    As reported by Handelsblatt, 8% of Siemens Energy is worth around EUR 700 million according to data from the London Stock Exchange Group. Siemens CFO Ralf Thomas will resign from his position on the Supervisory Board of Siemens Energy until the Annual Shareholders' Meeting on February 26, 2024. In June, Siemens had already transferred 6.8% of the former corporate division to the pension assets.

    Competitiveness at risk: Volkswagen grants ID. customer bonus and initiates organizational streamlining

    The German government needs to cut costs. Minister for Economic Affairs Robert Habeck unceremoniously cut state subsidies for the purchase of electric cars. Consumers who opt for low-carbon technology are disappointed. At first, the Company Stellantis pushed ahead and offered to contribute the EUR 4,500 subsidy to each buyer itself. Now, Volkswagen is also responding to the end of state subsidies for electric cars by the Federal Office for Economic Affairs and Export Control (BAFA).

    The Group is not only paying the manufacturer's share, but also the previous state share of the environmental bonus. This goodwill arrangement applies to private customers who have ordered an eligible vehicle from the all-electric 'ID.' family up to and including December 15, 2023. Volkswagen is thus responding to the German government's savings measures and supporting consumers who rely on low-carbon technologies.

    Despite the subsidies and efforts to drive the EV sector forward, the European Automobile Manufacturers' Association (ACEA) warns that Europe may be lagging behind other regions. China dominates the EV supply chain, and the US is promoting its car manufacturers. A look at the consumer market shows that hybrid solutions are still preferred for electric vehicles.

    The goodwill promotion may appear more like a covering PR move because internally, different forces are at play at Volkswagen. The German site has become too expensive; a cost-cutting program is needed. In agreement with the works council, administrative personnel costs are to be reduced by 20%, while redundancies are to be avoided. The program is expected to improve earnings by EUR 4 billion in the coming year and EUR 10 billion annually by 2026. The most significant savings are to be achieved in material and fixed costs in order to increase the return on sales from 3.4% to 6.5%.

    The agreement with the Works Council is seen as a crucial step in the comprehensive program introduced by VW. The head of the Works Council emphasized that the course aims to strengthen competitiveness while protecting employees. Job security until 2029 remains unchanged; most cost savings are to be realized outside the personnel area. The development time for new models is to be reduced to 36 months.


    The future of the energy transition is a story of trial and error. Promising equity candidates such as First Hydrogen have already successfully tested their hydrogen technology for vans in the UK and are expanding into North America. With its focus on hydrogen as a low-emission propulsion system, First Hydrogen can make a decisive contribution to mobility and sustainability. The transition to renewable energies will succeed as soon as technology becomes affordable and low-risk. First Hydrogen is starting where others are still planning. First Hydrogen combines mobility with zero-emission hydrogen propulsion. Siemens Energy is facing financial challenges as the Company reportedly has to pay around EUR 500 million in fees for government support over the next 3 years. The German government is demanding fees that are three times higher than those requested by the banks. Siemens' pension fund is acquiring a significant stake in Siemens Energy, which could be problematic from an investor perspective due to the financial uncertainties and high risk involved. Volkswagen is responding to the end of electric vehicle subsidies by the Federal Office for Economic Affairs and Export Control (BAFA) in Germany. The Company is taking over not only the manufacturer's share but also the previous government share of the environmental bonus as a goodwill measure for private customers who have ordered an eligible vehicle from the all-electric 'ID.' family by December 15, 2023. The measure supports consumers who opt for low-carbon technologies. Internally, however, Volkswagen is undergoing a savings program to reduce administrative costs by 20% to become more economically efficient.


    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

    Juliane Zielonka

    Born in Bielefeld, she studied German, English and psychology. The emergence of the Internet in the early '90s led her from university to training in graphic design and marketing communications. After years of agency work in corporate branding, she switched to publishing and learned her editorial craft at Hubert Burda Media.

    About the author



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