Plug Power (OCT: PLUG) is a U.S. company that grew from selling forklifts to an established market leader in the design and manufacture of hydrogen fuel cell systems. They break through the high concentration of conventional batteries in today’s vehicles. The demand for alternative energy including billions of means of transportation that our world has doesn’t stop growing. Over the past decades, Tesla – the American electric car manufacturer – has proven that there is room for newcomers to the automotive and energy industries, as long as you dare to be different. If we are to believe Plug Power, they are pioneers and risk-takers at heart.
How is Plug Power different?
With the production of fuel cells the company wants to respond to a more efficient energy source for (industrial) vehicles such as forklifts. The big advantage of hydrogen is that it does not cause air pollution. When hydrogen gas is burned, only water vapour is created and no carbon dioxide is released (the production excluded here). The hydrogen is converted in a fuel cell with oxygen from the air into water, producing electricity, which drives the electric motor.
Plug Power’s GenDrive system integrates fuel cells provided by both Plug Power and Ballard Power Systems. The products are used in manufacturing, assembly plants and the automotive industry. It includes a hydrogen storage system that charges the system within minutes, while with lead-acid batteries it can take several hours. No more flat batteries at the end of a shift and don’t forget the air pollution that will be avoided. All over the world, we see how governments are making themselves stronger for the climate and it is becoming increasingly complicated to own a polluting vehicle without having to pay a higher tax or extra charge for it.
Not only Plug Power’s technology is different. From a business point of view they have also performed remarkably well. The company had already shipped more than 25,000 fuel cell units by 2019. But it’s not just sales that are making progress. For example, in April 2017 Amazon.com bought more than 55,3 million shares of Plug Power and entered into an agreement to apply the hydrogen technology in its own warehouses. In the customer system we find names like: Toyota, BMW, Mercedes-Benz, Nike and Wal-Mart. Customers appreciate the fact that Plug Power contributes to their sustainable business. The cost-effective hydrogen and fuel cell solutions increase productivity, drop the operating costs and reduce the carbon footprint.
Shareholders do believe in hydrogen
“Fuel cell shares such as Plug Power and competitors such as Ballard Power (BLDP) and the Norwegian NEL ASA (NEL) have more than doubled this year – driven by European initiatives to promote green energy and Nikola’s (NKLA’s) market mania for fuel cell powered truck plans.”Bill Alpert, Barron’s
Plug Power is one of the few viable renewable energy companies and that gives them a strong market position. Especially now that companies such as Tesla and Nikola – which focus on alternative energy shares – are experiencing an increase recently. Confidence is rising to such an extent that by June 2020 the share rose by 90.5%. Two acquisitions were concluded with United Hydrogen Group and Giner ELX. Power Plug assured that this development will lead to an improvement in the generation, liquefaction and distribution of hydrogen fuel for its hydrogen fuel stations. As a result, prognoses for 2024 have been revised and expected revenues totaling $1 billion and adjusted EBITDA of $200 million were increased to $1.2 billion and $250 million. Finally, a new law was passed in California that same year, called the Advanced Clean Truck Regulation. It focuses on the CARB’s goals of reducing greenhouse gas emissions by 40% and reducing oil use by 50% by 2030. This makes it clear once again that the demand for alternative energy sources will increase significantly in the coming years.
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