Ballard Power Surges Over 17% on Record Fuel Cell Order, $54M Tax Credit

AeroClean Technologies

Ballard Power Systems (NASDAQ:BLDP) witnessed a remarkable surge of more than 17% in early trading on Monday following two significant announcements: a substantial supply deal with a leading European bus manufacturer and the approval of a US$54 million tax credit under the United States’ Inflation Reduction Act (IRA).

Last month, Ballard’s stock experienced a dip to a 52-week low after the release of its fourth-quarter financial results, which revealed a decline in its 12-month order book. However, the company has now inked its largest-ever order, supplying fuel cells to Poland’s Solaris Bus & Coach, with financial terms undisclosed.

Additionally, Ballard revealed the approval of a US$54 million investment tax credit from the U.S. Internal Revenue Service, allocated under the IRA. This 30% tax break will bolster the construction of a new fuel cell Gigafactory in Rockwall, Texas.

President and CEO Randy MacEwen emphasized Ballard’s strategic positioning amidst key industry trends, stating, “Ballard sits at the convergence of the megatrends of decarbonization, energy security, and technology change, with highly disruptive and proven zero-emission fuel cell products.”

The US$54 million tax credit supplements previously announced grants from the U.S. Department of Energy, amounting to US$40 million, bringing Ballard’s total U.S. federal funding to US$94 million. The company anticipates finalizing the investment decision on the Texas facility later in 2024.

MacEwen highlighted the favorable policy landscape in the U.S., citing initiatives like the National Blueprint for Transportation Decarbonization and the National Zero-Emission Freight Corridor Strategy.

Ballard’s increasing emphasis on the United States contrasts with its cautious approach to expansion in China, amid geopolitical tensions. The company specializes in hydrogen fuel cells for various applications, including buses, commercial trucks, trains, marine vessels, and stationary power.

Toronto-listed Ballard shares surged more than 15% to $4.36 per share by 11:09 a.m. ET, marking a significant rebound from previous declines. Despite challenges, the stock has demonstrated resilience, gaining over 17% amidst the positive developments.

Featured Image: iStockPhotos

Please See Disclaimer