Remember when the fuel cell ruled the world of alternative energy? Remember visions of the hydrogen fuel cell-powered automobile? It seems like decades ago that companies like General Motors were talking about fuel cells, not lithium ion batteries, as the alternative energy of the future. Well, that was before the success of the Toyota Prius proved to the world’s automakers that batteries and hybrid vehicles were not only efficient but highly marketable.
Fuel cell lovers should not fret. The hydrogen fuel cell has not completely lost its luster in the world of automobiles, according to the Wall Street Journal. It may be down, and the Obama administration may want to cut spending on hydrogen technology by $70 million next year, but many experts believe that, ultimately, fuel cells will be the alternative of choice to replace fossil fuels. And car makers like Mercedes-Benz, Honda, Toyota and GM still have fuel cell-powered vehicles in planning stages. Mercedes promises to have a fuel cell car in production by 2015, according to the WSJ report.
The lure of hydrogen remains strong, according to the WSJ, because fuel cell technology, which combines oxygen from the air with hydrogen from the car to create electricity, has advantages:
- Hydrogen-powered cars will be able to travel about 240 miles before refueling, compared to the about 100 miles for battery-powered electrical cars.
- It only takes about three minutes to refuel compared to much longer for plug-ins.
- Fuel cells are more effective for bigger vehicles like SUVs or tractor-trailers.
- Progress has been made in making fuel cells smaller; manufacturing costs are declining.
While some of the big name stocks (General Electric, United Technologies) are involved in the fuel cell business, several small cap companies remain focused on fuel cells in some capacity, including:
British Columbia-based Ballard Power Systems (Nasdaq: BLDP, http://www.ballard.com/) manufactures and sells fuel cells and fuel cell materials for the automobile and other markets. Revenue has been growing for Ballard (market cap now at $132 million), but the company still has a way to go to be profitable. The stock price ran up as high as $2.42 in April but has since dropped to about $1.56 with an average daily trading volume of 400,000 shares.
Danbury, CT-based FuelCell Energy Inc. (Nasdaq: FCEL, http://www.fuelcellenergy.com/) makes a variety of fuel cells and just received a $129 million order from POSCO Power, which is more than 1.5 times last year’s sales, according to The Motley Fool. That order, which came in late May, provided a jolt of energy for its stock, running the price up to $1.90 a share and it has been as high as $2.41 in the past year. It has since dropped down to $1.33.
New York-based Ener1 Inc. * (Nasdaq: HEV, http://www.ener1.com/) is focused on developing lithium ion batteries and battery systems, but also has a fuel cell subsidiary called EnerFuel. The idea is to ultimately create a hybrid system out of its fuel cell and lithium ion technologies for extended range electric vehicles or to provide back up power or point-of-use storage for homes and businesses. The stock has a 52-week range of $1.06 to $5.90 and is currently trading at about $1.13.
Lathan, NY-based Plug Power Inc. (Nasdaq: PLUG, http://www.plugpower.com/) manufactures fuel cell systems for industrial off-road markets and stationary power markets. The small ($30 million market cap) announced this week that it would supply 161 of its GenDrive fuel cells to Kroger for its fleet of electric lift trucks, which move products on facility floors. Also this week, Roth Capital cleantech analyst phillip Shen initated coverage of PLUG with a buy and a price target of $4. PLUG stock, which was as high as $9 in January, has dropped to $2.27.
* Denotes a client of Allen & Caron, publisher of this blog