Ballard Power Systems (BLDP.T), announced today that the company continues to operate with its “local for local” mandate in its plan to deepen its global manufacturing footprint in Europe, the U.S. and China.
As such the company has entered into an investment agreement with the government of Anting in Shanghai’s Jiading district to establish its new Chinese headquarters, membrane electrode assembly (MEA) manufacturing facility, and R&D centre at a site strategically located at the Jiading Hydrogen Port.
Ballard intends to invest approximately $130 million CAD over the next three years to enable annual production capacity at the new MEA production facility of approximately 13 million MEAs, which in turn will supply approximately 20,000 engines.
The facility will also include space to assemble approximately 600 engines annually to support the production and sale of Ballard engines in the rail, maritime, off-road, and stationary markets in China.
Ballard completed its MEA manufacturing expansion in Canada back in 2021, with the new MEA capacity coming online in China, the company now expects its global MEA capacity to support total demand requirements through the second half of the decade.
The investment in the Chinese facility is expected to reduce MEA manufacturing costs, align with China’s fuel cell value chain localization policy and put Ballard in a stronger position in the hydrogen fuel cell demonstration cluster regions and for the post-subsidy market.
The new facility is anticipated to be in operation in 2025 to meet expected market demand in China, including the WeiChai-Ballard Joint Venture for the bus, truck and forklift markets. The annual production capacity of the Weichai-Ballard joint venture facility is approximately 40,000 stacks and 20,000 engines.
Randy MacEwen, Ballard CEO, commented, “Our global manufacturing vision for 2030 is to have scaled ‘local for local’ manufacturing of leading fuel cell engines and components in our core regional markets of Europe, North America and China to support future industry growth patterns and volumes across our verticals. In the case of China, we already have volume manufacturing capacity for fuel cell engines, bipolar plates and stack assembly at our WBJV. With our continued high conviction on long-term scaled adoption in China of fuel cell electric vehicles for medium- and heavy-duty motive applications, we are now addressing long-term capacity in that market for our proprietary MEAs. We believe China is a market headed for a significant demand break-out as hydrogen infrastructure scales over the coming years and as our new MEA production facility comes online.”
Ballard also announced today that it has signed a non-binding memorandum of understanding with Weichai Power where Weichai Power agrees to make an equity investment for 2% of Ballard’s new MEA manufacturing company.
In other news, Ballard announced recently that it had signed a contract with Stadler to supply fuel cell engines to power the first hydrogen train in the United States.
The contract to provide the hydrogen-powered train was awarded to Stadler by San Bernardino County Transportation Authority, with an option of additional trains in the future. The train is expected to be in service in San Bernardino, California in 2024 and will seat over 100 passengers.
Ballard reported $1.0 billion USD in cash and cash equivalents as of June 30, 2022 with $20.93 million in revenues for the three months ending June 30, 2022 for a total comprehensive loss of $57.35 million for the quarter.
Currently the company trades at $8.50 CAD per share for a market cap of $2.53 billion.
