VANCOUVER, BC and ROCKWALL, Texas - Ballard Power (TSX:BLDP) Systems (NASDAQ:BLDP), a leading provider of innovative clean energy and fuel cell solutions, has been selected for two grants totaling $40 million from the U.S. Department of Energy (DOE). These grants are designated to support the construction of Ballard's integrated fuel cell production facility, Ballard Rockwall Giga 1, in Rockwall, Texas.
The proposed Gigafactory, which is expected to cost around $160 million net of the DOE grants, will be situated in Rockwall Technology Park, covering 22 acres. Ballard's investment, planned to span from this year through the end of 2027, aims to establish a manufacturing hub capable of producing 8 million membrane electrode assemblies (MEAs), 8 million bipolar plates, 20,000 fuel cell stacks, and up to 20,000 fuel cell engines annually, equivalent to 3 gigawatts of fuel cells.
These grants are part of the DOE's Hydrogen and Fuel Cell Technologies Office's initiative, under the Bipartisan Infrastructure Law, which allocates $750 million for Clean Hydrogen Electrolysis, Manufacturing, and Recycling. Ballard's $40 million is split into a $30 million grant for advanced proton exchange membrane (PEM) MEAs and automated stack assembly, and a $10 million grant for a next-generation flexible graphite bipolar plate manufacturing line.
Randy MacEwen, Ballard's President & CEO, expressed gratitude for the DOE's support and highlighted the importance of the grants in accelerating the U.S. towards environmental sustainability and energy security. Dr. Lee Sweetland, Ballard's Chief Transformation Officer, emphasized the critical nature of investing in innovative manufacturing to meet future market demands and reduce costs.
The Rockwall Economic Development Corporation (REDC) has also played a significant role in supporting the project by providing land, financial incentives, and assistance with planning and approval processes.
Ballard's decision on this investment is pending customary conditions, including necessary approvals and definitive agreements. The company also seeks additional funding from other U.S. government programs.
This development is based on a press release statement.
InvestingPro Insights
Amid the recent announcement of Ballard Power Systems receiving substantial grants from the U.S. Department of Energy, investors are closely watching the company's financial health and market performance. According to InvestingPro data, Ballard Power Systems currently holds a market capitalization of $832.36 million USD. Despite a significant revenue growth of 25.05% in the last twelve months as of Q4 2023, the company's gross profit margin has been negative at -21.33%, reflecting some of the challenges in profitability it faces.
Moreover, the company's stock price has been quite volatile, with a 52-week low price percentage of 48.95%, and has experienced a notable decline over the past six months, with a total price return of -35.27%. These metrics might be of particular interest to investors considering Ballard's future potential in light of the recent federal support for their manufacturing initiatives.
Two InvestingPro Tips that may be relevant to investors in this context are: Ballard holds more cash than debt on its balance sheet, which could provide some financial flexibility in its expansion efforts; and the company's liquid assets exceed its short-term obligations, suggesting a degree of short-term financial stability. However, analysts are not anticipating the company to be profitable this year, and the stock has been quickly burning through cash, which could be a concern for potential investors.
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