Extending the 1.3% drop they suffered on Monday, shares of Plug Power (NASDAQ: PLUG) are continuing to slide today. Similar to yesterday, Plug Power didn’t report anything on Tuesday that led investors to hit the sell button. Instead, the stock’s fall is likely a reaction to the positive news that a noteworthy fuel cell peer shared this morning. Paring back some of its losses on the day, Plug Power’s stock, which had dipped as much as 4.7% at one point today, was down 3.9% as of 3:55 p.m. EDT.
There’s a new fuel cell name in town, Hyzon Motors, and investors focused on this niche of the renewable energy industry are starting to take notice, adding it to their list of the usual fuel cell-oriented suspects: Ballard Power Systems, Bloom Energy, and FuelCell Energy. On track to merge with the SPAC Decarbonization Plus Acquisition (NASDAQ: DCRB), Hyzon Motors brands itself as “a global supplier of zero-emissions hydrogen fuel cell powered commercial vehicles, including heavy duty trucks, buses and coaches.” And apparently, the company foresees good things happening in the rest of 2021 and into 2022.
Hyzon Motors reported today that it expects to achieve its 2021 sales guidance of $37 million. In addition, the company forecasts achieving its 2022 outlook as well, which includes revenue of $198 million and deliveries of 623 medium and heavy duty trucks. According to management, its optimism regarding the achieving of its 2022 forecast comes from the fact that the company’s orders and non-binding memorandums of understanding have climbed to $83 million, representing an increase of over 100% from Feb. 12.
While supplying fuel cell modules for these sorts of vehicles isn’t Plug Power’s bread and butter, the company has its sights on this market. On the company’s Q4 2020 conference call, for example, Plug Power CEO Andy Marsh addressed the company’s interest in this, stating, “We do have discussions going on in the United States and elsewhere, especially with a focus on heavy-duty vehicles.” Later in the call, Marsh estimated that in 2024, when the company expects to exceed $1 billion in revenue, the transportation market will play an important role, saying that he and the rest of management “expect to be in the $500 million range and the rest will be involved in large-scale stationary [power] and on-road vehicles.”
Should Plug Power investors panic after Hyzon’s announcement? Absolutely not. The competition may ramp up, but Plug Power has established itself as a leader in the fuel cell industry — one that may not be so easy to unseat. Shareholders, however, should continue to closely monitor Hyzon Motors since the company hasn’t proven that it could make good on its optimistic forecasts yet. And even if it does achieve its guidance, it’s far from a guarantee that Plug Power won’t be able to grab its own slice of the transportation industry market share.
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