VANCOUVER, BC - Ballard Power Systems (NASDAQ: NASDAQ:BLDP) (TSX: BLDP), a leader in fuel cell technology, has been granted $54 million in investment tax credits by the U.S. Internal Revenue Service. This incentive, part of the Qualifying Advanced Energy Project Tax Credit under the Inflation Reduction Act, aims to bolster domestic clean energy manufacturing. Ballard intends to allocate these funds towards establishing a new fuel cell Gigafactory in Rockwall, Texas.
The company's President & CEO, Randy MacEwen, expressed that Ballard is at the forefront of major trends such as decarbonization, energy security, and technological innovation. He highlighted the positive policy environment shaped by initiatives like the U.S. National Blueprint for Transportation Decarbonization and the National Zero-Emission Freight Corridor Strategy. MacEwen noted the increasing customer demand for high-volume, cost-effective zero-emission fuel cell products.
This latest tax credit, combined with a previously announced $40 million in U.S. Department of Energy grants, totals $94 million in federal support for the Rockwall Gigafactory. Ballard anticipates this facility will address the capacity limitations of their existing North American production by late 2027, in line with the company's growth projections.
The planned Gigafactory, named Ballard Rockwall Giga 1, will be sited on a 22-acre parcel in Rockwall Technology Park. Phase I involves an investment of approximately $110 million, after accounting for expected DOE grants and tax credits. The facility will focus on manufacturing membrane electrode assemblies (MEAs), bipolar plates, stacks, and engines. Ballard's COO, Mark Biznek, remarked on the strategic importance of the facility in their global manufacturing strategy and its projected financial returns.
The Phase I investment is expected to yield an annual production capacity equivalent to 3 gigawatts of fuel cells. Ballard's next-generation fuel cell products will benefit from technological advancements, supply chain collaboration, and volume production processes. A final investment decision on this facility is anticipated later in 2024, pending regulatory approvals and definitive documentation.
Ballard Power Systems, known for its zero-emission PEM fuel cells, is committed to powering sustainable transportation, including buses, trucks, trains, marine vessels, and stationary power.
InvestingPro Insights
As Ballard Power Systems (NASDAQ: BLDP) (TSX: BLDP) gears up for the development of its new fuel cell Gigafactory in Rockwall, Texas, the financial health and market performance of the company come into focus. According to recent data from InvestingPro, Ballard holds a market capitalization of $832.33 million, reflecting the scale of its operations within the clean energy sector.
The company's commitment to innovation and expansion is mirrored in its revenue growth, which stood at a notable 25.05% over the last twelve months as of Q1 2023. Despite this growth, InvestingPro Tips reveal that Ballard is quickly burning through cash and suffers from weak gross profit margins, with a reported gross profit of -$21.83 million and a margin of -21.33% over the same period.
Investors should note that the stock price has been quite volatile, and the company is trading near its 52-week low, with a price to book ratio of 0.84 as of the last twelve months of Q1 2023. These metrics may be crucial for those considering Ballard's stock, especially in light of the company's strategic investments in the Gigafactory. Ballard does not pay a dividend to shareholders, which could be a point of consideration for income-focused investors.
For a more comprehensive analysis, there are additional InvestingPro Tips available that could provide deeper insights into Ballard's financial health and market prospects. To explore these tips and leverage the expertise of InvestingPro, interested readers can visit https://www.investing.com/pro/BLDP. Don't forget to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking more valuable market data and insights.
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