How to survive the harsh times--Chinese fuel cell companies have these strategies

The global fuel cell industry, once seen as a cornerstone of the hydrogen economy, is currently facing significant headwinds that have hampered growth and financial performance. Despite governmental support for clean energy, leading companies, such as Plug Power and Ballard Power Systems, are experiencing the most difficult time this decade.

For full year 2024, Plug Power reported revenue of US$628 million, declining 30% yoy and the company faced a net loss of approximately US$2.1 billion, reflecting a harsh market environment.

Given ongoing market conditions Plug Power initiated an adaptation strategy called “Project Quantum Leap”. These measures are expected to include additional reductions in the workforce in early 2025, furthering its rooftop facility consolidations, additional reductions in discretionary spending, additional reduction and leveraging of inventory, and limiting capital expenditures to near-term critical requirements. Project Quantum Leap is targeted to reduce annual expenses in the range of $150 million to $200 million.

Ballard Power, another global leader of fuel cell industry, also reported disappointing financial results, with Q4 2024 revenue dropping by 48% to $24.5 million and a full-year revenue decline of 32% to $69.7 million. Gross margins remained negative at -32%, reflecting cost pressures and lower sales. Ballard Power is restructuring operations to cut costs by 30% and focusing on expanding its partnerships in heavy-duty transport and stationary power applications.

I won’t discuss too much about Plug and Ballard in this article as I focus on their competitors on the other side of Pacific Ocean-Chinese fuel cell players. I will discuss fuel cell market environment in China and performance of major Chinese fuel cell companies, and the most important issue-their strategies to survive these difficult times.