Ballard Power is backing the wrong horse in fuel cell technology, this expert says

Ballard Power (Quote, Chart, TSX, NASDAQ:BLDP) may be popping on the market over the past week but don’t think that this stock is going anywhere, says Tim Nash of Good Investing, who claims Ballard’s focus on hydrogen fuel cell is out of step with the times.

Vancouver-based Ballard Power has made a couple of recent moves that have caught investor interest, first on August 29 through a deal with China’s Weichai Power which will see Weichai acquire a 19.9 per cent stake in Ballard for $163 million and create of joint venture in China with Ballard to support China’s fuel cell electric vehicle market.

Ballard president and CEO Randy MacEwan says the deal is a milestone for the company. “Ballard is thrilled to partner with Weichai, the world’s largest manufacturer of diesel engines, with a corporate strategy to be China’s leader in zero-emission fuel cell powertrains and fuel cell electric vehicles.”

Two days later, Ballard announced the sale of non-core assets related to its power manager Protonex business for $16.0 million in cash, with the company indicating that the move is part of its attempt to clear the table of business that’s not related to its fuel cell focus.

But it’s that hydrogen fuel cell concentration that Nash sees as questionable.

“I think it was almost ten years ago when this company was in its heyday,” says Nash, former blogger under the title the Sustainable Economist, to BNN Bloomberg. “At that time, the thesis was that mass-market vehicles were going to be powered by hydrogen, and I would argue that we know now that that is not the case. The technology is much more moving towards electrification and so really looking at batteries rather than hydrogen fuel cells.”

“I believe it’s Toyota that has announced that they are going towards hydrogen fuel cell technology, which is interesting. Toyota has always been a little bit different. They were the leaders in hybrid cars, but whereas everyone else is moving towards electric vehicles, they’re kind of bucking the trend by moving towards fuel cells,” he says.

Ballard Power’s share price went sliding between last November and early February and has since been trading sideways — at least, up until the end of August where it shot up as high as 35 per cent.

Nash says there’s a hit-or-miss quality to Ballard that comes with its narrowed focus.

“It’s one of these chicken and egg scenarios where if you don’t have hydrogen stations around town, it’s going to be really annoying if you own a hydrogen car,” he says. “It would make sense if they were to go after fleets, it would sense in certain regions where they don’t have all the gas stations if they were to adopt this as the technology.”