A Guide to Investing in Fuel Cell Stocks

We recently published a piece on how hydrogen fuel cells might be used to power drones that carry humans, leading one of our readers to remark, “not the ‘hydrogen economy’ again!” We share those sentiments, having watched fuel cell technology take off at a crawl with no widespread adoption apparent. While fuel cells are being used for large-scale energy backup solutions, we’re still a long way from having fuel cell products that can power our smartphones. Elon Musk said fuel cells for cars are b******t, yet one of his competitors has now pre-sold billions worth of fuel cell-powered semi-trucks. It’s a good time to catch up on what’s going with the hydrogen economy. Before we do that, here’s a quick primer for anyone that’s coming up to speed on the promise of hydrogen fuel cells.

What are Fuel Cells?

At some point in the past, you’ve probably heard of the promise that fuel cells hold for generating electricity cleanly and cheaply. Using only hydrogen and oxygen, a fuel cell can generate cheap and clean electricity with the only byproduct being pure water. According to fuel cell vendor FuelCell Energy:

Similar to a battery, a fuel cell is comprised of many individual cells that are grouped together to form a fuel cell stack. Each individual cell contains an anode, a cathode and an electrolyte layer. When a hydrogen-rich fuel such as clean natural gas or renewable biogas enters the fuel cell stack, it reacts electrochemically with oxygen (i.e. ambient air) to produce electric current, heat and water. While a typical battery has a fixed supply of energy, fuel cells continuously generate electricity as long as fuel is supplied.

Credit: FuelCell Energy

Fuel cell technology is hardly new, having first been invented in 1838, though there are many different variations of the technology in use today. In looking at the opportunity, we can break down fuel cell use cases into three broad areas: portable, stationary, and transportation. In order to gauge the progress being made in fuel cell development, we can look at some publicly-traded fuel cell stocks.

Investing in Fuel Cell Stocks

Investing in cleantech is trendy, but you can’t always do good by doing good. Just look at how bad solar stocks have bombed. On the other hand, you have companies like Next Era Energy which is now the biggest producer of renewable energy in the world. As for the fuel cell investment theme, the entire thing feels like success is just around the corner and you need to get on board the money train NOW if you want to reap millions in rewards. “Could Plug Power Be a Millionaire-Maker Stock?” asked the Motley Fool in an article last week about one of the biggest fuel cell stocks out there by market capitalization. We can’t link to the clickbait article without feeling dirty, but we’ll tell you the gist of it in just a bit. They’re things we pointed out half a decade ago that still hold true today.

We first started following fuel cell stocks about six years ago and have some general observations to make around the investment thesis. Firstly, there is no such thing as a “fuel cell industry classification” which means that fuel cell stocks aren’t all classified in the same GICS category. This makes it difficult to develop an ETF around the theme, though there used to be an index which was being calculated between the years 2000 and 2007. The now-defunct WilderHill Fuel Cell Index contained 19 companies of which 6 went bankrupt, aren’t trading anymore, or were suspended. That’s almost a third of all constituents blowing up, and it’s no surprise the ETF followed suite. What we were able to do at the time was scrounge together a list of ten pure-play fuel cell stocks to watch.

A List of Ten Pure-Play Fuel Cell Stocks

Back in 2014, we put together a list of ten fuel cell stocks across the globe along with their market caps and returns.

  Ticker MCAP 3-MO 1-YR 5-YR Country
Ballard Power Systems BLDP 242 -43% +16% +4% Canada
FuelCell Energy FCEL 468 -23% +17% -45% USA
Hydrogenics Corporation HYGS 134 -29% -29% +30% Canada
Plug Power PLUG 528 -31% +65% -55% USA
HyperSolar HYSR 9 +16% +257% -90% USA
Ceres Power CWR.L 102 -15% +7% -94% UK
Ceramic Fuel Cells LON:CFU 13 -47% -84% -97% Australia
Proton Power Systems P6K0.SG 44 -39% -3% -3% UK
AFC Energy AFC.L   -43% -68% +6% UK
ITM Power PLC ITM.L 82 +52% -15% +106% UK

The returns reflect how volatile these stocks were back then. That hasn’t changed a bit, and today it seems that some of the major players are on an upswing again. Today, we’re going to go through each of these companies to see what’s been happening over the past 6 years. We’ll try to ignore the noise of historical share price performance and focus instead on growing revenues which show that fuel cells – in their various form factors – are gaining traction. Then, we’re going to look at any new names we can add to this comprehensive list of fuel cell stocks. Let’s start with the only over-the-counter company on the above list – HyperSolar.

Half a Penny Stocks

We used to spend a lot of energy dissecting the failings of OTC companies until we decided just to stop covering OTC stocks entirely. The only reason we ever did cover them was to warn people with good intentions about just how bad OTC companies are for investors. As for HyperSolar, here’s what one of our MBAs noted back in 2014.

HyperSolar is an OTC company “developing a fuel cell using nanotechnology”.  With $43,000 in cash and no revenues, there isn’t anything worth looking at here.

Credit: Nanalyze

Seems like nothing has changed, with HYSR shares trading at half a penny giving the company a market share of under $10 million. We have better things to do with our time than figure out why yet another OTC company is slowly descending into nothingness. Moving on.

Plug Power Powers Forklifts

Click for company website

Perhaps the most talked-about fuel cell stock out there is a $1.36 billion market cap company called Plug Power. There’s always something happening with PLUG, a company that first came across our radar on February 26th, 2014, when they announced a multi-site purchase order from Walmart to roll out the GenDrive hydrogen fuel cell solution to power electric lift truck fleets at six North America Walmart distribution centers. This led to Plug being among the most traded stocks on the NASDAQ following this announcement. If you bought shares in PLUG the day that announcement was made, you’d be down about 10% today compared to a Nasdaq broader market return of +109%. Not exactly a millionaire-maker stock, though all the fuel cell fans will tell you Rome wasn’t built in a day. Revenue appears to be growing over time:

Credit: Yahoo Finance

As the Motley Fool clickbait piece correctly pointed out, this is a company that is burning a lot of cash, they’re issuing shares left and right to support this burn rate, and they have a history of not being able to duplicate the rosy pictures they paint for investors. In order to be fair to a company which we haven’t looked at since our 2015 article on The Poor Performance of Fuel Cell Stocks, we published an article for premium subscribers which details why everyone is getting excited about Plug Power all over again. If management is to be believed, 2023 is when Plug Power finally makes it happen.

What Happened to FuelCell Energy Stock?

Click for company website

Apparently, that’s a popular search term, leading us to believe that the company’s volatile share price has people asking lots of questions. FuelCell Energy is a $400 million market cap company that describes itself as a “global leader in the design, manufacture, operation and service of ultra-clean, efficient and reliable fuel cell power plants.” If we’re going to have a network of vehicles running on fuel cells, we’ll need the means to power them. The problem is, Fuelcell has basic financials that look extremely depressing.

Credit: Yahoo Finance

It’s okay to burn shed loads of cash, as long as you’re using it to capture market share. That’s what Plug Power is doing. But what’s not negotiable is when you’re supposedly participating in a high-growth industry, but your revenues are trending in the exact opposite direction of growth. It just makes everyone wonder, what happened to FuelCell Energy stock?

Cummins Ups Their Fuel Cell Game

Some good news for our next company, Hydrogenics, that was providing hydrogen generation products and fuel cells last time we checked along with strong yearly revenue growth. Late last year, $24 billion engine maker Cummins stepped in to acquire Hydrogenics for $290 million stating that “Hydrogenics is one the world’s premier fuel cell and hydrogen production technologies providers and their expertise and innovative approach will strengthen Cummins’ fuel cell capabilities.” Our next company is also working with Cummins on fuel cells.

Natural Gas, Hydrogen, or Biofuels

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Based out of the U.K, Ceres Power is a $980 million market cap company that’s developing SteelCell, the Solid Oxide Fuel Cell (SOFC) technology of choice for the world’s leading automotive manufactures. The SteelCell, operating at a temperature between 500 and 600 degrees Celsius, is a perforated sheet of steel with a special ceramic layer that converts fuel directly into electrical power. As for revenues and losses, this is the sort of trend we like to see:

Credit: Yahoo Finance

The SteelCell can generate power from conventional fuels like natural gas and from sustainable fuels like biogas, ethanol, or hydrogen. Ceres Power has an excellent cash position of around $79 million following the receipt of additional financing from some notable names. German industrial giant Bosch recently upped their stake in Ceres Power from 4% to 18%, prompting Weichai Power of China to re-up their stake to 20%. Weichai is also a major investor in our next fuel cell company.

Fuel Cells for Backup Power Systems

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With a market cap of $2.3 billion, Ballard Power Systems is the biggest company on our list by market capitalization with a variety of fuel cell power products on offer. In August of 2018, Weichai Power became Ballard’s largest shareholder at just under 20% ownership along with a commitment for “at least 2,000 fuel cell commercial vehicles.” Revenues appear to be moving in the right direction for Ballard, but not losses.

Credit: Yahoo Finance

In looking at Ballard’s latest earnings report, the company is dabbling in lots of fuel cell application areas, but their bread and butter is “Medium- and Heavy-Duty Motive use cases that feature heavy payload, long daily range and a need for fast refueling.”

Ceramic Fuel Cells or Bust

Ceramic Fuel Cells was an Australian company developing small natural gas fuel cells for homes and small businesses. In 2014, the Company had sold 210 units of their fuel cell system with a total of 500 deployed units and 2014 revenues of $4.9 million for the Company on losses of $17 million. They went into liquidation the following year and are no longer being traded on the ASX. Seems like an abnormally large number of companies that dabble in this space go bankrupt, so beware of trying to catch falling knives.

More Fuel Cells for Forklifts and Buses

Click for company website

German company Proton Motor Fuel Cells develops its own fuel cells and combines them with selected, tailor-made components for integration-ready fuel cell and hybrid systems. Their site jumps around between English and German so much it’s tough to tell what they’re doing these days. In looking at the basic financials, burning cash is something they’re getting better at each year.

Credit: Yahoo Finance

If there’s one thing that history taught us it’s that zee Germans are always good at making comebacks.

Alkaline Fuel Cells

“After a decade of research and development, AFC Energy is now bringing its H-Power technology platforms to market, establishing an emissions free solution to the world’s energy challenges,” says AFC Energy. They’re a $78 million U.K. company that’s developing alkaline fuel cells and used to have revenues at some point before they dried up. Now, all they do is burn cash while hopefully developing something to sell.

Credit: Yahoo Finance

There may be “strong market interest” for whatever it is the company is developing, but why would investors be willing to wait when the fuel cell industry is already long on promises and short on execution?

ITM Power and Hydrogen Refueling Stations

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ITM Power is a $1.35 billion market cap British manufacturer of polymer electrolyte membrane (PEM) electrolyzers for splitting water into hydrogen and oxygen. Big news for the company came late last year when Linde – a $100 billion chemicals company – entered into a joint venture with ITM Power which involves “delivering green hydrogen to large scale industrial projects, principally those with an installed electrolyzer capacity of 10 Megawatts and above.” That announcement coincided with a strategic investment by Linde of $46 million for a total capital raise of around $64 million. They’ll need it, based on the trend of losses increasing each year.

Credit: Yahoo Finance

About five years ago we published one of our pieces on fuel cell stocks (it’s been since rolled into this guide) and the founder of ITM came by to say a few words. Here are his comments verbatim which – though made five years ago – reflect the thoughts of a subject matter expert:

It is the only PEM electrolyser with P2G gas plant injecting gas directly into the German gas grid and is probably the world leading technology in this sector. It is also, as you say, involved widely in H2 refueling stations mainly in UK and California right now and also has JV’s with e.g. Hyundai. ITM also has very high efficiency and economic fuel cell membrane technology which is rarely discussed but is well patented.

I believe that ITM is pushing all the right buttons at the moment, and its decision to focus on PEM electrolyser P2G and gas supply stations I believe will pay off and your faith will eventually be rewarded. So, keep the faith!

Credit: ITM founder’s comment on one of our old articles

That same gentleman told us to check out another U.K. company called Intelligent Energy which was acquired by the Meditor Group in October 2017. Now that we’ve gone through our original list of ten fuel cell stocks, let’s talk about some new entrants in this space.

Even More Fuel Cell Companies

Bloom Energy and Bloom Boxes

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No fuel cell article would be complete without mentioning Bloom Energy, a $1.05 billion company that we last looked at in an article titled “Bloom Energy Stock on Offer in a Planned IPO.” The company builds 15-ton boxes that are capable of providing energy to critical functions when the power grid goes off. Datacenters would be a good use case example. While revenues continue to grow, they’re not reigning in losses.

Credit: Yahoo Finance

If the stock market goes kaput again because of the pandemic that’s wreaking havoc, funding will dry up, and they’ll need to raise capital by either selling shares and diluting existing shareholders or taking on more debt. This past February, Forbes published a lengthy investigative piece on Bloom titled “How Bloom Energy Blew Through Billions Promising Cheap, Green Tech That Falls Short,” which claims the technology is “too dirty and too costly.” That’s partly because renewable energy like solar and wind has become so cheap now.

Nordic Fuel Cell Stocks

A long-time reader of ours, Nico, faithfully sends us interesting stocks to cover across the pond that may be flying completely under everyone’s radar. He found a few names in the Nordics that he believes are worth taking a look at, so we’ll leave you with some homework since this guide is already starting to look like War and Peace. Check out PowerCell Sweden which was founded in 2008 as an industrial spinout from the Volvo Group. Like others we’ve mentioned, they’re working with Bosch though they describe this work as “temporary.” Also check out NEL Hydrogen, a Norwegian firm with more than 3,500 cost efficient electrolyzers installed around the globe. (An electrolyzer separates water into hydrogen and oxygen.) NEL has been around since 1927 and claims to have some of the most efficient electrolyzers on the market. They’re also working on charging stations for Fuel Cell Electric Vehicles (FCEVs) produced by our next company.

Hydrogen Fuel Cell Electric Sleeper Semi-Trucks

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Probably the most popular thing that’s happening right now with fuel cell stocks surrounds a Salt Lake City company called Nikola Motor Company which developed a $350,000 electric semi-truck which they’re already taking pre-orders for. (They’re also named after Nikola Tesla.) According to Crunchbase, the company had taken in around $461 million in funding from investors that include Bosch and the U.S. Department of Energy. Now here’s where things get interesting.

In a previous article, we talked about the problem with special purpose acquisition companies or SPACs (also called blank check companies). They provide an alternative way to offer shares the public instead of going the IPO route. This is how Virgin Galactic recently went public, and it’s also what Nikola decided to do with a SPAC called VectoIQ.

With Blackrock as a lead investor, Nikola hopes to raise around $700 million for building out a production line so they can fill the $10 billion in cancelable pre-orders they have taken in. We wrote an entire piece on Nikola Motors and advised that retail investors take extreme caution here. Similar to what we observed with Virgin Galactic, a whole troupe of excited millennials on Robinhood are bidding up VectoIQ shares to ridiculous levels without a firm understanding of what’s actually going on here. Note that when finalized, these publicly traded shares will only represent about 6% of the company. The same thing happened with Hyliion, another fuel cell trucking company we covered in our piece on Hyliion – Another Electric Semi Truck IPO.

Your Fuel Stock Goes Here

That’s about all the fuel cell stocks we care to know about right now, but if we missed your sacred cow, not to worry. If your publicly-traded fuel cell company didn’t make this list, drop us a note in the comments section below please. If your stock trades on the OTC market, you probably don’t want us writing about you because we have nothing good to say about OTC stocks. We’ve seen countless examples of incompetent management teams and even downright scams. We will have our most eagle-eyed MBA tear your financial filings to shreds, finding every single red flag there is. Up-list first, then give us a shout. Given how many fuel cell companies have gone bankrupt in the past, the last thing investors want more of is risk.

As oil prices fall, the notion of a fuel cell car becomes less appealing. Even if that changes, the demand for clean energy transportation will drive investors towards the battery-powered electric car which may get much better if Mr. Musk’s battery announcement is as big as he says it is. Back in 2014, we came to the following conclusions about fuel cell stocks. The same holds true today.

  • Short term fluctuations make the “fuel cell sector” extremely volatile which is good for speculators but bad for investors.
  • No ETFs are available for the “fuel cell sector” so retail investors will most likely try to cherry-pick the “best” companies for exposure
  • While transportation applications draw the most attention from investors, stationary applications are proving to be the most viable
  • Over the past 10-years, you would have lost a great deal of money by “buying-and-holding” the average fuel cell company.

If you’re still inclined to play the fuel cell theme, don’t just bet on one horse. There may be no fuel cell ETF right now but with zero fees at most brokerage firms, there’s no added cost to use dollar-cost-averaging and invest in more than one name. This is a volatile space, and spreading your transactions out over time will help reduce your market timing risk.

Update 02/3/2022: There are now at least three fuel cell ETFs.


It’s tough to say why so many investors are still holding on to the big promises of fuel cell technology. While the Nikola story gives us some hope, there are just far too many other disruptive technology themes we’d rather be focused on. If this article is popular (in other words, you share it on social media), we’ll revisit the theme more often, otherwise we’ll check in about once a year to see if there are any major updates.

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