Power Engineering - US fuel cell firms industry stronger but not yet profitable says PWC

26 September 2003 - The North American fuel cell industry enjoyed a 71 per cent increase in revenues to $219m in 2002, up from $128m in 2001. But according to PricewaterhouseCoopers 2003 Fuel Cell Industry Survey, the industry also experienced significant operational losses as heavy spending on research and development (R&D) continued in moving fuel cell technology towards commercialisation.

The survey was released in conjunction with the opening of the Eighth Grove Fuel Cell Symposium in London on 24 September 2003. The survey focused on the 2002 year-over-year financial information of the 16 publicly traded companies based in the US and Canada that are engaged in the areas of fuel cell production, system integration and related fuelling infrastructure. Key findings included:

The top three revenue earners in 2002 were Ballard Power Systems, FuelCell Energy and Quantum Fuel Systems Technologies Worldwide.
R&D spending increased by $42m or 19 per cent between 2001 and 2002.
Operating profits were impacted by the R&D spending and the high cost of low volume production for early-stage customers, resulting in losses totalling $405m, an increase of 35 per cent from $301m in 2001.

John Webster, leader of the PricewaterhouseCoopers Canada's Fuel Cell practice based in Vancouver, said: "While R&D expenditures outweighed revenues across the sector we are encouraged by the revenue growth experienced by many companies in the survey.

"Although it is uncertain what the short-term results of these companies will be, we expect the fuel cell industry to continue to grow into a significant global business, estimated at $46bn by 2011."
The majority of the companies surveyed by PricewaterhouseCoopers were focused on developing proton exchange membrane (PEM) fuel cell technology and related fuelling infrastructure. Primarily designed for use in the transportation market, PEM powered products are expected to reach large-scale commercial production after portable and stationary applications. Securing long-term financing is critical to these companies.

Alistair Nimmons of PricewaterhouseCoopers and co-author of 'PricewaterhouseCoopers 2003 Fuel Cell Industry Survey' said: "The survey found that strategic alliances and partnerships that leverage complementary strengths remain prominent in the fuel cell industry. The emergence of fuel cell-specific venture capital groups is encouraging, given the general downturn in the public capital markets between 2001 and 2002."

As with the results of North American financial markets during the period, share prices in the fuel cell industry declined in 2002, and overall market capitalisation of the companies surveyed dropped 70 per cent.

John Webster added: "The survey revealed that Canadian fuel cell companies reported revenue from customers in several countries including Canada, the US, Japan, Germany and the UK, while US companies did not report revenues from foreign countries."

Add RSS Feed