Ballard Power Systems, Inc. BLDP announced that it has signed a Development Agreement worth $9 million with Siemens AG for developing a zero-emission fuel cell engine. Per the agreement, the company’s 200 kilowatt (KW) fuel cell engine will be utilized in Siemens’ trains in its Mireo railway platform.
The Mireo train platform features energy-efficient components and intelligent onboard network management that will enable the Mireo rail trains to consume 25% less energy than conventional trains. Notably, once Ballard Power’s fuel cell engines are developed, they will be used to run the energy-efficient Mireo trains.
Ballard Power is expected to gain from this deal. The increase in demand for fuel cell technology from domestic and international clients is expected to boost the order book of the company.
Fuel Cell Technology for Cleaner Future
Fuel cells have become a viable option for vehicles due to inherent zero emissions, reliability and economic benefits. Consequently, this has increased the demand for fuel cell-technology which is cheaper than conventional power sources. Naturally, this technology is gaining importance and is witnessing increased adoption in trains, trams, transit buses and commercial trucks.
Notably, the Development Agreement with Siemens, backed by Ballard Power’s fuel cell technology, is anticipated to provide customers with flexible train solutions for various suburban routes. The deal will enable Siemens to reduce expenses on electrification and wire infrastructure. Further, this step is expected to enable the replacement of diesel-powered rail vehicles.
Ballard Power along with other companies like Plug Power PLUG and FuelCell Energy, Inc. FCEL are consistently investing in research and development activities to introduce novel fuel cell alternatives for a cleaner future.
Ballard Power Systems has outperformed the industry in the last year. The company’s shares have returned 141.8% compared with the industry’s rally of 47.6%.
The favorable price performance can be attributed to the company’s strong order backlog which touched $236.8 million at the end of third-quarter 2017 and improvement in year-to-date revenues by 48%.
Ballard Power currently carries a Zacks Rank #3 (Hold). A better ranked stock from the same space is Stoneridge, Inc. SRI that has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stoneridge posted third-quarter 2017 earnings from continuing operations of 36 cents per share, beating the Zacks Consensus Estimate of 32 cents by 12.5%. The company’s 2017 estimates have increased to $1.49 per share from $1.46 per share in the last 30 days.
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