About Ballard Power Systems
Ballard Power Systems Inc. (Ballard) engages in the design, development, manufacture, sale and service of PEM fuel cell products for a variety of applications. The company is focusing on its power product markets of Heavy-Duty Motive (consisting of bus, truck, rail and marine applications), Material Handling, and Stationary Power Generation, as well as the delivery of Technology Solutions, including engineering services, product and systems integration services, and related technology transfer for a variety of proton exchange membrane (PEM) fuel cell applications. With the acquisition of Ballard Motive Solutions Ltd. (BMS) in 2021, Ballard offers hydrogen fuel cell powertrain integration solutions. Ballard’s PEM fuel cell products feature high fuel efficiency, low operating temperature, low noise and vibration, compact size, quick response to changes in electrical demand and modular design. Embedded in each Ballard PEM fuel cell product lies a stack of unit cells designed with Ballard’s proprietary technology, which include membrane electrode assemblies, catalysts, plates, and other key components; and which draw on intellectual property from the company’s patent portfolio together with its extensive experience and know-how, in key areas of PEM fuel cell stack design, operation, production processes and system integration. Strategy The company strives to build value for its shareholders by developing, manufacturing, selling and servicing zero-emission, industry-leading PEM fuel cell technology products and services to meet the needs of the company’s customers in select target markets. More specifically, the company’s business plan is to leverage its core competencies of PEM fuel cell stack technology and engine development and manufacturing, the company’s investments in advanced manufacturing and production capacity, and the company’s product portfolio by marketing its products and services across select large and attractive addressable market applications and select geographic regions. The company typically selects its target market applications based on use cases where the comparative user value proposition for PEM fuel cells powered by hydrogen are strongest – such as where operators value low emission vehicles that require high utilization, long driving range, heavy payload, fast refueling, and similar user experiences to legacy diesel vehicles – and where the barriers to entry for hydrogen refueling infrastructure are lowest – such as use cases where fuel cell vehicles typically return to a depot or hydrogen hub for centralized refueling and don’t require a distributed hydrogen refueling network. The company’s target markets include certain medium- and heavy-duty mobility applications of bus, truck, rail and marine, along with certain off-road mobility and stationary power applications. The company’s target markets are the geographic regions of China, Europe, and North America. The company’s strategy is built on 5 key themes: Double Down In Fuel Cell Stack And Module: Invest in leading technology and products to provide leading value to the company’s customers and end users based on a total cost of ownership basis. Selectively Expand Across Value Chain: Extend across the value chain to capture control points, reduce technology adoption barriers, simplify, and optimize the company’s customer offering, and accelerate fuel cell deployments. Develop New Routes To Market: Creatively explore partnerships and demonstration programs to accelerate hydrogen and fuel cell market adoption and grow volume for product sales. Win in Key Regions: Build a competitive platform in each of North America, Europe and China. Here for Life: Deliver a compelling environmental, social and governance (‘ESG’ proposition for the company’s stakeholders). Market Segments The company reports its results in the single operating segment of Fuel Cell Products and Services. The company’s Fuel Cell Products and Services segment consists of the sale and service of PEM fuel cell products for the company’s power product markets of Heavy-Duty Motive (consisting of bus, truck, rail and marine applications), Material Handling and Stationary Power Generation, as well as the delivery of Technology Solutions, including engineering services, technology transfer and the license and sale of the company’s extensive intellectual property portfolio and fundamental knowledge for a variety of fuel cell applications. The results of BMS are included in the company’s Technology Solutions and Heavy Duty Motive markets. For 2023, the company anticipates reclassifying the results of the company’s Fuel Cell Products and Services operating segment into certain power product market applications, as well as the delivery of services. Markets, Products and Services Product and Service Ballard’s product offering provides for a flexible set of fuel cell power solutions. Ballard provides products in five distinct product classes: MEAs: The company provides its proprietary MEAs to the Synergy-Ballard JV and the Weichai-Ballard JV that use the MEAs to produce the company’s proprietary FCveloCity-9SSL fuel cell stacks and FCgen-LCS fuel cell stacks, respectively. Fuel Cell Stacks: The company provides its proprietary FCgen and FCveloCity fuel cell stacks to OEM customers and system integrators that use the stacks to produce fuel cell systems for power solutions. As the fuel cell stack provider, the company are the power inside the system. Fuel Cell Modules: The company designs and builds, including specifying and procuring balance of plant components, self-contained FCveloCity and FCmove motive modules using the company’s fuel cell stacks that are plug-and-play into commercial vehicle powertrains. The company also designs and builds self-contained FCwave modules designed for marine applications and FCrail for rail applications. As a fuel cell module provider, the company makes it easier for OEMs and system integrators to create fuel cell powertrains. Fuel Cell Systems: The company also builds complete fuel cell systems, FCgen-H2PM and Cleargen products, for stationary power markets that are designed to solve certain power needs of the company’s customers, including back-up for critical infrastructure and MW distributed power generation. Energy System and Powertrain Integration: The company provides complete energy system (fuel cell + battery + controller + high and low voltage distribution), powertrain design and integration services, and vehicle integration services, to support the company’s customer fuel cell vehicle development programs. Technology Solutions: The company offers engineering services to its customers for special fuel cell product development. After Sales Services: The company offers its customers after sales services, including in and out of warranty support, service contracts, spare part management, fleet monitoring and training. The following lists the key fuel cell and non-fuel cell products the company produces, offers for sale, has under development, or is testing: Motive Power Product Family FCgen-LCS MEA: Includes fuel cell stacks for buses, commercial vehicles, light rail, and material handling. Sales to licensee (Weichai-Ballard JV). FCveloCity-9SSL MEA: Includes fuel cell stacks for buses, commercial vehicles, light rail, and material handling. Sales to licensee (Synergy-Ballard JV). FCgen-HPS Stacks: Includes fuel light-duty and heavy-duty commercial vehicles and passenger car. Sales to OEMs and system integrators. FCgen-LCS Stacks: Includes buses, commercial vehicles, light rail, and material handling. Sales to OEMs and system integrators. FCveloCity-9SSL Stacks: Includes buses, commercial vehicles, light rail, and material handling. Sales to OEMs and system integrators. FCgen-1020ACS Stacks: Includes material handling and backup power. Sales to OEMs and system integrators. FCveloCity Modules: Includes buses, commercial vehicles, and light rail. Sales to OEMs and system integrators. FCmove Modules: Includes buses, commercial vehicles, and light rail (legacy product range). Sales to OEMs and system integrators. FCwave Modules: Includes marine, rail (freight locomotives) and stationary. Sales to OEMs and system integrators. FCrail: Includes passenger rail application. Sales to OEMs and system integrators. Energy System Controller and Powertrain Integration Services: Includes energy system for bus and truck. Sales to demonstration projects in the U.K. and engineering services globally. Stationary Power Product Family FCgen-1020ACS: Includes backup power. Sales to OEMs and system integrators. FCgen-H2PM: Includes backup power systems. Sales to customers. ClearGen: Includes distributed generation systems. Sales to customers and Integrators. FCgen-200: Includes power generation. Sales to customers. Fuel Cell Products and Services Power Products Markets Heavy-Duty Motive The company provides fuel cell modules for public transit systems, including buses and light rail, and for commercial trucks. Fuel cell electric vehicles in these applications rely on centralized fueling depots that simplify the hydrogen infrastructure requirements and are typically government-subsidized, thus enabling the purchase of pre-commercial fleets. The company designs and manufactures the fuel cell module products capable of delivering 50 kW to 200 kW of power for use in the Heavy-Duty Motive market. The company supplies the fuel cell modules to hybrid drive, bus, truck, light rail and marine propulsion system OEMs and integrators that deliver zero-emission fuel cell-powered vehicles to fleet operators. The demand for zero-emission vehicles is driven in many jurisdictions by the requirement to reduce greenhouse gases and other harmful emissions. The FCveloCity power module platform, which was initially launched in 2015, is available in various configurations ranging in power from 50 kW to 100 kW to address different levels of battery/fuel cell hybridization and a variety of applications. In 2022, sales of the FCveloCity-HD module were limited to some of the company’s existing customers mainly for fuel cell electric bus applications. In 2019, the company launched its eighth-generation high-performance fuel cell module, the FCmove-HD. The FCmove family of products is designed to power medium- and heavy-duty commercial vehicles, such as buses and trucks. The FCmove-HD 70kW version is being delivered to customers in China and Europe and has been integrated in vehicles. The FCmove-HD+ 100kW version was launched in 2021 and the company is starting delivery of the first modules to customers for integration into their new vehicle platforms. The company presented at IAA Show in September 2022 the concept unit for FCmoveTM-XD (120/240kW) product, which is being developed for heavy duty trucks (>19t and class 6-8). In 2020, the company introduced the FCwave, a fuel cell module designed for certain marine applications. The FCwave fuel cell module is a 200 kW modular unit that can be scaled in series up to the multi-megawatt (MW) power level. The FCwave product provides primary propulsion power for marine vessels – such as passenger and car ferries, river push boats, and fishing boats – as well as stationary electrical power to support hotel and auxiliary loads on cruise ships and other vessels while docked at port (also known as ‘cold ironing’). In 2021, the company also started to sell FCwave products for stationary and rail applications. Supported by Technology Solution program, the company has developed for Siemens Mobility the 200kW FCrail product, which has been integrated in the new Mireo Plus H2 regional passenger train. By the end of 2022, fuel cell electric vehicles in commercial heavy-duty and medium-duty motive applications powered by Ballard technology surpassed an estimated total of 150 million kilometers. Material Handling The company’s initial focus is on battery-powered Class 1 counterbalance lift trucks, Class 2 reach trucks and Class 3 pallet forklifts. The company’s products for the material handling market are the FCveloCity-9SSL stack, which is applicable to Class 1, Class 2 and Class 3 forklift truck solutions; the FCveloCity-1020ACS stack for Class 3 material handling applications; and the FCgen-LCS stack which is expected to be applicable to Class 1, Class 2 and Class 3 forklift truck solutions. Ballard is supplying fuel cell stacks to a limited number of system integrators in North America and Europe. Competition Plug Power’s own fuel cell stacks compete with the company’s fuel cell stacks for supply in Plug Power’s business. Stationary Power Generation PEM fuel cell systems have market opportunities for zero emission power generation applications requiring intermittent power generation with fast response, such as backup power of critical infrastructure, peak shaving, hybrid renewable off-grid sites and electric charging applications, such as shore power. The backup power market includes stationary applications for telecommunications equipment and other critical infrastructure, such as data centers. The company also sells fuel cell stacks to certain companies developing PEM fuel cell-based backup power systems and other stationary power systems. The company supplies the backup power market through the sale of the company’s hydrogen backup power product, the FCgen-H2PM, manufactured by Ballard Denmark. The company provides fuel cell systems to backup critical communication infrastructure with a focus on fibre optics network backbones, critical hub sites and emergency communication networks (police, fire, ambulance and other emergency response services) in Europe with the company’s FCgen-H2PM product. Several Scandinavian countries have passed regulations to impose extended backup time (typically more than 12 hours) for critical infrastructure. Fuel cell technology provides an alternative power solution to ensure site power availability during unexpected and extended power outages to harden critical infrastructure, including data centres. The company also intends to provide fuel cell power generation solutions from 200kW to multiple MW using the company’s FCwave and ClearGen platforms. The company recently announced a demonstration program for backup generation for data centers with Caterpillar Inc. at a Microsoft data center in the U.S., as well as distributed power generation project with HDF Energy. Technology Solutions This business platform was established in 2011 to leverage the company’s expertise in fuel cell design, prototyping, manufacturing and servicing. The mandate of the Technology Solutions business platform is to help customers solve difficult technical and business challenges in their PEM fuel cell programs or address new business opportunities. The company offers customized, bundled technology solutions, including specialized PEM fuel cell engineering services, access to the company’s intellectual property portfolio and know-how, as well as the supply of technology components. The company’s Technology Solutions efforts are predominantly in the support of automotive and heavy-duty motive research and product development programs. In 2022, the company also executed on programs in rail, marine and stationary. In 2018, the company signed a 3.5-year extension to the then-current Technology Development Agreement with AUDI, part of the Volkswagen Group. In 2020, the company amended the Technology Development Agreement with AUDI relating to certain program reductions through 2022. This program has now been completed. In 2022, the company continued to execute on the development of a 200 kW fuel cell engine zero-emission fuel cell engine to power Siemens’ Mireo light rail train pursuant to the Development Agreement entered into with Siemens in 2017. The company also continued the execution of the Research and Development Agreement to develop and transfer technology to the Weichai-Ballard JV in order to enable manufacturing of Ballard’s FCgen-LCS fuel cell stack and FCgen-LCS-based power modules for bus, commercial truck and forklift applications with exclusive rights in China. Competition The company’s main competition in the automotive sector for engineering services is the automakers’ ‘in-house’ capabilities, specialized automotive engineering companies, or fuel cell development companies, like AVL List, FEV Group GmbH, Intelligent Energy, Bosch, and Ricardo offer competing fuel cell development programs. Intellectual Property As of March 16, 2023, Ballard owned or controlled 38 United States granted patents; 104 non-United States granted patents; 4 United States published patent applications; and 23 published non-United States patent applications. The company’s patents will expire between April 2023 and September 2040. The company holds licence rights to additional intellectual property from a number of third parties. The company has a royalty-free license to approximately 1,000 issued patents and pending patent applications from AUDI for bus and non-automotive applications and a royalty-bearing license for all other applications. In addition, these licences include non-exclusive, royalty-free access to all of the intellectual property rights held by NuCellSys GmbH, a Daimler subsidiary, and to all of the intellectual property rights relating to fuel cells developed by Daimler, Ford and their subsidiaries (either directly or through AFCC), including any intellectual property rights developed by them to January 31, 2013. As of March 16, 2023, approximately 90 of the patents and patent applications that were included in these licenses, are granted or pending. Cybersecurity Ballard implements and maintains a cybersecurity framework to manage cyber risk, control, and compliance-based activities. This framework is based on the International Organization for Standardization (ISO) and International Electrotechnical Commission (IEC) 27001 standard. History The company was founded in 1979. It was incorporated in 1989 under the Canada Business Corporations Act (Canada) under the name 7076991 Canada Inc. The company changed its name to Ballard Power Systems Inc. in 2008.
