Canadian cleantech firm will form joint venture to build fuel cell stacks for transit buses at new production line in Yunfu, China
VANCOUVER—Shares of Burnaby, B.C.-based fuel cell maker Ballard Power Systems Inc. are flying high after the company announced a major joint venture agreement with customer and sometimes-partner Guangdong Nation Synergy Hydrogen Power Technology Co.
The Canadian cleantech firm and the Chinese manufacturer have agreed to partner to build a fuel cell stack manufacturing plant in the southern Chinese city of Yunfu—not far from Hong Kong. The facility will produce Ballard’s FCvelocity-9SSL fuel cell stacks, which will then be incorporated into transit bus engines that run on hydrogen. Under the agreement, Ballard will own 10 per cent of the joint venture, while Synergy will hold a 90 per cent stake.
“There is unprecedented market interest for fuel cell buses and commercial vehicles in China—the largest market in the world,” Randy MacEwen, Ballard’s president and CEO, said. “With our leading brand, technology and field experience, Ballard is uniquely positioned to address the market for fuel cell buses and commercial vehicles with our partners in China.”
The company anticipates the deal to be worth a minimum of $168 million over five years, including an $18.4 million technology transfer payment. The agreement also stipulates Ballard be the elusive supplier of membrane electrode assemblies for each fuel stack, which the company expects to be worth at least $150 million over the initial five-year term. Ballard will contribute approximately $3 million for its 10 per cent stake in the JV.
Synergy’s chairman Frank Ma said the “transformational” deal will position the companies to offer clean energy buses to bustling Chinese cities where air quality has become a top priority.
“By localizing stack and module production, we will drive costs down to enable sustainable market demand for fuel cell buses and commercial vehicles based on economics, zero emissions and passenger experience,” he said.
Cheering the “landmark” agreement, investors sent Ballard shares soaring July 18. After opening at $1.80, shares posted a more than 40 per cent gain, closing at $2.59.
The companies plan to finalize the deal this year, and launch production at the new assembly line in 2017.