Ballard signs long-term fuel cell engineering services contract with Volkswagen AG; expected value of C$60-100 million
Ballard Power Systems has signed an agreement with Volkswagen Group for a major Engineering Services contract to advance development of fuel cells for use in powering demonstration cars in Volkswagen’s fuel cell automotive research program. The contract term is for 4-years, with an option for a 2-year extension. The expected contract value is in the range of C$60-100 million.
Work will involve the design and manufacture of a next-generation fuel cell for use in Volkswagen HyMotion demonstration cars. Ballard engineers will lead critical areas of fuel cell product design—including the membrane electrode assembly (MEA), plate and stack components—along with testing and integration work.
This research agreement with Ballard demonstrates our commitment to the development of clean energy fuel cell transportation alternatives. I anticipate accelerating our automotive fuel cell program as a result of this collaborative effort, which will bring together additional fuel cell skills and expertise in both organizations.—Dr. Juergen Leohold, Head of Group Research at Volkswagen AG
Over the past several years, Ballard has made significant advances in its commercial fuel cell products, with average product cost reductions of 60% and increases in product durability. Sales of Ballard’s clean energy fuel cell products have also been accelerating, with a 30% cumulative annual growth rate (CAGR) in revenue since 2010.
The announcement of this research agreement with Volkswagen Group, a recognized global leader, is a major step for Ballard both strategically and financially. It represents a tremendous ramp-up in our Engineering Services business following the recent expiration of the five year automotive non-compete agreement.
Ballard’s focus with Volkswagen in this new automotive fuel cell research program will parallel our continuing work in commercial fuel cell markets for backup power and material handling—enhancing product durability and performance while radically reducing product costs.—John Sheridan, Ballard President and CEO
Additional details regarding the agreement between Ballard and Volkswagen will be filed by Ballard in a Material Change Report which will be available on SEDAR.
Ballard was founded in 1979 to conduct research and development on high-energy lithium batteries. In the course of investigating environmentally clean energy systems with commercial potential, it began developing fuel cells in 1983. Over time, Ballard entered into a number of strategic alliances related to fuel cell R&D, including an alliance with Daimler AG and Ford Motor Company.
In 2007, Ballard sold the company’s automotive fuel cell assets to Daimler and Ford as part of a major corporate transformation from 2007 to 2009. (Earlier post.) The company shifted its strategic focus from long-term, high cost automotive fuel cell R&D technology development to fuel cell products for near-term commercial markets: backup power, distributed generation, material handling and bus applications.