Ballard Selling E-Drive Operations to Siemens VDO

21 December 2006
 Ballard’s 100 kW integrated electric drive system.

Ballard Power Systems is selling its electric drive (E-Drive) operations—based in Dearborn, Michigan—to Siemens VDO Automotive Corporation for approximately $4 million. Ballard E-Drive systems range in power ratings from 17 kW to 250 kW, covering a wide array of possible applications. Ballard provided electric drive systems for Ballard fuel cell-powered prototypes, including DaimlerChrysler’s Necar 4, Necar 4A, and Necar 5, as well as Ford Motor Company’s P2000, TH!NK FC5 and TH!NK FCV. Ballard supplied electric drives to Ford for use in the battery-powered Ford Ranger pickup trucks, introduced in 1998, as well as Ford’s battery-powered TH!NK city electric vehicle. Ballard has also provided electric drive systems for the latest generation of Ballard fuel cell demonstration transit buses, including electric drive systems for 30 buses being built for the European Fuel Cell Bus Project. As a result of the transaction, Ballard expects to incur a non-cash write-down of goodwill in the fourth quarter of 2006 of approximately US$105 million. With the sale, Ballard will reduce operating cash consumption by approximately US$10 million per year. The transaction is expected to close in January 2007, subject to certain closing conditions. Siemens VDO is pushing hard on developing hybrid and electric drive systems, including a full family of hybrid drives (earlier post) and in-wheel motor systems (earlier post). The hybrid development team at Siemens VDO recently built a full hybrid vehicle as a demonstration of its Hybrid Tool Box—a portfolio of hybrid components including high- and low-voltage motor inverters, electric motors and vehicle control algorithms and integration capabilities. (Earlier post.) Ballard indicated in October that it was evaluating strategic options with respect to these operations, including divesting or restructuring to improve financial performance. The electric drive operations are not core to Ballard’s fuel cell stack strategy. Resources: Comments "to Siemens VDO Automotive Corporation for approximately$4 million."

Sad what happens to technology companies when the world turns from future to war.

SJC:

Huh? How do you make that leap?

$4 million is a small amount and Ballard has been struggling since about 2001 to find customers. Ballard is a company that made great advances in PEM. It is just my view that technology usually takes a back seat when priorities are on war. SJC: I believe its pretty safe to say that war in general drives technology forward. Check the history books on that one. However, in the case of fuel cells, they are moving ahead only slowly because there is no market for them. As for the electric drive business in Dearborn, SVDO is a much better home for it than Ballard ever was or will be. The only thing close to a mass market for automotive high power electronics (Dearborn's expertise) is the hybrid EV market, and Siemens has a keen interest in it. Ballard in Vancouver unfortunately has no interest and no capability to be in the hybrid EV market. I will grant you that$4M is a relatively small amount, but Ballard deserves only what it can get on the open market and, unfortunately for Ballard stockholders and employees, Ballard execs don't seem to be able to sell or negotiate very well. I'm sure their tax benefits will be substantial, though.

Cheers.

It is a common conception that war is good for an economy. I do not happen to believe that. What technology that does continue is targeted at war and not the future. Any spin off technology from a war effort would have been better researched and developed for the intended purpose of advancement and not just something that can also be used in peacetime. I would agree that Ballard's managers may have not made all the right moves. But they did great things in the 90s and after 2001, it was hard to find anyone believing enough in the future to continue.

What Ballard in Vancouver did in the 90's is comparable to what snake oil salesmen used to do. They were quite successful in separating investors from their money. The fuel cell millionaires are comparable to many of the dot com millionaires - laughing all the way to the bank.

Hybrids, battery electrics, and advanced diesels make sense for transportation. Hydrogen powered prime movers - fuel cells or internal combustion engines - don't. Do the energy analysis. Unless we can find some naturally occuring hydrogen-producing process, or one we can get to happen naturally and at low cost and low energy input, forget the hydrogen economy because it won't happen.

Ballard's standard answer when asked the question about a source of hydrogen is "that's not our problem." That answer may be technically correct but is very short sighted. I think the public has caught on, which is why Ballard stock is in the $6 range, rather than the$140 range it peaked at.

Not to dwell on the war comments, but certain things are facts whether one chooses to believe in them or not. By the way, you changed gears by jumping from technology to economy, which aren't necessarily interchangeable.

It would be interesting to see if "war" for technology purposes, could include "War on Poverty," or "War on GHG." Perhaps a big defense contractor would have to make similar technology advances regardless of the "enemy." We would like to think that the alt fuel economy could provide a transition from aggression-based R&D, to quality of life-based R&D. The movement to big-picture solar for the planet should provide technology opportunities that far outstrip those demanded by aggression.

Sounds like wide-eyed idealism, eh?

Ballard never achieved any significant advances in PEM fuel cell technology. Initially, enthusiastic team led by Ballard pioneered ingenious and effective packaging and auxiliary’s of commercially available Du Pont membranes. Soon afterward initial success the company was high jacked by incompetent and soft-fingered management team with medieval tribal psychology. Ballard and all core scientists and engineers were forced out. Undeserved and unexplainable support of Ford and DB transformed this unknown company without somehow important IP and expertise into flagship of fuel cell folly, effectively making them leader in pump-and-dump stock manipulation industry. In informed engineering circles current Ballard Technologies Inc. is synonymous with IP stealing, patent infringement, unethical treatment of employees, shareholders disinformation, misleading PR, and etc., etc., etc.

Just for your information.

i am impressed all that money spent on developing a electric car and yet we get only 150 to 250 miles then stop and charge. two men in there back yard with about 8000.00 dollards tring to save money on power bills and gas came up with a way to charge batteries in a car with out stopping anywhere. plus a power unit for there house. that they would like to sell now.

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