Burnaby company inks $17-million deal to power 300 transit buses in China
Burnaby-based hydrogen-fuelcell maker Ballard Power Systems has made a $17-million deal to supply engines for 300 transit buses in China, the company said Friday.
It is the company’s biggest single sale in the heavy-duty transportation sector, Ballard CEO Randy MacEwen said. The bus business, particularly in China, is a market showing signs it might offer the scale Ballard has been looking for to get to profitability, he added.
“We’re talking about a commercial deployment,” MacEwen said. “These are being sold with gross margin, so this is an important step on our journey to get to profitability.”
The deal comes during what has been a rocky year for Ballard, which, in the second quarter of 2015, reported a 39-percent drop in revenue to $11.2 million US and a widening loss — $7.3 million compared with $4.5 million in the same period a year ago.
Ballard signed the agreement Friday in a ceremony at its Burnaby headquarters, which will see the revenue accrue to the company starting in 2016. The buses, working through a partnership with Chinese firms, will be manufactured to hit the road in the cities of Foshan and Yunfu in the southern Guangdong province.
However, MacEwen said China’s commitment to more environmentally friendly transportation is the more hopeful sign.
Some 48 cities in China have signed on to a program aimed at putting 1,000 electric or fuel-cell buses on the roads of each one, a program which offers $150,000 US in subsidies for the purchase of vehicles.
The subsidy is set to run through 2017, Bloomberg News reported earlier this year.
MacEwen said costs in the hydrogen-fuel-cell sector have been coming down, performance of equipment has increased and potential customers are seeing a “value proposition” in clean air.
“One of the things we’ve been saying is (that) we need to get to scale in our business,” MacEwen said, “This is now an indication that, in what we call our heavyduty motive, or bus business, we’re now starting to see signs of scale.”
In the meantime, Ballard raised $13.6 million US in July through a new offering of 9.3 million shares in the company, with net proceeds going to bolster its working capital and provide revenue for general corporate purposes including acquisitions.
This is now an indication that, in what we call our heavy-duty motive, or bus business, we’re now starting to see signs of scale.
RANDY MacEWEN
BALLARD POWER SYSTEMS CEO