In the fast lane
Following the correction of shares in the hydrogen and fuel cell technology sector, with market leaders such as Plug Power and Nel ASA losing almost 80% of their value this year, the market capitalization of the newcomer is currently CAD 77.97 million. It is truly incredible when you closely examine the Company's successes over the past twelve months. Launched at the beginning of 2021 with the vision of becoming the leading designer and manufacturer of zero-emission, long-range hydrogen-powered vehicles in the UK, the EU and North America, the Company has already taken a significant step towards achieving this goal.
First Hydrogen, led by experienced manager Balraj Mann, continues to focus on its "best-of strategy", which integrates existing technologies and a proven chassis. This is flanked by cooperation with world market leaders such as Ballard Power and AVL Powertrain. After the first two prototypes were developed, test drives under real road conditions were started during the course of the current year with 2 of a total of 16 large fleet operators from sectors such as food, delivery services, healthcare and utilities who participated in the UK "Aggregated Hydrogen Freight Consortium".
First Hydrogen's commercial vehicles powered by hydrogen fuel cells performed far better than predicted, clearly outperforming battery electric vehicles and vans with combustion engines. The prototype achieved a record range of 630 km on a single refuelling. By comparison, comparable light commercial vehicles with an electric drive only manage 240 km. Further top values were also achieved in the extremely low average consumption of 1.58 kg of hydrogen per 100 km, even at consistently high speeds. Another plus point compared to the peer group is the fact that the "Fuel Cell Vehicle" was able to keep its battery fully charged at all times thanks to the energy recovered during braking. This shows that the number of kilowatt hours charged and consumed was almost the same, which underlines the high efficiency of First Hydrogen's energy management system.
Expansion to North America
With the extremely positive tests in the UK, First Hydrogen is planning to expand into North America to replicate its successful strategy. The Canadians intend to develop two additional prototypes to be presented to potential North American fleet operators. In line with this, the successfully launched test program in the United Kingdom with large fleet operators is to be continued.
The hydrogen innovator is receiving support from politicians. With the country on track to meet its national target of selling 100% zero-emission vehicles by 2035, Canada's Department of Environment and Climate Change announced the introduction of a new electric vehicle availability standard aimed at increasing the supply of clean, zero-emission vehicles. In addition to battery electric vehicles and plug-in hybrid electric vehicles, this program also includes the Vancouver and London-based company's hydrogen-powered fuel cell vehicles.
Closed value chain
In addition to the development of the prototypes, First Hydrogen is also continuing to work on covering the entire hydrogen value chain in order to offer its customers a 360-degree package with the "Hydrogen-as-a-Service" model. For example, a vehicle assembly plant is to be built in Shawinigan, Quebec, which will produce up to 25,000 vehicles per year for distribution throughout North America. In addition, a 35 MW plant for the production of green hydrogen is to be built at the same location. The facility will utilise advanced electrolysis to power the Company's hydrogen fuel cell vehicles and other hydrogen-powered vehicles and applications in the Montreal-Quebec City region.
Upside potential available
Despite the milestones achieved in the past financial year, First Hydrogen's shares were unable to escape the weak stock market environment in the hydrogen sector and have fallen by around 68% since the beginning of the year. Since mid-October, however, there have been clear signs that the share price has bottomed out. With the development of a double bottom at CAD 1.46, the share was able to break away from its annual lows and break through the downward trend established since January 2023. A possible rebound is receiving a tailwind from the indicators. Both the MACD and the Relative Strength Index (RSI) no longer confirmed the October lows and formed positive divergences, which can be seen as a bullish sign. The next price target is the vertical resistance at CAD 2.24 if the aforementioned downtrend continues.
Interim conclusion
In recent months, First Hydrogen has clearly demonstrated the advantages of its hydrogen fuel cell-powered light commercial vehicles with test drives under real road conditions and has already won over two major fleet operators. In addition to record ranges of 630 km on a single tank of fuel and much shorter waiting times when refuelling, the utility vans are miles ahead of battery-powered commercial vehicles. With the expansion into Canada and the development of two further prototypes, First Hydrogen is pursuing a tough expansion strategy supported by politicians. The Canadians are also gaining imagination by covering the entire hydrogen value chain with the construction of a vehicle assembly plant and a production facility for green hydrogen in Shawinigan, Quebec.
The update is based on the initial report 07/2022
