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Our fuel cell index kept pace with the broad S&P 500 index this year.   With no significant new entrants the same seven companies passed all our screens and remain in index and the index was rebalanced January 1, 2008.   We exclude Hoku Scientific due to their rapidly declining fuel cell business (six months revenue ending 9/30/07 was off 57% according to their Nov 07 10-Q), their hydrogen based technology, and their continued push into the polysilicon supply business.  

Companies using hydrogen as a fuel source continue their decline in market cap share.  We discussed this trend with Haitham Haddadin of Reuters on August 31, 2007 and Bob Keefe of Cox News on September 9, 2007 and we see no abatement as shown below: 

Energy Source Companies % of Index Market-cap
Hydrogen 3 41%
Non-hydrogen 4 59%

Source:  Camino Energy

What is the future of the fuel cell segement?  With Ballard’s exit from the auto market  it doesn’t appear to be the major transportation market.  In our view the longer term promise lies with companies using readily available fuels, such as natural gas, but the promise requires significant cost reductions and improvements in reliability.  If these happen, fuel cell’s inherent efficiencies, quiet operation, low emissions, and potential for heat recapture will help the technology find broader markets.

This entry was posted by Mark Henwood on January 12, 2008 at 2:00 pm under Analysis, Indices. Both comments and pings are currently closed.