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Ballard Power stock leaps more than 17% on biggest-ever fuel cell order, new US$54M tax credit

A hydrogen fuel cell buses stands at the station
A hydrogen fuel cell buses stands at the station (Scharfsinn86 via Getty Images)

Shares of Ballard Power Systems (BLDP.TO)(BLDP) climbed more than 17 per cent in early trading on Monday as the Canadian hydrogen fuel cell maker announced a supply deal with a European bus manufacturer, and a US$54 million tax credit under the United States' Inflation Reduction Act (IRA).

Last month, Ballard’s stock sank to a 52-week low after the Vancouver-based company’s fourth-quarter financial results revealed a shrinking 12-month order book. On Monday, Ballard said it signed its largest order in company history, for fuel cells with Poland’s Solaris Bus & Coach.

Financial terms were not disclosed.

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Ballard separately announced a US$54 million investment tax credit from the U.S. Internal Revenue Service. Funded under the IRA, Ballard says it will use the 30 per cent tax break to support construction of a new fuel cell Gigafactory in Rockwall, Texas.

"Ballard sits at the convergence of the megatrends of decarbonization, energy security, and technology change, with highly disruptive and proven zero-emission fuel cell products," president and CEO Randy MacEwen stated in a news release on Monday.

He says the US$54 million in new U.S. tax credits is in addition to US$40 million in previously announced grants from the US. Department of Energy, bringing Ballard’s total U.S. federal funding to US$94 million.

Ballard says it expects to make a final investment decision on the Texas facility later in 2024.

"We are encouraged with the increasingly constructive policy landscape, including the recent unveiling of the U.S. National Blueprint for Transportation Decarbonization, and the National Zero-Emission Freight Corridor Strategy,” MacEwen added on Monday.

The company’s growing focus on the United States is in contrast to its increasingly cautious approach to expansion in China. Ballard has delayed investments in the world's second-largest economy amid geopolitical tension between China and Western nations.

Ballard builds hydrogen fuel cells for buses, commercial trucks, trains, marine vessels, and stationary power. Its partners include Canadian Pacific Kansas City (CP.TO)(CP) rail, Ford's (F) heavy truck division, and Winnipeg-based bus maker NFI Group (NFI.TO).

Toronto-listed Ballard shares had gained more than 15 per cent to $4.36 per share at 11:09 a.m. ET. The stock has fallen more than 46 per cent over the last 12 months.

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.

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