Ballard Power (BLDP) Stock Climbs On News Of Federal Tax Credit Award

Ballard Power Systems Inc. (NASDAQ: BLDP) is witnessing a notable surge in its stock valuation today, experiencing a commendable ascent of 15.11% to reach $3.20 during the latest assessment in the pre-market session. This upswing in BLDP shares follows the unveiling of additional federal funding allocated towards a significant undertaking.

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An investment tax credit of $54 million was awarded to Ballard Power (BLDP) through the Qualifying Advanced Energy Project Tax Credit (48C) program administered by the U.S. Internal Revenue Service. Under the 48C program, funded by the Inflation Reduction Act (IRA), certain clean energy manufacturing projects are eligible for a 30% investment tax credit. As a result, the domestic clean energy supply chain will be more stable and secure.

Intending to bolster its operations, Ballard intends to deploy the $54 million tax credit towards the establishment of a new fuel cell Gigafactory situated in Rockwall, Texas. This substantial financial backing, coupled with a prior allocation of $40 million in U.S. Department of Energy grants, constitutes a combined federal funding of $94 million designated to fortify the development of the Rockwall Gigafactory.

Scheduled for construction on a 22-acre plot within the Rockwall Technology Park, the Ballard Rockwall Giga 1 project represents a strategic endeavor. In its initial phase, slated from 2024 through 2027, Ballard envisages investing approximately $110 million to erect and operationalize a state-of-the-art manufacturing facility geared towards producing membrane electrode assemblies (MEAs), bipolar plates, stacks, and engines.

This advanced manufacturing infrastructure forms a pivotal component of Ballard Power’s ‘local for local’ global manufacturing strategy, poised to facilitate future expansion while delivering favorable financial returns on invested capital. Anticipated outcomes from Phase I investments include an annual production capacity of 8 million MEAs, 8 million bipolar plates, 20,000 fuel cell stacks, and 20,000 fuel cell engines, equivalent to 3 gigawatts of fuel cells.

Ballard Power is committed to manufacturing next-generation fuel cell products, incorporating technological advancements, supply chain synergies, and the implementation of streamlined production processes and advanced automation to mitigate costs. A final investment decision concerning the facility is expected later in 2024, subject to customary conditions such as regulatory approvals and conclusive documentation.

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