An agreement for the manufacturing, assembly and sales of Ballard Power Systems’ FCveloCity 30 kW and 85 kW fuel cell engines in China has closed. Ballard signed the agreement with Zhongshan Broad-Ocean Motor Co., Ltd. in February.
"This transaction is an exciting step forward in our response to the converging macro trends in China, including large-scale urbanization, continued build-out of mass urban transportation, degrading air quality and a mandate to address climate change,” said Randy MacEwen, president and CEO at Ballard. “Our strategic partnership with Broad-Ocean is a central piece in our China strategy, premised on the establishment of a comprehensive local fuel cell supply chain and related ecosystem to address the fast-growing clean energy bus and commercial vehicle markets."
Under the deal, Broad-Ocean will manufacture fuel cell modules in three strategic regions in China, including Shanghai. The deal has an estimated value of approximately $25 million in revenue to Ballard over the initial 5-year term, including $12 million in Technology Solutions revenue. As of closing, Ballard received initial payments totaling $3.6 million.
In each of the three operations, Broad-Ocean plans to engage with local governments as well as with bus and commercial vehicle OEMs for deployment of fuel cell buses and commercial vehicles incorporating Ballard-designed modules manufactured by Broad-Ocean.
Broad-Ocean will make further payments to Ballard based on certain commissioning milestones, initial supply agreements, and recurring royalties. Ballard will also have the exclusive right to purchase fuel cell engines from any of the Broad-Ocean manufacturing operations for sale outside China.
Each fuel cell engine assembled by Broad-Ocean will utilize FCvelocity-9SSL fuel cell stacks, initially manufactured by Ballard at its Vancouver facility. Stack supply will be transferred to Guangdong Synergy Ballard Hydrogen Power Co., Ltd. (JVCo) once JVCo becomes fully operational, expected in late-2017. JVCo is a joint venture owned by Guangdong Nation Synergy Hydrogen Power Technology Co. Ltd. (Synergy) and Ballard in the City of Yunfu in China's Guangdong Province.
From that time forward, Ballard will supply membrane electrode assemblies (MEAs) on an exclusive basis for stacks manufactured by JVCo.
Broad-Ocean became Ballard’s largest shareholder following an August 18, 2021 investment of $28.3 million which gave Broad-Ocean nearly 10% Ballard’s outstanding common shares.