Plug Power’s stock surged 7.1% on Monday morning, reaching new heights simply on the growing enthusiasm surrounding hydrogen power. This spike in interest follows recent announcements from BMW, which revealed its plans to manufacture hydrogen fuel cell vehicles with support from Toyota. As Plug Power is positioned as a leader in liquid hydrogen production for the automotive sector, investors are keenly interested in the stock’s performance.
However, while the partnership between BMW and Toyota is exciting news, it’s essential to note that some of this information isn’t completely new. Reports about this collaboration surfaced a couple of weeks ago. Nevertheless, fresh information has emerged, such as the anticipated launch date for BMW’s new fuel cell electric vehicle (FCEV), slated for 2028. Toyota will be providing BMW with its advanced hydrogen fuel cell technology for this ambitious project.
BMW’s commitment to incorporating hydrogen technology is evident, particularly with its innovative vehicle architecture designed to fit hydrogen tanks—essentially a nod of confidence for liquid hydrogen advocates like Plug Power. Yet, it’s crucial to approach this news with caution. The long lead time, with 2028 as the target for vehicle availability, means that Plug Power won’t see any immediate revenues from hydrogen sales to BMW’s future customers for several years.
Given Plug Power’s financial situation, there are concerns regarding its sustainability in this wait. The company currently holds $62 million in cash while carrying $916 million in debt, burning through approximately $1.5 billion annually. This financial strain raises questions about whether Plug Power will still be operational by the time BMW FCEV owners start purchasing hydrogen fuel.
For potential investors considering whether to inject $1,000 into Plug Power, it’s crucial to weigh the investment against the backdrop of other stocks. Notably, the analysts at The Motley Fool have identified ten standout stocks that are currently positioned for growth, and Plug Power is not among them. The selected stocks offer promising returns that could significantly outperform the S&P 500, reminiscent of when NVIDIA’s stocks soared after a recommendation years ago.
In summary, while the collaboration between BMW and Toyota sounds promising and has fueled a short-term rise in Plug Power’s stock, the investment landscape is complex. From financing hurdles to long timelines for revenue generation, potential investors need to carefully evaluate their options. Always consider comprehensive market advice and stay informed on emerging trends when making investment decisions in the dynamic sector of renewable energy.