FuelCell – Ballard Power Systems (NASDAQ:BLDP): Global Fuel Cell Operations and Patent Portfolio for Investment Performance
February 1, 2021
Tony Guglielmin joined Ballard Power Systems as Senior Vice President and Chief Financial Officer in June 2010.
Mr. Guglielmin previously was Senior Vice President, Finance and Chief Financial Officer of Canada Line Rapid Transit Inc. (CLCO), a $2 billion rapid transit project connecting the Vancouver International Airport, City of Richmond and downtown Vancouver.
Earlier, Mr. Guglielmin held senior management roles in treasury, investor relations, corporate development and strategic planning at Finning International Inc. in Vancouver. He was Corporate Treasurer of British Columbia Hydro and he held various management positions with The Bank of Nova Scotia in Toronto.
Mr. Guglielmin received a B.A. in economics and political science and an M(BA) from McGill University. He also holds the Chartered Financial Analyst designation and belongs to a number of professional organizations including the Financial Executives Institute.
He is on the Board of Information Services Corporation (where he also serves as Chair of the Audit Committee), as well as a number of private companies.
In this 6,488 word interview, exclusively in the Wall Street Transcript, Tony Guglielmin details his company’s strategy for investors:
“We’ve been public for over 27 years, traded on the Nasdaq and Toronto Stock exchanges. Our core business is the design and manufacturing of fuel cell stacks and engines for a number of end-market applications.
Our current focus is particularly on medium- and heavy-duty transportation. But we also provide fuel cell engines and systems into other markets, like the backup power market and distributed generation, as examples.
The company has been around for over 40 years. It was a private company, started up here locally in the Vancouver, British Columbia, Canada, area by its original founders. And today, we are approaching 1,000 employees.
Our global headquarters are here in Vancouver, British Columbia, Canada. We also have offices in Europe and Asia.
Ballard Power Systems Europe is located in Denmark, servicing the European market.
We also have an office in China — at Guangdong, China — for sales and service. We also have a small office in the United States in Bend, Oregon, servicing the United States market.
We also have an important joint venture in China with a company called Weichai Power.
It’s the world’s largest diesel engine manufacturer. We’re a 49% owner of that joint venture and that joint venture in China is important with the China market being the largest market for engines for commercial vehicles.
And that joint venture is to assemble Ballard-designed engines — stacks and engines for the Chinese market. So that’s our basic footprint.”
Mr. Guglielmin details fuel cell technology for investors:
“A fuel cell is a rather simple looking product, but quite complex. A fuel cell is an energy conversion device. And I’ll distinguish that from a battery, because obviously, when we think about zero-emission transportation, one often thinks of battery-electric, also, Tesla, obviously, which is using lithium-ion batteries.
I’ll just distinguish, where a battery, the fuel in a battery, is stored within the battery, as we all know. And then the life of the battery is determined by how long the charge can stay in a battery and you have to recharge it.
A fuel cell, on the other hand, is more of a conversion device. The fuel is outside of the fuel cell, so it’s stored in a tank.
No different than the hydrogen fuel stored in a tank, no different than a combustion engine. And the fuel cell itself has some attributes of the battery in that the fuel that you use from the tank passes through the fuel cell and combines with air, ambient air; it creates an electro-chemical device.
So the oxygen combining with the hydrogen passing through a fuel cell creates electricity. And the only byproduct from that electricity is a small amount of water, so the H2O that comes out of the combination of hydrogen and oxygen.
So the fuel cell has an anode and a cathode and a membrane in the middle.
An individual cell is really combined in, what we call, an MEA, or a membrane electrode assembly, which is basically an anode and a cathode — with a catalyst in the middle that allows the protons and so forth through a pass-through and some plates, usually a carbon-based plate, to provide the rigidity and allow the hydrogen to flow.
And so each fuel cell, an individual cell, creates a little bit of power and as you stack these up, a number of individual cells, that’s what we call a fuel cell stack, which is literally a stack of a number of individual cells.
And that fuel cell stack is essentially the device I described. It’s a solid-state device with no moving parts. You can generate enough power in an individual stack to move a bus or a truck.
There’s a tremendous amount of energy density in a fuel cell. You can create an awful lot of power on a very small device and that stack goes into an engine with a bunch of balance of plant.
And fundamentally, that fuel cell can replace the combustion engine in the same way that a battery could. And then from that point forward, what a fuel cell does, which is where the batteries and fuel cells start to compete, if you will — that’s the power source that drives the electric drive system.
So when you think of a battery-electric vehicle, a Tesla, you’ve got the batteries that are driving the electric drivetrain and all of the electronics. A fuel cell car or fuel cell truck has essentially the same electric-drive system.
It’s just using a fuel cell with the hydrogen to drive that system. So we call it a fuel cell electric vehicle. It’s a pure electric vehicle driven by the fuel cell itself. So that’s really what a fuel cell is.
It’s a relatively simple-looking device, but it’s quite complex.
There’s a lot of chemistry, a tremendous amount of patents and know-how that goes into the design of those individual fuel cells and also how to stack them up and put them in an engine and that’s what Ballard does.
We design, we make our own fuel cells, we make everything inside the stack, we make our own MEAs, we make our own plates. And that’s where a lot of our patents and know-how resides. It’s right in the core of the fuel cell itself.”
The company is positioned for global clean energy growth:
“China is a massive market opportunity. And so in China, we’ve been active in China for many years.
We have CRRC. It’s one of the world’s largest train companies, rolling stock train companies. We’ve did some work in the rail market with CRRC many years ago. We’ve done some work as well in the light-duty passenger train market as well.
In China, we have a project in the train market.
But we announced two years ago, 2018, this joint venture with Weichai Power. Again, Weichai makes about 1 million diesel engines a year — they’re the largest supplier of diesel engines to the truck/bus, commercial truck market in China. They recognized, as part of this momentum in China, to move to zero emissions and fuel cells. They recognized the need to do that in their business and so they have had to make a direct equity investment.
Two years ago, they made a 19.9% investment in Ballard, and then we set up this joint venture with Weichai.
They own 51%, we 49%, and that joint venture is up and running today. It went into operation in about the mid-last year 2020. And again, it assembles Ballard-designed engines. So we design them and we also sell the core MEA — the core material that goes into the fuel cell that was on that technology.
Ballard continues to sell those to the joint venture, but the joint venture then assembles these stocks and engines for the truck, bus and the forklift market for the Chinese market.”
Get the complete detail on Ballard Power and read the entire 6,488 word interview, exclusively in the Wall Street Transcript, Tony Guglielmin, CFO of Ballard Power Systems.