- Expected contract value of C$60-100 million
VANCOUVER, March 6, 2013 /PRNewswire/ - Ballard Power Systems (NASDAQ: BLDP)(TSX: BLD) has announced signing of an agreement with Volkswagen Group ( www.volkswagenag.com) for a major Engineering Services contract to advance development of fuel cells for use in powering demonstration cars in Volkswagen's fuel cell automotive research program. The contract term is for 4-years, with an option for a 2-year extension. The expected contract value is in the range of C$60-100 million.
Dr. Juergen Leohold, Head of Group Research at Volkswagen AG said, "This research agreement with Ballard demonstrates our commitment to the development of clean energy fuel cell transportation alternatives. I anticipate accelerating our automotive fuel cell program as a result of this collaborative effort, which will bring together additional fuel cell skills and expertise in both organizations."
Work will involve the design and manufacture of a next-generation fuel cell for use in Volkswagen HyMotion demonstration cars. Ballard engineers will lead critical areas of fuel cell product design - including the membrane electrode assembly (MEA), plate and stack components - along with testing and integration work."The announcement of this research agreement with Volkswagen Group, a recognized global leader, is a major step for Ballard both strategically and financially," said John Sheridan, Ballard President and CEO. "It represents a tremendous ramp-up in our Engineering Services business following the recent expiration of the five year automotive non-compete agreement. Ballard's focus with Volkswagen in this new automotive fuel cell research program will parallel our continuing work in commercial fuel cell markets for backup power and material handling — enhancing product durability and performance while radically reducing product costs." Over the past several years, Ballard has made significant advances in its commercial fuel cell products, with average product cost reductions of 60% and increases in product durability. Sales of Ballard's clean energy fuel cell products have also been accelerating, with a 30% cumulative annual growth rate (CAGR) in revenue since 2010.