July 06, 1999 11:52
The Car of the Future
July 06,
1999/FOOLWIRE/ -- How's your drive? Over the next few years the
environmental cry for emission-free motoring coupled with consumer hopes for
quieter and more efficient cars will be put to the test. At the forefront of
this automotive movement is hydrogen fuel cell specialist Ballard Power
Systems (Nasdaq: BLDP).
The Ballard process involves combining oxygen and hydrogen to create energy.
The O is easy. It's in the air. The H is a little trickier and that's where
the company's cells extract the element from hydrogen-rich methanol.
The company has no shortage of believers. DaimlerChrysler (NYSE: DCX) has a
20% stake in the company, while Ford (NYSE: F) owns a 15% piece. Beyond
the
well-driven part-owners, the company has also spent the last two years
filling orders from auto heavies General Motors (NYSE: GM), Honda, Nissan,
Volvo, and Volkswagen.
Today Yamaha enters the fold. While the company placed a petty $250,000
order this morning, it was, like many others in the past, done for
experimental purposes. If the Japanese trials prove successful, who knows
how big a role Ballard will play in fueling the future of Yamaha motorcycles
and other leisure vehicles. Shares of Ballard have powered up $7/8 to $30 on
the news.
The one stickler -- convincing the conveniently located gasoline stations to
serve up methanol along with the dirtier petroleum it might someday replace
-- has remedied itself through initiative and consolidation. Last year Mobil
(NYSE: MOB) came on board. In May, Royal Dutch (NYSE: RD)/Shell (NYSE:
SC)
teamed up for a test of the California roadways that will put 50 cars to the
Ballard-powered test over the next four years. The acquisition-intensive
energy sector has expanded the potential of the fuel cell's reach. With
Exxon (NYSE: XON), BP Amoco (NYSE: BPA), and Atlantic Richfield (NYSE:
ARC)
now all set to hook up with the Ballard allies, resistance has softened. A
major hurdle seems to have been cleared, with the knowledge that cheap and
abundant water is also a rich source of hydrogen and, in theory, may one day
come to power the cells.
But it is the same sector consolidation that found Ballard catering to the
Big Three automakers stateside when Daimler-Benz won the heart, and
pocketbook, of Chrysler last year. Ballard is not alone, despite holding or
having filed for more than 200 patents. However, with the emission-free
momentum the company is building it will be hard for the United Technologies
(NYSE: UTX) of the world to catch up if and when the cells go mainstream.
And, despite the impressive resumé Ballard has built up, that future is at
least a half-dozen years away. Until then, enjoy the roar of the cumbersome
combustion engine -- before tomorrow makes it grow silent.
by Rick Aristotle Munarriz
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