Garth: Wow! Thank you for your praise; I'm blushing. Of course I have made mistakes here. Given the volume of my posts until I got busy earlier this year it would be surprising if I didn't, especially since I, like everyone, try to predict things on the basis of limited information. And I never had any doubt that you and many others here could find them easily enough. Others, though, incapable of refuting my arguments, would just mutter that my posts were full of mistakes and think that that was good enough. I don't like to let that slip by.
Having said all that, nothing I see about Ballard's wonderful success in lining up support from investors and strategic partners changes my mind that there are some huge technical hurdles that it still must solve, any number of which are showstoppers. The prestige of Ballard's partners mean nothing to atoms and electrons.
I also think there are some fundamental economic hurdles that won't go away. The price of hydrogen is so high that a fuel cell vehicle or stationary power plant running on it may need an efficiency of greater than 100% to be competitive on a cost basis. Reforming of hydrocarbons solves some of the cost problem (dealing with liquid hydrogen at near absolute zero, for example), but I suspect that tiny chemical plants (that is what a reformer is) are less efficient than the giant plants that make hydrogen--maybe an efficiency level of the fuel cell of over 100% might still be necessary. And as soon as you deal with reforming at the fuel cell, there goes zero emissions out the window.
People talk about solar power splitting water to create hydrogen, but if that were economic it would be used today; the fact that it is not tells me that it would raise the price of hydrogen, not lower it. In fact, any increase in fuel cell demand for hydrogen, given the difficulty of getting approvals to put up new chemical plants to make the stuff, may well raise its price and take away the incentive to use it.
In the meantime, the internal combustion engine people are disinclined to commit suicide, so when the fuel cell cars come out, if they ever do, the competition will be rougher than investors assume. And I am extremely impressed by the Toyota Prius hybrid, being sold commercially right now in Japan, with 66 mpg and very low emissions. That technology will only get better between now and 2004. Daimler and Ford and anyone else may have to sell fc cars at big losses for many years to gain a market foothold, depending on the competitive climate at the time. That wouldn't bode well for the profit level of the joint ventures, or the transfer pricing that the car companies will allow Ballard (that is right, the car companies will dictate the price Ballard charges for the fuel cell--they have other ways of making cars, if they feel like it.)
That doesn't mean Ballard can't succeed, but it is far from the foregone conclusion that hardcore cultists here expect and the stock price implies. That doesn't mean that the stock can't double or triple from here this year, but that won't influence the electrons in slightest.
Now maybe there are good reasons not to worry about these things. Maybe there are solutions in hand which I haven't appreciated yet. But please let's be sure about that before these doubts are called "mistakes".
Thanks again. |
