Jim: This article backs up exactly what I have said for a long time, which is that the bus market is minuscule: Mercedes hopes to sell 500 buses per year in 2004 and maybe 1000 per year after that.
The fuel cell engine is unlikely to have a value above $50,000 per bus or the buses would be too expensive and no one would buy them. (I am probably being generous here, because bus engines aren't a whole lot bigger than car engines, and if engine part of the car doesn't cost a whole lot less than $50,000 there aren't going to be a lot of fuel cell cars on the road. Furthermore, the car engines will run on reformed gasoline or methanol, which will make them more expensive than the bus engines, which can use hydrogen because of the ease of refueling from a central depot. Probably the bus engine will have a value closer to $10,000 than $50,000, but let's go ahead with the higher number.)
So, in 2004, if Mercedes sells all 500 units that will represent $25,000,000 worth of fuel cell engines. But that money doesn't go to Ballard - it goes to DBB Fuel Cell Engines, the joint venture, in which Ballard owns only 27%. So Ballard's share of the joint venture's sales are $6,750,000 in 2004 and twice that thereafter, if Mercedes succeeds in its goal of selling 1000 buses per year.
If Ballard had a $3 million market cap, the prospect of having $6,750,000 in sales six years from now might be considered a plus. At $3 billion market cap? You tell me.
If the correct figure is $10,000 per engine rather than $50,000 Ballard's share of the revenue would be $1,350,000 in 2004 and twice that in 2005.
Yes, I do know that Ballard will sell fuel cells to the joint venture to be made into complete engines, so its sales would actually be a little higher, but whether those sales would be profitable to Ballard is questionable. That depends on the transfer price between Ballard and the JV, and I continue to believe that the dominant partner, Daimler, will not allow Ballard to make any noticeable amount of money while the JV is in the red, which it is expected to be for a few years after fc cars first hit the market.
Of course, all this assumes that Ballard's fc buses will actually work. Evidently that wasn't the case in Chicago. |
