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Ecommerce giant Amazon has announced intentions to purchase 23% of Plug Power, maker of hydrogen fuel cells for use on vehicles including forklifts.
Amazon plans to equip forklifts at 11 of its fulfillment centers with hydrogen fuel cells and will be supporting them with Plug Power’s GenKey technology, which offers faster charger times, reduced costs and energy efficiency in Amazon’s fulfillment operations.
The agreement with Amazon may be worth as much as $600 million for Plug Power, which is located in Latham, New York. According to MarketWatch, the agreement potentially includes a potentially large equity investment.
According to Bloomberg, Plug Power had never made a profit and was until recently, a penny stock. Amazon’s purchase of fuel cells for forklifts will create $70 million of extra revenue for the company this year. That compares to a total revenue of $56 million in 2016.
Plug Power has lost more than two-thirds of its market value since the first quarter of 2014, when it was valued at more than $1 billion.
Fuel cell makers had been the darlings of Wall Street in 2014 because the technology was expected to be widely adopted in electric vehicles and forklifts. However, the sector lost favor with investors because the technology failed to gain traction. The Amazon deal with Plug Power could rekindle interest in makers of fuel cell.
Currently, Amazon uses battery-powered forklifts. Plug Power’s narrow focus of powering forklifts with fuel cells, essentially makes it the only player in the market.