Ballard Power Announces $17M Deal to Provide Fuel Cell Power Products for ~300 Buses in China

Ballard Power Systems

signed a new long-term license and supply agreement with an existing partner in China, Guangdong Synergy Hydrogen Power Technology Co., Ltd. ("Synergy"), to provide fuel cell Power Products and Technology Solutions in support of the planned deployment of approximately 300 fuel cell-powered buses in the cities of Foshan and Yunfu, China. The deal has an estimated initial value of $17 million through 2016, with the opportunity for significant recurring royalties starting in 2017. The agreement includes supply and sale of fully-assembled fuel cell power modules, ready-to-assemble module kits, a technology license for localization of assembly, supply of proprietary fuel cell stacks and long-term recurring royalties leveraged to unit volumes of locally assembled modules. "We are thrilled to have Ballard selected as the exclusive supplier of fuel cell technology for the largest ever global deployment of fuel cell buses," said Randy MacEwen, Ballard President and CEO. "The Foshan and Yunfu governments are demonstrating strong vision and leadership by championing a collaboration model that addresses mass transit needs, supports air quality initiatives and contributes to continued economic development." Mr. Xu Guo, Vice Mayor of the City of Yunfu said, "We are moving the Cities of Foshan and Yunfu into the future by adopting clean, quiet and economical fuel cell buses. And, we are pleased to have a strong consortium of partners, including Ballard, Synergy and Feichi Bus." Mr. Ma Dongsheng Frank, CEO of Synergy stated, "We selected Ballard, the global leader in fuel cell technology for buses, as our exclusive technology partner. Ballard's flexible approach in developing a partnership model along with leading technical solutions that address the unique needs and opportunities in the Chinese market has been impressive. We look forward to localizing assembly of Ballard fuel cell modules in Foshan / Yunfu to meet the fast-growing demand for clean energy buses in China." Mr. Chen Xiaomin, Vice Chairman of Foshan Automobile Transportation Group Co., Ltd. added, "Foshan Automotive is a leader in the manufacture of clean energy buses in Guangdong Province. We see strong demand for low carbon solutions, and are excited by the opportunity to be first-to-market with a fuel cell bus offering. This deal represents a potential catalyst for further advancement and adoption of fuel cell buses in China." Today's ceremony at Ballard was also attended by senior representatives of the Canadian Federal Government as well as the British Columbia Provincial Government, including B.C. Minister of International Trade Teresa Wat. Minister Wat said, "This deal shows that B.C. is ready to meet China's rapidly-growing clean energy needs and is a world leader in fuel cell technology with the necessary talent and skills to deliver in the global marketplace. This job-generating deal is a great accomplishment for Ballard and our government is a proud supporter of the company's growth throughout the Asia Pacific Region." Mr. MacEwen continued, "Given its scale and importance, this deployment in Foshan will serve as a major competitive advantage for Ballard and our local partners as we seek to bring additional Chinese cities onboard. China's new energy program involves forty-eight cities that are focused on addressing severe air quality issues, in part through expansion of public transit, with one thousand clean energy buses to be deployed in each participating city." Alfred Wong, Ballard's Director - Sales for Asia Pacific added, "This follow-on agreement with Synergy represents a strong statement of support for Ballard's technology and products in terms of meeting the emerging interest for fuel cell adoption in China's enormous mass public transportation sector. Ballard has a strong brand in China and we are moving quickly to seize early market demand." On September 24, 2015, Ballard announced that the Company is developing two new configurations of its FCvelocity®-HD7 power module, to deliver 30 kilowatts (kW) and 60 kW of net power, respectively, in addition to the 90 kW net power configuration which was launched in June 2015. These two new module configurations are planned to be available for commercial deployment in 2016 and will be supplied to Synergy under the deal announced today. Today's announcement is also in addition to Ballard's June 2015 announcement regarding the signing of definitive license and supply agreements with Synergy as well as with Nantong Zehe New Energy Technology Co, Ltd. ("Zehe"), valued at $10 million, for the delivery of FCvelocity®-HD7 90kW net power modules, for use in 33 fuel cell buses to be deployed in the cities of Yunfu and Rugao, China. Ballard's high performance FCvelocity®-HD modules have demonstrated exceptional reliability while clocking millions of kilometers on the road, principally in bus fleets. FCvelocity®-HD7, Ballard's seventh-generation heavy duty module, offers a number of key advantages: Performance - The FCvelocity®-HD7 heavy duty zero-emission fuel cell power module offers superior performance based on Ballard's proprietary fuel cell stack technology, demonstrating unmatched fuel efficiency, durability and flexibility to operate in extreme conditions that include cold as well as hot, humid environments. Integration - A simplified and scalable design enables the module to be integrated into multiple transportation applications and the modular design of the air and cooling systems allow flexible and simple "drop-in" integration into vehicle drive trains. Cost Reduction - The new FCvelocity®-HD7 power module features a reduced parts count, simplified design and lower parasitic load. Key components are manufactured with high-volume production processes, thereby reducing capital cost of the module and maintenance costs associated with parts replacement over the life of the product. Ballard's HD7 represents a cost reduction of more than 30% from the prior generation HD6 product and a cost reduction of approximately 65% in this product line over the past six years. Leadership - The FCvelocity®-HD7 reflects Ballard's unmatched experience in the field, including: more than 20-years' supporting transit applications; production of more than 150 modules through seven generations of product; working with ten different system integrators and OEMs to power more than 100 buses in 20 cities worldwide; powering fuel cell buses over more than 7.5 million kilometers (4.7 million miles) and transporting more than 10 million passengers in revenue service.