Plug Power Inc (NASDAQ:PLUG) is at the forefront of the fuel cell market. But many investors fear that the entry of General Electric Company (NYSE:GE) could be a big threat to Plug Power. GE has the financial and technological resources to build a successful fuel cell business. However, the Jeffrey Immelt-led company might not be a threat to Plug Power.
Plug Power and GE target different markets
GE announced Tuesday that it had achieved a breakthrough in the fuel cell technology. It is building a manufacturing plant in New York to produce fuel cells that run on natural gas. But its ‘breakthrough’ technology is aimed at a different market from Plug Power’s. GE’s technology involves solid oxide fuel cell. It doesn’t require any expensive catalyst, so it will have a lower cost.
General Electric’s fuel cell systems operate only at higher temperatures. That means they are not suitable for smaller applications, which is the target market of Plug Power. The Latham, New York-based company uses proton exchange membrane fuel cells produced by Ballard Power Systems Inc. (NASDAQ:BLDP). This system requires expensive catalyst materials such as platinum. But Plug Power’s system has higher efficiency at low temperatures, making it suitable for smaller applications such as forklifts.
General Electric’s fuel cell system can produce 1-10MW of power, and it will mostly be used for electricity generation. GE’s offering would be a threat to Plug Power if it Jeffery Immelt translates the company’s technology for smaller offering. The Fairfield, Connecticut-based industrial conglomerate said that it is already filling the New York plant with gas storage tanks, fuel cell test stations, screen printers and robotic thermal spray equipment.
Wal-mart expands its contract with Plug Power
Earlier this week, Plug Power announced that Wal-Mart Stores Inc. (NYSE:WMT) has expanded on its initial contract to install hydrogen refueling stations. The retail giant signed a contract with Plug Power in February, asking the fuel cell company to supply 1,738 GenDrive units over the next two years. The deal was worth $50 million. Plug Power has now won a new order to install a hydrogen refueling station at the retailer’s Sterling, Illinois distribution center.
Plug Power shares fell 0.74% to $5.35 in pre-market trading Friday.