Plug Power stock has tumbled more than 52% in the last six months. But the company continues to improve its business to emerge as a strong long-term player. Hydrogen and batteries are in a race to dominate the future of the automobile market. Though many believe that batteries are more likely to go mainstream, fuel cells have an advantage over batteries: faster charging time.
Plug Power is not going after all markets
Despite fuel cells’ advantage, it is still hard to predict which one will dominate the auto industry. But there are certain applications where fuel cells are more efficient and significantly cheaper than any other alternative. That’s why Plug Power has chosen not to expand into every sector. Instead, the company is expanding into markets where fuel cells are more efficient and cost-effective than other alternatives.
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As can be seen from forklifts, fuel cells can recharge pretty quickly and work continuously, making a cheaper and better alternative than batteries. Currently, Plug Power is expanding into the material handling market. It is producing fuel cells for refrigerated trucks and vehicles that haul luggage at airports. By focusing on specific markets where fuel cells have an advantage, Plug Power has differentiated itself from competitors.
Plug Power has complete control over its supply chain
Plug Power has strategically optimized its supply chain, which is essential for the growth of any company. It produces the fuel cells in-house, controls the fuel charging stations, and has signed an agreement with Praxair to supply hydrogen. Many large companies such as Wal-Mart, BMW, Kroger, Mercedes and others have realized the cost-effectiveness and efficiency of Plug Power’s technology. They have all incorporated fuel cells made by Plug Power into their forklifts.
Last month, Plug Power won a $20 million multi-year contract from SouthernLINC Wireless, a unit of Southern Company. Plug Power CEO Andy Marsh is confident that the company’s revenue will almost double from last year to $130 million in 2015. Moreover, according to Energy Manager Today, the North American fuel cell market is expected to grow at 30% annual rate between 2013 and 2018.