Ballard Power Systems announced a global corporate restructuring that will allow it to cut total operating expenses by more than 30%.
The Canadian fuel cell manufacturer blames a slower-than-expected transition to hydrogen fuel cells and a slow rollout of hydrogen fueling infrastructure.
“As discussed during our recent earnings call, in the context of a challenging macroeconomic and geopolitical outlook and amid protracted policy uncertainty, we see a multi-year push-out of the availability of low-cost, low carbon hydrogen and hydrogen refueling infrastructure,” Randy MacEwan, president and CEO said in a release.
“As this delay represents a significant headwind to our corporate growth plan, we are implementing a cost restructuring to moderate our investment intensity and pacing to better align with delayed market adoption. We expect our restructuring measures to impact our global operations, yielding annualized total operating expense savings in excess of 30%, with a substantial part of the annualized savings being realized in 2025.”
Ballard is also reassessing plans to invest in manufacturing capacity expansion in Texas and is revisiting a joint venture in China that’s underperforming.
“Notwithstanding the slowing timeline for market adoption, we remain confident in the long-term value proposition of hydrogen fuel cells,” MacEwan said. “While the speed of travel has changed, we have unwavering conviction on the direction of travel, with clean hydrogen and fuel cells playing an important role in decarbonizing heavy mobility applications.”
As part of the restructuring, the company is parting ways with chief financial officer Paul Dobson and chief operating officer Mark Biznek, who will be replaced by Kate Igbalode and Lee Sweetland, respectively.
“Paul and Mark will support their respective successors in an orderly transition. We thank both Paul and Mark for their dedication and valued service to Ballard,” said MacEwen.