What happened
The bears are dominating today's market activity, but shares of BallardPowerSystems(NASDAQ: BLDP) are unaffected thanks to the company's news about an impressive new collaboration. Ballard announced that it's partnering with Ford(NYSE: F), and investors are charged up about the company's prospects.
As of 11:07 a.m. ET, shares of Ballard Power Systems are up 9.8%.
So what
Ballard and Ford announced today that they've signed a letter of intent regarding a partnership to develop a hydrogen fuel cell-powered vehicle. According to the deal, Ballard will provide Ford with two hydrogen fuel cell engines in 2023.
Ford plans on integrating Ballard's hydrogen fuel cell engines into its Ford F-MAX 44-ton long-haul tractor truck, which will be built in Turkey. Once the trucks are assembled, Ford plans on testing them on the Trans-European Transport Network, part of which is a planned network of roads, in 2025.
According to the letter of intent, if the program is successful, Ford may name Ballard as the preferred supplier of engines for commercial production of the fuel cell-powered F-MAX.
Addressing the importance of the deal, David Mucciacciaro, Ballard's Chief Commercial Officer, stated:
Ford Trucks is an important 'platform' win for Ballard and a key partner for our high growth potential truck vertical. We are excited by their ambition toward scaled deployments of F-MAX fuel cell trucks. Our FCmove-XDTM is an outstanding match for the range, refueling, payload, and packaging requirements of long-haul tractor customers.
Now what
It's no wonder shares of Ballard are ripping higher on today's news, but investors who find themselves caught up in this hydrogen hype should pump the brakes. The signing of a letter of intent, although noteworthy, isn't a guarantee that the two companies will continue to expand on this partnership. Those who find Ballard's stock appealing today should stand pat and see if the partnership blossoms into something more substantial that could have a material impact on the company's finances.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
