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Vehicles ready to ship from the Volkswagen plant in Puebla, Mexico, Wednesday, January 21, 2015. An agreement between Ballard Power Systems and Volkswagen extends an existing engineering services contract by two years and transfers hydrogen fuel cell technology to Volkswagen AG and Audi AG. The news sent Ballard’s volatile shares up 64.3 per cent, or $1.37, on Wednesday, closing at $3.50 on the Toronto Stock Exchange.

Brett Gundlock/The Globe and Mail

Ballard Power Systems Inc. has signed one of its largest deals ever, an $80-million (U.S.) agreement with Volkswagen Group that sent the Burnaby, B.C.-based clean technology company's shares soaring by nearly 65 per cent.

News of the agreement, which extends an existing engineering services contract by two years and transfers hydrogen fuel cell technology to Volkswagen AG and Audi AG, sent Ballard's volatile shares up 64.3 per cent, or $1.37, on Wednesday, closing at $3.50 on the Toronto Stock Exchange. The shares have fallen steadily over the past year, and this deal follows the loss of an important contract in China which caused the shares to drop nearly 10 per cent in January.

In an interview, Ballard CEO Randy MacEwen said the deal resulted from intellectual property his company purchased about a year ago from United Technologies Corp. and was hugely significant for the Burnaby firm.

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"We haven't had anything this sizeable in the recent past," Mr. MacEwen said from Germany, where he is currently traveling on business. "I view the deal as changing the landscape for Ballard."

Mr. MacEwen said the deal "materially strengthens" Ballard's balance sheet in the short term and extends valuable contracts over the medium-term, while still giving the company flexibility over the long-term to use the patents in buses, non-automotive and pre-commercialized applications.

For Ballard, the Volkswagen agreement is a welcome boost. The company's shares have declined steadily over the past year, continuing a long slide from early 2000, when the company rode a wave of optimism about alternative fuel sources and its shares reached nearly $190. In January, the company's hopeful push into China – where the government is promoting green technology amid an attempt to clean up its smog-choked economy – received a setback when they were forced to cancel a licensing deal with a key client who had missed several payment deadlines.

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