Plug Power’s (NASDAQ: PLUG) stock jumped 12% to around $33.50 today, mainly on the heels of a new partnership with Airbus that will study how green hydrogen can help decarbonize air travel. The potential scale of an Airbus partnership pleased investors and it also coincided with another announcement – PLUG will invest in aerospace company Airflow for developing a hydrogen fuel cell technology for aircrafts. The first reaction of the markets is clear but how will this affect the long-term Plug Power stock forecast?
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Airbus Partnership
The strategic partnership between Plug Power and Airbus will focus on studying the feasibility of green hydrogen as an aircraft fuel and how it can be deployed on global airports.
Back in 2020 Airbus identified the potential of green hydrogen to help with decarbonizing air travel with its “Hydrogen Hub at Airports” concept and today marks the first practical step in that direction. The two companies will perform a joint study and work on a roadmap that charts a path to green hydrogen infrastructure being constructed at airports (Plug Power’s side) and how to use hydrogen as a fuel for aircrafts (Airbus’ contribution).
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“We’ve already revolutionized electric trucks and industrial fleets on the ground, so now we’re turning our sights to the skies,” said Andy Marsh, CEO for Plug Power. “And we’re thrilled to start this journey with Airbus. Not only do we envision a future where aircraft everywhere are powered by green hydrogen, but the airports that serve them as well, including ground support equipment, forklifts, and vehicles that shuttle consumers around airports, and to gates. In aggregate, this should go a long way toward building a more sustainable future for the global aviation industry.”
Glenn Llewellyn, Airbus Vice-President, Zero-Emission Aircraft, added: “We at Airbus see huge potential for green hydrogen to power our future zero-emission aircraft. This partnership with Plug Power – a true pioneer in developing green hydrogen infrastructure across the United States, and key points across Europe and Asia – will enable us to leverage their expertise to decarbonize airports while preparing them for the arrival of hydrogen aircraft by 2035.”
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Airflow Investment
And then we have the deal with Airflow for what is essentially a hydrogen plane. The two companies will develop and certify a hydrogen fuel cell-based propulsion system designed for a new generation of sub-regional aircraft called the Part 23 aircraft. This partnership is part of Plug Power’s ongoing strategy to bring its hydrogen ProGen fuel cell technology to new markets within the aerospace industry for a net zero aviation.
It will also enable the Airflow Model 200 aircraft to fly missions up to 500 miles with nine passengers or 2,000 pounds of cargo without incurring emissions. As part of the deal, the two companies will integrate and test a full-scale, ground-based powertrain prototype.
After a successful ground demonstration, they plan to retrofit the powertrain into an aircraft with the ultimate goal of certification.
“Airflow represents another vital leg of the stool in our aerospace strategy. In order to establish a complete ecosystem for the aviation market and enable a global transportation system powered by green hydrogen, it’s essential that we work with players across aircraft classes who deeply understand the unique applicability of hydrogen in an industry as weight-sensitive as aviation. We see the development and certification of a system for Airflow’s Part 23 aircraft as an ideal entry point into the aerospace market that enables expansion into larger aircraft programs,” said Plug Power CEO Andy Marsh who had a busy press day.
As Airflow’s strategy is to expand carbon-neutral aircrafts, offering airlines several options to match the best propulsion solution to their missions, this partnership would enable Airflow to meet its customer demand quickly and broaden the application of hydrogen. Plug Power will also be Airflow’s preferred hydrogen provider which opens opportunities for Plug’s hydrogen refueling infrastructure to co-locate at customer airports.
Plug Power Stock Forecast
Plug Power has had a wild year . With today’s jump it’s actually trading almost exactly at the price it started the year. The price more than doubled in the early months of 2021, but steadily declined in the following six months. Several lacklustre quarterly earnings have dampened the mood, but volatility has been high and the company (and the stock) have gained a large following.
The rebound between May and July was impressive after some positive developments were announced but the last three months have been characterized by a sideways movement. Today’s surge is reminiscent of the trading in January and February and does show optimism is building. The first level to watch is the July high around $36. Should this “Airbus” rally manage to push prices over that price, we could be looking at more upside. Reinforcing it with some solid quarterly earnings and an improved guidance on November 8th could provide the fuel for a sustained rally and an attempt to reach those highs from the start of the year.
Where do you think PLUG is headed? Let us know in the comments down below!
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