Ballard Power’s Bold Pivot: Cost Cuts and Cancelled Expansion Shock Investors
Ballard Power Systems has undergone significant restructuring, sparking cautious optimism from analysts at KeyBanc and Roth Capital. The company's share price fell despite strong quarterly results, as it cancelled expansion plans and refocused its strategy.
CEO Marty Neese's first strategic moves include operational excellence and capital discipline. The company reduced capital expenditure guidance to $8–$12 million for 2025 and cancelled the planned 3-gigawatt hydrogen fuel cell gigafactory in Texas. This decision was due to changed U.S. federal funding conditions and the assessment that existing capacity is sufficient. Ballard also cancelled its China joint venture strategic review as part of comprehensive cost-cutting measures, achieving a 40% reduction in cash operating costs and a 36% reduction in total operating expenses year-over-year.
Revenue surged 120% to $32.5 million in the third quarter of 2025, driven by increased deliveries in the bus and rail sectors across North America and Europe. Despite this, Ballard's share price plummeted due to the scrapped expansion plans. The company's operating costs fell by 36%, and gross margins improved to 15%, indicating effective cost control. However, the order backlog shrank by 9% from the previous quarter to $132.8 million. Ballard is scaling back operations in China and refocusing on Europe.
Ballard Power Systems' net loss of $28.1 million was well below forecasts and a fraction of the $205 million loss recorded in the same period last year. With $525.7 million in cash reserves, the company has enough runway to execute its strategic pivot without immediate new funding. Analysts await clearer signs of growth before turning more bullish on the company's prospects.
