Plug Power Jumps After 'Transformational' Hydrogen Venture Pact Announced

Shares of Plug Power (PLUG) are on the rise on Tuesday after the company and Renault (RNSDF) announced the signature of a Memorandum Of Understanding to launch a 50-50 joint-venture focused on vehicle systems based on hydrogen fuel cells. Commenting on the announcement, Roth Capital analyst Craig Irwin called the JV with Renault "transformational" and said he sees Plug entering the venture from a position of strength by contributing the key hydrogen technology.

HYDROGEN JOINT VENTURE: Groupe Renault and Plug Power announced the signature of a Memorandum Of Understanding to launch a 50-50 joint-venture based in France by the end of the first half of 2021. "The strategic JV will position Groupe Renault and Plug Power to become key players in Europe in the research and development, transformation, manufacturing, and sale of fuel cell-powered vehicles and hydrogen turn-key solutions in the coming years," the companies said. This joint-venture platform will serve the fast-growing market of fuel cell light commercial vehicles, taxis, and commercial people transportation. Bringing complementary and competitive strengths together, and will build on Renault's experience in new energies and position in electric light commercial vehicles and on Plug Power's of experience in fuel cell technologies and hydrogen solutions.

The initial focus will be on the heavy van segment utilizing the Traffic and Master vehicle platforms. The joint venture will combine the vehicle manufacturing capabilities of Groupe Renault with the fuel cell and hydrogen system manufacturing knowledge of Plug Power, establishing a vertically integrated fuel cell stack and system manufacturing center in France for integration into LCV vehicle platforms. In addition, this manufacturing center will provide hydrogen refueling systems, a key part of the hydrogen ecosystem. The partnership will create a hydrogen vehicle eco-system solution company that offers vehicles, hydrogen fueling stations, hydrogen fuel, and services to customers. The JV will start commercializing fuel cell LCV's in Europe starting in 2021 with pilot fleet deployments. Finalization of this joint venture is pending on the conditions normally applicable to this kind of operation, among which the presentation to employee representative bodies in accordance with applicable regulations and the potential clearance from the relevant competition authorities and should be completed by the end of the first half of 2021.

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