5 Best Hydrogen Fuel Cell Stocks to Buy Now

Indiana-based Cummins manufactures and provides services related to engines, fuel systems, controls, air handling, filtration, emission control, electrical power generation systems, and trucks. In November, Cummins and Navistar International said they will work together on the development of a hydrogen-powered Class 8 truck. The project will be partially funded by the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy.

Jean-Marie Eveillard’s First Eagle Investment Management is one of the leading hedge funds tracked by Insider Monkey having stakes in Cummins, with 2.11 million shares of the company, as of the end of the third quarter. The net worth of these shares is $445.25 million. We recently talked about CMI in detail in this article. Here is a short excerpt:

“Based on the 3.5GW of Industry Electrolyzer sales, the company’s Cummins Electrolyzer business expects a $400 million revenue in the year 2025 and to provide 100 green trains powered by its fuel cell systems within the same year. Just so you know, 1 kilogram of hydrogen is equivalent to 3 kilograms of diesel in terms of energy. Cummins’ Electrolyzer Efficiency is composed of Alkaline(55%-70%), Proton Exchange Membrane or PEM(65%-80%), and Solid Oxide(75%-90%). Meanwhile, its system efficiency is made up of PEM Fuel Cell(60%), Solid Oxide Fuel Cell(80%), Diesel Engine(50%), and Natural Gas Engine(35%-37%).

According to Cummins, renewable energy costs around $0.05-$0.10 per kWh. In order to produce 1kg of Hydrogen, there must be around 50kWh electrolysis. Roughly around $2.50-$5.00 worth of electricity is required to produce 1kg of hydrogen. On the other hand, the PEM electrolyzer costs $1 million per MegaWatt and equates to about $0.60 per kg of hydrogen. Approximately $3.10-$5.60 per kilogram is needed for the pre-distributed cost of hydrogen and an additional $10 per kilogram for the distribution costs. However, if the energy cost will be lowered to $0.05 per kWh and Capex costs by 50%, this will discount the pre-distributed cost to just around $2-$3 per kg.

This clean energy can be used in the production of steel and as a substitute for diesel engines. As of the moment, the current production of Hydrogen today is 70 million tons. Steel production is estimated to require 47-67 million tons of hydrogen which will roughly cost $300 billion at current prices. Replacing the diesel engines will need around 500 million tons of hydrogen, which costs $2.5 trillion at recent prices.”