Investing in Fuel Cell Technology
Hydrogen fuel is an attractive source for power generation, transportation, and industrial applications since it is a clean energy option. Hydrogen can be produced via natural gas, nuclear power, biomass, and renewable power like solar and wind. It is also a power source that is expected to be boosted by increased investments by automotive companies as the electric vehicle trend continues. Therefore, investing in fuel cell technology is an alternative for investors that want exposure to the megatrend – “The transformation to a green world”.
According to Precedence Research, the global hydrogen fuel cells market size is expected to surpass USD 131 billion by 2030. It is expected to grow at a compounded annual growth rate (CAGR) of 60.1 per cent from 2022 to 2030. The main reason for this growth trajectory is the increasing popularity and use of hydrogen fuel cells in electric vehicles. Investments in fuel cell technology will benefit from this growth trend, should it prove to materialize.
Benefits of investing in fuel cell technology
By investing in fuel cell technology, the investor gets exposed to the electric vehicle trend and supports a green technology application expected to be of vital importance as the world goes from fossil fuels to green technology options. Fuel cell technology has had somewhat of a patchy growth trend but is increasingly looked into by large automotive manufacturers as a viable power source.
Famous automobile manufacturers like Toyota, Honda and Hyundai are actively involved in producing electric vehicles using hydrogen fuel cells, and bespoke luxury automobile manufacturers like BMW, Vauxhall Motors, and Land Rover are planning to release hydrogen-powered vehicles in the next five years.
There’s an increasing focus on sustainability globally. Consequently, this has increased interest in ESG investing among retail and professional investors. The trend of more capital flows towards areas such as ESG-funds, socially conscious investing funds, green energy funds, etc., can be beneficial for investors in the space as it can boost the fund returns.
Investing in fuel cell technology also involves risk. Investing can result in the investor losing the invested amount.
How to invest in fuel cell technology
There are different ways of investing in fuel cell technology:
- Fuel cell technology stocks - several listed companies are active in the fuel cell technology market. By buying stocks in these companies, the investor gets exposure to the increased demand in the fuel cell technology market.
- Renewable energy and green technology investment funds – daily traded funds that offer exposure to renewable energy and green technology through investments in portfolios of companies linked to this industry. These funds typically hold part of their exposure in companies related to fuel cell technology.
- Exchange-Traded Funds (ETFs) - track the price movement of certain baskets of stocks, such as the FTSE 100. They allow you to gain exposure to a diverse portfolio of stocks and are also very liquid, meaning you can buy and sell them easily. In the renewable energy sector, there are ETFs that track a number of indices. There are also ETFs that track the fuel cell technology sector specifically. While ETFs can be a straightforward way to get exposure to these types of companies, it is important to understand the fees and what the ETF is tracking before you invest.
Why invest in fuel cell technology with AuAg?
- AuAg Funds offers funds that focus on providing exposure to green technology, precious metals and green technology elements. What these metals have in common is that they provide protection against monetary inflation and are necessary for the transformation to a green world – trends that are highly topical today.
- Through investments in the fund AuAg Precious Green, investors get access to fuel cell technology companies.
- AuAg’s funds fit well into a portfolio of traditional assets as they have a low correlation with equities in particular.
- AuAg offers exposure to green technology companies through the fund AuAg Precious Green. The fund has 60 per cent of the fund’s exposure to green tech companies in four different areas; production of clean energy, reduced energy consumption, energy storage/power and extraction of the elements needed for the green transition. The fund also has 40 per cent physical precious metals with a focus on gold.
Is fuel cell a good investment?
The fuel cell technology sector is expected to grow rapidly on the back of investments in electric vehicles by the world’s leading automotive companies. If growth trajectories are met, an investment in fuel cell technology can generate good returns.
What is fuel cell technology?
Hydrogen fuel is an attractive source for power generation, transportation, domestic, and industrial applications, since it is a clean energy option and hydrogen can be produced via natural gas, nuclear power, biomass, and renewable power like solar and wind.
What companies are working on fuel cell technology?
Companies active in the fuel cell technology space include: Ceres Power, AFC Energy, Bloom Energy, Fuelcell Energy, Plug Power and many more.
Is fuel cell profitable?
Most fuel cell companies are unprofitable at this point. A challenge is that hydrogen, the fuel in a fuel cell, is expensive to produce relative to products such as diesel. Costs need to come down for sellers of fuel cell technology to take off.