EU-Backed Electrolyzer Generation Takes Center Stage After Nel ASA's $7.5 Million Legal Resolution

Norwegian hydrogen firm Nel ASA pays $7.5M to end Iwatani dispute, removing legal overhang as it commercializes next-gen electrolyzers with EU backing and a €135M grant.

Nel ASA has drawn a line under a damaging US legal dispute with Iwatani Corporation of America, paying $7.5 million to end a lawsuit that threatened to drain resources and distract management. The settlement, reached out of court, removes a significant overhang from the Norwegian hydrogen specialist just as it prepares to commercialise a new generation of electrolyzers that could radically lower the cost of green hydrogen.

The conflict originated in February 2024, when Iwatani sued Nel and related entities over technical issues at hydrogen fuelling stations in California. Rather than fight a potentially costly and unpredictable trial, both sides opted to settle. The agreement spares Nel further legal fees in the US and eliminates the risk of a damaging judgment. In a joint statement, the companies emphasised their interest in future collaboration.

Investors, however, have so far shown little enthusiasm. On Tuesday, the stock slumped nearly 6% to EUR 0.26, bringing the weekly loss to roughly 22%. Even after that setback, the shares still trade about 43% higher since the start of the year, reflecting a broader rally in hydrogen names that has since stalled. The market remains cautious as the entire hydrogen sector grapples with weak order intake and repeated delays to large-scale projects.

The next catalyst for Nel could be its new pressure alkaline electrolyzer platform, sales of which began in May after eight years of development. The company claims the system can reduce capital expenditure for customers by up to 60%, making green hydrogen far more competitive with grey hydrogen derived from fossil fuels. The European Union has thrown its weight behind the technology, pledging up to EUR 135 million to support the industrialisation of production at Nel’s Herøya facility in Norway. Initial capacity stands at one gigawatt per year, with plans to expand to four gigawatts.

Financially, the company enters this crucial period with a cash position of just over 1.4 billion Norwegian kroner at the end of the first quarter. Yet the burn rate is notable: operating cash outflow reached 165 million kroner in the period. Order intake stumbled to only 85 million kroner, and the backlog shrank to a little above one billion kroner. Management will present half-year results on July 15, 2026, offering investors a first detailed look at how the new platform is being received by customers.

With the legal distraction now firmly in the rearview mirror, Nel must deliver operational wins. The EU grant provides a sturdy financial runway, but the real test lies in converting technical promise into tangible orders. The stock’s recent weakness suggests the market will need convincing that the new electrolyzer generation can lift the order book and stem the cash burn.