Nel ASA: Orders Plunge 73% Even as a Cheaper Electrolyser Nears the Market

Hydrogen-equipment maker Nel ASA sees shares in oversold territory after Q1 order collapse, despite EU funding boost and next-gen alkaline electrolysis platform.

The story of Nel ASA in recent weeks has been one of sharp contrasts. The Oslo-listed hydrogen-equipment maker has seen its shares climb 36% since the start of the year, only to shed 17% from a fresh five-week high of 0.32 euros hit in early May. At Friday's close of 0.26 euros, the stock is now in technically oversold territory, with the Relative Strength Index dipping to around 36. The market is weighing genuine technological progress against a brutal downturn in order intake.

That contrast crystallised in the first-quarter numbers. Nel's order intake collapsed by 73% year-on-year to just 85 million Norwegian kroner, leaving the total backlog at roughly 1.1 billion kroner — split between PEM technology at 843 million and alkaline electrolysis at 270 million. The company is sitting on a comfortable liquidity buffer of 1.44 billion kroner, enough to keep running until at least the end of 2026, and a first tranche of EU funding worth more than 10 million euros is due in the second quarter. But the gap between cash on hand and new business won is widening.

The European Union's decision on 10 May to pump more than 1 billion euros into nine hydrogen projects should, in theory, create a tailwind. The grants, spread across seven countries in the European Economic Area, will support the construction of nearly 1.1 GW of electrolysis capacity, aiming to produce over 1.3 million tonnes of renewable and low-carbon hydrogen over the next decade. Among the selected projects are the 500-megawatt Cloudberry facility in Finland and the 300-MW MorGen NJK development in Denmark. Subsidies range from 0.44 to 3.49 euros per kilogram of hydrogen, while Germany and Spain are chipping in an additional 1.7 billion euros through national auction programmes. Yet none of this guaranteed work for Nel.

Competition is intensifying fast. US rival Bloom Energy delivered a blistering quarter, with revenue surging 130% to 751 million dollars and earnings per share of 44 cents beating analyst forecasts by a wide margin. In Denmark, Topsoe has opened a new factory in Herning — a 2-billion-kroner bet on solid-oxide electrolysers that is now the largest facility of its kind in Europe. Topsoe has no binding orders for the plant yet, but it does hold letters of intent with partners such as First Ammonia for projects in the United States.

Against that backdrop, Nel has unveiled a next-generation platform for pressurised alkaline electrolysis that promises to cut customer investment costs by 40% to 60% and targets turnkey expenses of under 1,450 dollars per kilowatt. The technology is market-ready, but investors are demanding hard contracts, not technical specs. Two existing production lines at Herøya are currently idled, and the introduction of the new platform could trigger significant write-downs on the old equipment.

Analysts remain cautious. Berenberg cut its price target to 2.30 kroner, Citigroup lowered its to 2.40 kroner, and the consensus now sits at 2.14 kroner. Both banks point to uncertainty around commercial scale-up. The stock's annualised volatility of nearly 90% reflects the binary nature of the bet: either the order drought breaks or the cash burn accelerates.

There are a few catalysts on the horizon. The public consultation for the BarMar pipeline — a 400-kilometre offshore hydrogen corridor from Barcelona to southern France — is underway. Such mega-infrastructure would require enormous production capacity. On a smaller scale, Nel recently won a 7-million-dollar PEM order from Europe for hydrogen refuelling stations and industrial supply, with operations expected to start in 2027. And researchers at the University of Hong Kong have developed a special stainless steel, SS-H2, that could cut structural component costs in a 10-MW PEM electrolyser by a factor of 40, though industrial deployment remains years away.

Nel is currently attending the Argus Europe Carbon Conference in Nice, running until 13 May, and will hold a workshop on green-iron certification the following day — a direct route to large-scale electrolysis sales. The real moment of truth, however, is 15 July, when the company releases its half-year results. By then, management will have had three more months to convert its pipeline of discussions into binding orders. The technology is ready. The question is whether the market is.