Nel ASA’s €135 Million EU Bet Faces Its First Real Test on May 6

Nel ASA debuts its next-generation pressurized alkaline electrolyser prototype, but a 73% drop in orders and a 'Sell' consensus highlight the gap between market hype and financial reality.

After eight years of development, Nel ASA is finally putting steel in the ground — not just slides on a screen. The Norwegian hydrogen equipment maker will unveil a fully operational prototype of its next-generation pressurized alkaline electrolyser at its Herøya facility tomorrow, marking what CEO Håkon Volldal calls a “milestone for the entire electrolyser segment.”

The market has already priced in the excitement. Nel’s shares touched a fresh 52-week high of €0.32 today, extending a seven-day rally of roughly 43% and pushing year-to-date gains past 65%. At €0.31, the stock has more than doubled from its lows — but the euphoria masks a far messier reality beneath the surface.

The Numbers That Don’t Lie

Nel’s first-quarter results paint a picture of a company in transition — and not a comfortable one. New order intake cratered 73% year-on-year to just 85 million Norwegian kroner, while the order backlog shrank 24%. Revenue from customer contracts slipped 5%, and EBITDA remained deeply negative at minus 100 million kroner, though that marked a modest 15 million kroner improvement from a year earlier. The net loss narrowed to 144 million kroner from 179 million.

The company has cut roughly a quarter of its workforce to shore up costs, and the balance sheet offers some breathing room: 1.4 billion kroner in cash and equivalents. But the central question looming over tomorrow’s launch is whether technology can be converted into orders — and fast.

What the New Platform Promises

The new electrolyser is built around a modular, factory-tested skid design that Nel says can slash capital costs by 40% to 60% compared with its existing technology, with operating costs falling 10% to 20%. Because the system is designed for outdoor installation, it eliminates the need for dedicated buildings — a significant saving on engineering and site preparation.

Nel has taken a final investment decision to build 1 gigawatt of production capacity at Herøya, with the first 500 megawatts expected to be operational by the end of 2026. The total investment runs to roughly 300 million kroner before grants, with the bulk of spending falling in 2026 and 2027. Longer term, the company targets 4 GW of annual production capacity.

The European Union is backing the play. Nel expects an initial tranche of roughly €11 million from the Innovation Fund in the second quarter, part of a total package that could reach €135 million — directly tied to industrializing the new alkaline platform.

A Chairman’s Bet Against the Street

One striking signal came from Nel’s board chairman, Arvid Moss, who bought 100,000 shares at 2.25 kroner each — a vote of confidence despite the net loss. The analyst community isn’t buying it. The consensus price target sits at 2.14 kroner, below the current trading level, and the average recommendation is “Sell.”

The disconnect is glaring. Nel’s stock has surged on narrative and hope — the Bloom Energy effect that lifted the entire hydrogen sector, plus anticipation of tomorrow’s reveal. But the underlying business metrics are contracting, and the path to commercialization remains uncertain.

The PEM Wild Card

While all eyes are on the alkaline platform, Nel is also advancing its PEM technology. Two recent orders worth roughly $7 million each went to the PEM division, and another prototype is due for completion this year. The commercial launch of that platform is penciled in for 2028 or 2029.

There’s a potential overhang: the two 500 MW production lines for atmospheric electrolysers currently idle at Herøya may need to be written down, creating a yet-unspecified hit to near-term earnings.

What Comes Next

Volldal says Nel is already in close talks with multiple customers for deliveries following the launch, targeting projects in the 50 to 150 MW range in Europe and North America. Whether those discussions turn into binding orders — and whether the company can deliver on its promise of first major shipments by 2027 — will determine whether the stock’s rally has legs.

The next few weeks will be telling. Nel’s platform launch is the most immediate test, but SunHydrogen reports on May 7, and ITM Power faces a UK government funding decision in June that could reshape the competitive landscape. Across the sector, the same tension plays out: share prices have already priced in the future. Now the companies have to deliver.