Nel ASA’s €135 Million EU Bet on a New Electrolyser Generation

Nel ASA launches new alkaline electrolyser targeting under $1,450/kW, but Q1 orders collapse 73% and stock drops 5%. EU backs €135M grant for production ramp-up.

The Norwegian hydrogen equipment maker Nel ASA has unveiled a new pressurised alkaline electrolyser platform after eight years of development, promising to slash the cost of green hydrogen production. The company targets a price of under $1,450 per kilowatt for large-scale installations, a dramatic reduction from the current industry benchmark of around $3,000 per kilowatt. Yet the market reaction was swift and negative: the stock dropped nearly 5% to €0.27 on the day of the announcement, as investors focused on a deteriorating order book rather than the long-term promise.

The new modular system is designed to be manufactured entirely in the factory and installed outdoors, eliminating the need for expensive buildings and on-site construction work. Management estimates this approach will cut capital expenditure by 40% to 60%. CEO Håkon Volldal sees this as a game-changer for project financing, arguing that customers can now move faster with less upfront capital. Sales chief Todd Cartwright added that investors are increasingly demanding assets that are easier to fund.

Brussels is backing the ramp-up in a big way. The EU Innovation Fund will cover up to 60% of the costs for Nel’s new production facility in Herøya, Norway, with a maximum grant of €135 million. The first tranche of €10 million is expected shortly. The factory will initially have capacity for one gigawatt per year, with plans to expand to four gigawatts.

But the near-term picture is far less rosy. Nel’s first-quarter 2026 revenue slipped 5% to 148 million Norwegian kroner, while EBITDA remained deep in the red at minus 100 million kroner — though that was a 15 million improvement on the year-ago period. More alarming was the 73% collapse in new orders to just 85 million kroner, and the order backlog shrank 24% to 1.11 billion kroner. The company’s liquidity stands at around 1.4 billion kroner, which management says is sufficient until the end of 2026.

The stock’s recent rally — still up roughly 40% over 30 days and about 41% above its 200-day moving average — has been driven less by Nel’s own performance than by sector-wide momentum. US fuel cell specialist Bloom Energy ignited the hydrogen space after reporting a doubling in first-quarter revenue to $751 million, fuelled by AI data centre power demand. ITM Power and Plug Power also caught the tailwind. Nel hit a 52-week high of €0.32 in early May before pulling back.

Amid the turbulence, board chairman Arvid Moss sent a rare signal of confidence. Two days after the weak quarterly numbers, he bought 100,000 Nel shares at an average price of 2.25 kroner, when the stock had fallen to 2.20 kroner. Insider purchases at such moments are typically interpreted as a bet on the company’s long-term prospects.

There have been some post-quarter bright spots. Nel secured two orders for its PEM electrolyser business, each worth around $7 million. One came from the Douglas County Public Utility District in Washington state, which plans to produce green hydrogen from hydropower — the first time Nel has sold to a public utility. Commissioning is scheduled for the first half of 2027. The company is also developing a new PEM platform that it claims will cut stack costs by 70%.

Analysts remain unimpressed. Berenberg’s James Carmichael maintained his neutral rating but cut his price target from 2.60 to 2.30 kroner, citing the persistent weakness in orders. Not a single analyst covering Nel currently recommends buying the stock. The company will release its half-year results on July 15, and the market will be watching closely to see whether the May product launch translates into actual orders — and whether the order intake can finally reverse its downward trajectory.