Nel ASA's €135 Million EU Grant Fuels Expansion, But Orders Tell a Different Story

Nel ASA secures €135M EU grant for green hydrogen cost cuts, but orders plummet 73% and stock falls 17%, highlighting a stark gap between expansion plans and market demand.

The Norwegian electrolyser specialist Nel ASA is charging ahead with a massive industrialisation drive at its Herøya plant, backed by up to €135 million from the European Union’s Innovation Fund. That three-digit million sum is meant to slash the cost of green hydrogen production and push system costs below $1,450 per kilowatt for large-scale projects. But on the ground, the market is delivering a very different message.

Orders for the company’s equipment have collapsed. The order intake in the latest reporting period plummeted by 73%, a drop that sent a shockwave through the stock. Within seven days, the share price lost roughly 17%, falling from a 52-week high of €0.37 set in late May to current levels around €0.29–€0.30. Even after that correction, the stock remains about 51% above its level at the start of the year, though the recent rally has clearly lost momentum.

The technical picture offers little comfort. The relative strength index sits at 47.6, neutral territory, while the annualised 30-day volatility runs at nearly 100%. That kind of reading means violent swings in either direction can materialise quickly. The share is still trading comfortably above its 200-day moving average, suggesting the medium-term uptrend has not broken, but investor patience is wearing thin as large follow-on orders fail to materialise.

Nel’s performance in the first quarter did little to reassure. Revenue came in at 148 million Norwegian kroner, a decline of roughly 5% year-on-year. The loss per share narrowed from ?0.10 NOK to ?0.08 NOK, a marginal improvement that falls well short of a turnaround. The company has streamlined its structure by spinning off its fuelling station business, now listed separately as Cavendish Hydrogen, in which Nel retains a stake of just under 5%. The remaining entity is a pure-play electrolyser specialist.

Much of the market’s frustration centres on the new pressurised alkaline platform that Nel launched with much fanfare. The technology was supposed to redefine cost efficiency for green hydrogen, but the expected surge in demand after the unveiling never arrived. The industrialisation roadmap at Herøya targets an initial capacity of one gigawatt per year, with the potential to scale to four gigawatts depending on demand. The EU grant covers a large portion of eligible industrialisation costs, but converting that capacity into binding orders remains the critical missing piece.

All eyes now turn to July 15, 2026, when Nel releases preliminary figures for the second quarter. That data point will reveal whether the 73% drop in orders was a one-off aberration or a symptom of deeper delays in ramping up the new production lines. Until then, the stock is caught between a bold expansion narrative and a sobering commercial reality.