Nel ASA’s €135 Million EU Lifeline Can’t Mask the 73% Order Wipeout

Nel ASA launches next-gen alkaline electrolyser with EU funding, but Q1 orders collapse 73% and shares drop 12% as analysts remain bearish.

The numbers tell two starkly different stories at Nel ASA this week. On one hand, the Norwegian electrolyser specialist has just unveiled a next-generation pressurised alkaline system it claims will slash capital costs by 40 to 60 percent — a breakthrough backed by up to €135 million from the EU Innovation Fund. On the other, the company’s first-quarter figures reveal an order intake that has collapsed by 73 percent year-on-year to just 85 million Norwegian kroner. The market’s verdict was swift: shares tumbled as much as 12 percent on Wednesday, wiping out a chunk of the 45 percent rally that had built since the start of 2026.

The new platform, eight years in development, operates at 15 bar of pressure, eliminating the need for downstream compression in many industrial setups. Nel plans to scale production at its Herøya facility from an initial 1 GW of annual capacity to as much as 4 GW, with the EU grant covering up to 60 percent of eligible industrialisation costs. The first tranche of that funding is expected to land in the current quarter. CEO Håkon Volldal is betting the technology will reset the benchmark in a market where total system costs often exceed $3,000 per kilowatt.

But the product launch arrives at a delicate moment. Revenue from customer contracts slipped to 148 million kroner in the first quarter, while the order backlog contracted 24 percent to 1.1 billion kroner. The operating loss narrowed only marginally to minus 100 million kroner, and the net loss came in at 144 million kroner — an improvement on the year-ago period, but still deep in the red. Nel has trimmed roughly a quarter of its workforce to stabilise costs, and management is now reviewing the book value of two idled atmospheric production lines at Herøya, a move that could trigger further impairment charges.

The company’s cash position of 1.4 billion kroner provides a cushion through the end of 2026, according to the board. Yet the order drought raises questions about whether the new technology can convert interest into revenue fast enough. Volldal says he is in active discussions with multiple potential customers for projects ranging from 50 to 150 MW in Europe and North America, with firm contracts expected to materialise in the second half of the year.

There were glimmers of hope from Nel’s PEM division. Shortly after the quarter closed, the unit secured two contracts worth roughly $7 million each — one from Mesure Process for a European hydrogen project, and another from the Douglas County Public Utility District in Washington state, which plans to use the electrolysers for grid stabilisation powered by surplus hydropower. Nel aims to launch a new PEM platform by 2029 that it says will cut costs by 70 percent.

The analyst community remains unconvinced. None of the twelve analysts covering Nel rate the stock a buy; the majority recommend selling, with a consensus price target of 2.13 Norwegian kroner — well below the current trading level. The shares had touched a 52-week high just a day before the launch, only to give back much of that ground on Wednesday.

All eyes now turn to July 15, when Nel reports its half-year results. By then, management will need to show that the new alkaline system can do what the old one could not: turn conversations into contracts.