Nel ASA’s 56% Stock Surge Masks a 73% Order Freefall as EU Grant Fuels Electrolyser Scale-Up

Nel ASA shares rally on new alkaline electrolyser promise, but Q1 orders collapse 73% and operating loss widens. Analysts cautious; half-year results on July 15 key.

The Norwegian hydrogen specialist Nel ASA has delivered a startling disconnect in recent weeks: its shares have rocketed 56% year-to-date – including a 42% surge over the past month alone – to close at €0.30, comfortably above its 200-day moving average. Yet behind that rally lies a business reality that has analysts reaching for the red pen. Orders in the first quarter plunged 73% to just 85 million Norwegian kroner, sending the total order backlog down by roughly a quarter. Investors are betting on a technological leap; the market is demanding proof that the leap will translate into revenue.

That bet centres on Nel’s new alkaline pressure electrolysis system, unveiled in May after eight years of development. The platform operates at 15 bar, eliminating the need for downstream compression, and cuts energy consumption to below 50 kilowatt-hours per kilogram of hydrogen. Nel targets turnkey costs of under $1,450 per kilowatt for a 25-megawatt installation – less than half the cost of typical industrial projects today. The company claims customers can reduce their capital expenditure by up to 60%.

To scale up this technology, Nel is industrialising the platform at its Herøya facility in Norway, backed by up to €135 million from the European Union’s Innovation Fund. An initial tranche of €10 million is expected in the second quarter. Nel is ploughing around 300 million Norwegian kroner into the site, with the first 500 megawatts of annual capacity targeted by the end of this year. The longer-term ambition is a 4-gigawatt production run rate.

Operationally, though, the numbers remain painful. Revenue edged down to 148 million kroner, and the operating loss widened to minus 100 million kroner. The company has cut more than a quarter of its workforce to improve its cost structure. Nel holds roughly 1.4 billion kroner in cash, which management says is sufficient to see it through to the end of 2026.

One bright spot came from the US: a public utility in Washington state placed Nel’s first commercial order for its PEM technology. The equipment is scheduled for commissioning in the first half of 2027 and will use surplus hydropower for grid stabilisation. Management is also in active discussions for further deliveries in Europe and North America.

Analysts remain deeply cautious. Berenberg recently cut its price target to 2.30 Norwegian kroner, citing weak order intake. The consensus target stands at just 2.14 kroner – well below the current share price of around 3.20 kroner (€0.30). The optimism at the bourse seems to hinge on a belief that the new electrolyser’s cost advantage will eventually unlock demand, particularly from the defence and energy security sectors, which Nel reports are showing rising interest.

All this will be put to the test on 15 July, when Nel publishes its half-year results. CEO Håkon Volldal will need to demonstrate that the customer conversations around large-scale projects are hardening into binding contracts. Until then, the stock’s rally rests on promise rather than performance – and the gap between the two has rarely been wider.