Nel ASA's Alkaline Milestone Meets a Market That's Not Buying Yet

Nel ASA's new pressurised alkaline electrolyser cuts costs 40-60%, but Q1 orders collapse 73% YoY; analysts unanimously rate sell, stock RSI at 15.6.

Nel ASA has spent eight years developing its new pressurised alkaline electrolyser, achieved cost reductions of 40 to 60 percent against current market solutions, and secured up to 135 million euros in EU support for its Herøya production line. Yet when the platform went commercial in May 2026, the market barely blinked. The reason is brutally simple: orders have dried up.

First-quarter order intake collapsed by 73 percent year-on-year to just 85 million Norwegian kroner. The order backlog shrank 24 percent to 1.113 billion kroner. Management itself concedes that the current book of business is insufficient to keep the factory running at decent utilisation in 2027. The new alkaline platform can cut system costs dramatically and scale from 1 GW to 4 GW of annual capacity, but none of that matters without customers.

The competitive noise is getting louder. Two weeks after Nel's product launch, Danish rival Stiesdal Hydrogen unveiled a 6.5-MW electrolyser that it claims will push system costs below 500 euros per kilowatt — well under the European market average. That puts immediate pricing pressure on Nel's brand-new offering. Meanwhile, the company's PEM division is bleeding: revenues fell 14 percent and EBITDA worsened by 16 million kroner, partly because expected US grant money has been frozen since late 2024. Nel's next-generation modular PEM platform, targeting a 70 percent cost reduction at stack level, won't reach commercial stage until 2028 or 2029.

Financially, the quarter showed modest progress. Revenue came in at 148 million kroner, down 5 percent from a year ago, but the EBITDA loss narrowed to 100 million from 115 million. The net loss shrank from 179 million to 144 million kroner, helped by a 26 percent headcount reduction from the peak — the workforce now stands at around 300. Cash on hand is a comfortable 1.44 billion kroner, giving Nel some breathing room. Yet the management warns that the job cuts have damaged manufacturing and project execution capacity; if demand returns quickly, scaling up won't be easy.

Analysts are unimpressed. None rates the stock a buy, seven recommend selling, and the average price target sits at 2.12 kroner, with the lowest at just 1.00 krone. In euro terms, Nel shares changed hands at around 0.28-0.29 euro — roughly 51 percent above the start of 2026 but still 8-11 percent below the 52-week high set in May. The relative strength index has plunged to 15.6, a deeply oversold reading that some technical traders might interpret as a contrarian signal, but the fundamental case remains hobbled by the order vacuum.

There were glimmers of activity after the quarter closed: a $7 million order for PEM containerised units in the US and a separate Q2 contract worth about 70 million kroner. Management expects more final investment decisions in 2026 than in the prior year and points to growing momentum for 2027 and 2028, while also touting defence and security applications as a new demand driver. But the credibility of that recovery storyline hinges entirely on whether Nel can land large-scale orders for its new alkaline platform. CEO Håkon Volldal's half-year report on 15 July will be the first real test — and the market will be watching for proof that the technology breakthrough can finally translate into commercial traction.