Nel ASA's Hydrogen Rally Stalls as Orders Plunge and US Tax Credit Hangs in the Balance

Nel ASA stock drops 6% amid 73% plunge in Q1 order intake and looming end of US hydrogen tax credit, despite European policy support.

Nel ASA’s share price took a sharp turn lower on Thursday, shedding 6.04% to trade at €0.30 and extending its seven-day slide to 14.72%. The pullback comes on the heels of a powerful rally that had lifted the stock 54.15% since the start of 2026, but fresh catalysts are proving elusive. Investors are recalibrating just how much the hydrogen story is worth when large-scale follow-on orders remain conspicuously absent.

From the recent high of €0.37, the equity has now retreated 19.15%. The correction has trimmed the rally’s momentum but has not erased it entirely — the stock still trades 16.35% above its 50-day moving average and nearly 40% above the 200-day line. Yet the relative strength index has eased to 49.4, suggesting neither overbought nor oversold conditions but reflecting a market that has lost its directional conviction.

Order book sends a stark warning

The fundamental picture leaves little room for optimism in the near term. Nel’s first-quarter revenue from customer contracts stood at 148 million Norwegian kroner, down 5% year-on-year, with total revenue including other income reaching 152 million kroner. Operational losses narrowed — EBITDA improved from -115 million to -100 million kroner — but the company remains firmly in the red.

The real concern lies in the order intake. New bookings totalled just 85 million kroner in Q1, a collapse of 73% from the prior-year period. The order backlog, at 1.113 billion kroner, fell 24% compared with the same quarter in 2025 and 16% from the previous quarter. Nel ended the period with 1.443 billion kroner in cash, providing a buffer, but the pipeline is too thin to secure meaningful capacity utilisation for 2027, according to management.

A small bright spot emerged after the quarter closed: Nel secured a $7 million order for PEM electrolyser equipment from Douglas County Public Utility District in East Wenatchee, Washington, scheduled for commissioning in the first half of 2027. But that single order does little to compensate for the broader drought.

Washington darkens the outlook

That US order now carries added political risk. President Trump’s “One Big Beautiful Bill Act” would terminate the Section 45V tax credit for clean hydrogen production after 2026, a provision that has underpinned project economics across the sector. A possible grandfathering clause would protect facilities that commence construction before the law takes effect and reach commercial operation by the end of 2027, but the uncertainty is already weighing on sentiment.

For Nel, the Douglas County deal is symbolic as well as financial — it marks the first time a US public utility will own and operate a Nel electrolyser system. That kind of demand could be vulnerable if the subsidy disappears. With the US market accounting for a growing share of Nel’s pipeline, the political headwind adds a layer of complexity that the stock’s recent rally had largely ignored.

Europe steps up as a counterweight

While Washington creates headwinds, Nel is leaning heavily into Europe. The centrepiece of its strategy is the Herøya gigawatt factory in Norway. A final investment decision was taken in December 2025, and capacity is being ramped initially to 1 GW per year, with a medium-term target of 4 GW. The EU Innovation Fund supports the buildout with up to €135 million, covering as much as 60% of eligible costs.

Nel has also deepened its partnership with Samsung E&A, its largest shareholder. At the World Hydrogen Summit in Rotterdam, the two companies unveiled CompassH2-A+, a 100-MW electrolyser configuration that combines Nel’s pressurised alkaline technology with a unified performance guarantee. Samsung brings EPC expertise for downstream applications such as green ammonia, e-methanol and sustainable aviation fuel. For project developers, that bundling reduces execution risk — a critical factor when trying to secure bank financing.

The commercial launch of Nel’s new alkaline platform in May 2026, after more than eight years of development and industrial-scale testing at Herøya, is another pillar of the European push. Nel promises total installed costs of under $1,450 per kilowatt for a 25-MW plant, representing a 40–60% reduction versus standard systems. That cost advantage, if confirmed in real projects, could help rebuild the order book.

A market waiting for proof

Technical indicators underscore the current indecision. The 30-day annualised volatility stands at 98.21%, explaining the violent swings and making short-term directional bets treacherous. The stock remains 39.93% above its 200-day average, but the RSI has slipped to neutral territory, suggesting the bullish momentum that drove the rally has stalled.

Nel’s balance sheet provides a cushion — 1.44 billion kroner in cash, plus the EU grant facility — and the workforce has been trimmed 26% from its peak to around 300 employees, reducing the cost base. The company expects to receive an €11 million EU disbursement in the second quarter to further industrialise its alkaline platform.

The next major inflection point is the half-year report on 15 July. By then, markets will want to see whether the Samsung partnership and the CompassH2-A+ offering are translating into binding orders. If the order book remains thin, the stock’s strong year-to-date advance will rest on an increasingly shaky foundation.