Nel ASA’s New Alkaline Platform Faces a Pivotal Test as Defence Pivot Gains Traction

Nel ASA's stock rallies 26% despite a 73% order intake drop, as investors bet on its next-gen alkaline electrolyser and strategic shift toward military and decentralized energy markets.

The disconnect between Nel ASA’s shrinking order book and its surging share price has rarely been more pronounced. While the Norwegian hydrogen specialist’s operating metrics tell a story of contraction, the market is betting on a strategic reinvention that centres on energy security and military applications. The stock has rallied nearly 26% over the past 30 days, trading at €0.24 — just shy of its 52-week high.

That optimism will face its sternest examination on 6 May, when Nel unveils a next-generation pressurised alkaline electrolyser platform. The company claims the new system will slash capital expenditure by 40% to 60% while cutting operating costs by 10% to 20%. Perhaps more striking is the promise of an 80% reduction in physical footprint — a leap that could reshape the economics of green hydrogen production for defence and decentralised infrastructure projects.

Mixed Q1 Numbers Mask Deeper Challenges

Nel’s first-quarter 2026 results were a study in contrasts. Revenue from customer contracts slipped 5% year-on-year to NOK 148 million, while EBITDA improved to minus NOK 100 million — a NOK 15 million narrowing from the prior-year period. The net loss shrank to NOK 144 million from NOK 179 million, reflecting a cost-cutting drive that has reduced headcount by roughly a quarter.

Yet the top-line strain is unmistakable. Order intake collapsed 73% to just NOK 85 million, dragging the total order backlog down 24% to NOK 1.1 billion. The sales pipeline has become the company’s most acute vulnerability, and the new platform is designed to address precisely that weakness.

Geopolitics Opens a New Front

CEO Håkon Volldal has been unambiguous about the strategic pivot. “We need to rethink our energy system entirely,” he said, positioning green hydrogen as a cornerstone of crisis-resilient, decentralised power grids — explicitly including military applications. The disruption of shipping through the Strait of Hormuz has rattled global LNG markets, prompting governments and industries to seek alternatives. Nel intends to be the supplier of choice for that shift.

The defence angle is resonating with investors. Volldal’s push into energy security narratives has given the stock a thematic tailwind that its quarterly numbers alone could not justify. But the strategy remains untested in terms of hard commercial wins.

PEM Pipeline Offers Some Breathing Room

While the alkaline division has provided steady, moderate growth, it is the PEM (proton exchange membrane) business that has delivered the most tangible near-term news. After the quarter closed, Nel’s US subsidiary secured a USD 7 million order for containerised electrolysers destined for a European project. The units will supply hydrogen to refuelling stations and industrial customers from 2027.

Volldal signalled that more deals are in the pipeline. “The first quarter was quiet on order intake, but the momentum in PEM continues — we expect several more contracts before the end of the first half,” he said. That would provide a welcome buffer as the company awaits the commercial impact of its new alkaline platform.

The Cost of Ambition

Developing the new generation of electrolysers is not cheap. Nel is spending approximately NOK 300 million on the upgrade, though EU grants of up to EUR 135 million are expected to cover roughly 60% of eligible costs. The financial support underscores the strategic importance Brussels attaches to homegrown electrolyser technology, even as competition from Chinese manufacturers intensifies.

The 6 May launch is therefore more than a product reveal — it is a credibility test. The stock has already priced in a successful transition. Now Nel must prove that its technology can win orders fast enough to stabilise the shrinking backlog. If the platform delivers on its cost and footprint promises, the current rally will have a solid foundation. If not, the gap between market hopes and operational reality will become impossible to ignore.