Nel ASA Shrinks Electrolyzer Costs and Footprint, Yet Order Book Keeps Shrinking

Nel ASA unveils cost-cutting electrolyzer and Samsung partnership, yet Q1 orders fall 24% and analysts stay neutral as stock rallies 78% YTD.

Norway’s Nel ASA has unveiled a new electrolyzer platform that cuts the price of a 25?MW green hydrogen plant below $1,450 per kilowatt — less than half the industry average — while a tie?up with Samsung E&A halves the required installation footprint. Yet for all the technological fanfare, the company’s order backlog contracted 24% in the first quarter to 1.1 billion Norwegian kroner, and analysts remain conspicuously unenthused.

The disconnect between engineering breakthroughs and commercial traction has been laid bare in the stock’s recent moves. Nel shares hit a 52?week high of €0.36 earlier this month before sliding back; on Tuesday they lost more than 5% in Oslo, with Tradegate showing a drop of as much as 7.2% to €0.33. At around €0.34 the stock has still gained roughly 78% year?to?date, nearly doubling from its mid?February trough, but the rally stalled at a resistance line around €0.35. Technical indicators such as the Chaikin Money Flow remain just positive, and the stochastic RSI flashed a fresh buy signal, suggesting the retreat may mark a healthy consolidation rather than a reversal.

The surge was triggered by two substantial developments. On 6 May Nel launched a new generation of electrolysers promising a step change in cost efficiency. Combined with the “CompassH2?A+” partnership with Samsung E&A, which reduces the necessary surface area by 50%, the offering tackles a chronic headache for developers: securing project financing. Samsung provides a full?system guarantee, a wrapper that could unlock bank loans for green?hydrogen plants that often struggle to get funded.

Mixed financial picture beneath the rally

Underpinning the optimism is a sobering set of first?quarter numbers. Revenue slipped 5% to 148 million kroner, while the operating loss stayed negative at 100 million kroner — an improvement on the prior year but still deep in the red. The order book shrank by almost a quarter, and although Nel holds 1.44 billion kroner in cash, giving it breathing room, the pipeline weakness is hard to ignore.

Berenberg analyst James Carmichael, one of the few covering the stock, retains a “neutral” rating and cut his price target to 2.30 Norwegian kroner. His reason: persistent order softness. No analyst currently recommends buying the shares, a stark contrast to the stock’s run?up.

Two technologies, two trajectories

Nel operates alkaline and PEM electrolysis lines, and they are moving in opposite directions. Alkaline posted a 6% revenue increase year?on?year and improved EBITDA by 35 million kroner. PEM, by contrast, saw sales drop 14% and EBITDA worsen by 16 million kroner. Management blamed cancelled or delayed US subsidy programmes — a structural drag, not a one?off.

Yet there are pockets of progress in PEM. Nel secured two contracts each worth roughly $7 million, one of them strategically important: the Douglas County Public Utility District in Washington state will buy its first Nel system. The plant, due to start up in the first half of 2027, will use surplus hydropower to stabilise the grid — a novel application for a public utility. Meanwhile, demand is rising for modular PEM units in the 2.5 to 50?MW range, which can be delivered in under twelve months, accelerating revenue recognition.

Long?term cost ambition and a defence angle

Nel’s most audacious goal is still on the drawing board. The company plans to build a prototype stack in 2026 for a next?generation PEM platform targeting a 70% reduction in stack costs. Another prototype is due later this year, with commercial launch pencilled in for 2028 or 2029. If industrialisation succeeds, capital and operating costs could fall sharply, but several years of development lie ahead.

A new source of demand is emerging from the defence and security sector, where decentralised hydrogen production is attracting growing interest — a market Nel has barely tapped so far.

EU grant and Q2 results as the next test

Nel expects to receive an €11 million EU grant in the second quarter, tied to the industrialisation of its Pressurised Alkaline platform — a welcome liquidity injection. The acid test, however, comes on 15 July, when the company reports half?year figures. The market will be watching whether the flurry of technology announcements and the Samsung partnership have begun to translate into binding orders. Until then, the stock is likely to remain volatile, caught between a compelling technology story and a stubbornly shrinking order book.