Volkswagen Group Buys Ballard Fuel Cell Patents For $80 Million

FEB 12 2015 BY MARK KANE 13

Audi A7 Sportback h-tron

Audi A7 Sportback h-tron

Ballard Power Systems, a well known hydrogen fuel cell technology developer, announced that it entered into a Technology Solutions transaction with Volkswagen Group for about $80 millionfor the transfer of certain automotive-related fuel cell intellectual property (IP) and a two-year extension of an engineering services contract“.

Volkswagen will use the IP and work with Ballard on new fuel cell cars, both from Volkswagen and Audi brands.

Who could’ve thought that anyone would be interested in buying fuel cell patents after Toyota announced that it would open its own portfolio for free? It seems that Ballard has something worth the price.

Transfer of Automotive-Related IP
Ballard will transfer the automotive-related portion of fuel cell IP assets previously acquired from United Technologies Corporation, in return for payments from Volkswagen Group totaling US$50 million, a majority of which is expected to be received at the closing of the transaction during the current quarter. The remainder is expected to be received in early 2016.

Ballard will retain a royalty-free license to utilize the IP transferred to Volkswagen Group in bus and non-automotive applications as well as for certain limited pre-commercial purposes in automotive applications.

Extension of Engineering Services Contract
The transaction also includes a 2-year extension, through March 2019, of the existing long-term engineering services agreement signed by Ballard and Volkswagen in 2013. This extension has an incremental value estimated at C$30-50 million (approximately US$24-40 million). Over the full 6-years, the contract has an estimated value of C$100-140 million (approximately US$80-112 million), and also includes a further optional 2-year extension.

Ballard’s ongoing engineering services contract with Volkswagen Group involves the design and manufacture of next-generation fuel cell stacks for use in the demonstration car program. Ballard engineers are leading critical areas of fuel cell product design – including the membrane electrode assembly (MEA), plate and stack components – along with certain testing and integration work.
Volkswagen Group’s commitment to, and progress in, fuel cell car development was underscored last November at the LA Auto Show, where fuel cell concept cars representing Volkswagen and Audi brand models were introduced: Golf SportWagen HyMotion, Passat HyMotion and Audi A7 Sportback h-tron quattro.”

Prof. Dr. Ulrich Hackenberg, Member of the Board of Management for Technical Development at AUDI AG and Coordinator of the Technical Development of all brands in the Volkswagen Group (recipient of longest title award, too) stated:

“Audi, VW and the Volkswagen Group are very pleased with the acquisition of a world-class automotive fuel cell patent portfolio. We believe that this portfolio, together with the combined fuel cell skills and expertise of our group and Ballard, will underpin our ability to play a leading role in fuel cell automotive development and commercialization.”

Randy MacEwen, Ballard President and CEO commented:

“This transaction extends and deepens our relationship with the Volkswagen Group, a leading global automotive manufacturer. The IP transfer surfaces significant value for Ballard. And, extension of the engineering services contract reflects a growing positive sentiment toward fuel cells within the automotive sector, along with the outstanding progress made to date in our work with Volkswagen Group on its fuel cell car programs.”

“Ballard’s Technology Solutions group is helping customers accelerate fuel cell development through the application of our world-class, customized engineering services capability, along with access to our deep IP portfolio and related know-how. This transaction with Volkswagen marks a milestone in the growth and delivery of Ballard Technology Solutions.”

Hat tip to ffbj!

Categories: Audi, Porsche, Volkswagen

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13 Comments on "Volkswagen Group Buys Ballard Fuel Cell Patents For $80 Million"

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I knew VW was not committed to the electric car. What I don’t understand is why would VW spend $80 million for something that Toyota said they would give away for free. It is either, Toyota fuel cell patents are not good or they are not free.

There are many different types of hydrogen fuel cells. No single company has all the patents, that cover everything.

Many of us see hydrogen for what it really is, a boondoggle. However, I caution you to take the idea seriously and educate the ignorant about the pitfalls. There’s millions being spent on the technology and I fear the politicians, lobbyists, oil companies and car companies may have some success in forcing FCVs onto the American stage and sending the U.S. in the wrong direction all over again; just as we have been for the last 100 plus years stuck using hydrocarbon fuels

There are still non-automotive applications. For Germany grid storage comes to mind. Some people are still holding on to the idea that FCV might work in busses and trucks. I like batteries instead of FC.

When you say truck i assume you mean a 40t truck? A battery in a city bus might work, since it drives slow (20-30mph) and a short distance (not more than ~200 miles a day). Trucks are different. I don’t know how it is in USA, but in Germany they drive 8-10 hours with only two small brakes (15 minutes, 30 minutes). At truck speed limit of 80 km/h (50mph), this means they drive ~720km (450mi) a day. The best trucks consume around 25 l/100km (9,5mpg) diesel. Because driving at constant speed is the optimal use case, you can assume the efficiency of this scenario should reach 40%. Diesel has 10,75 kWh/l. That means for driving 720km the truck needs 10,75*25*7,2 = 1935kWh. Assuming a battery and a electric motor has 95% efficiency compared to 40% diesel efficiency you need to store 1935*0,4/0,95 = 815kWh. That is roughly 9 times the battery of the model S. I don’t know what the battery of the Model S weights but i read numbers between 400-600kg. This would mean around 4,5 t added weight only for the battery. That is 4,5t less of goods that you can transport. Thats a lot. I don’t… Read more »

You save some weight from the diesel motor, transmission and all surrounding auxiliary need to make them work, pump, fuel tanks, radiator and compressor removal.
Diesel engine are notoriously heavy.
All in all, for a truck, the weight might not be so different even with an (actual) 5 tons battery!

The Hydrogen Lobby has its filthy tentacles everywhere…

Hydrogen fuel cells were around for years but these companies didn’t see it necessary to promote them until they realize the electric car is taking off. They know we will have an alternative to fossil fuel. They want to have a say in what that alternative will be. These suppliers are not interested in cleaning up the environment. They are interested in controlling America’s energy supply. They have little control if people charge there vehicles at home (in some cases from solar energy). They need us to continue going to the service station. We were fooled once before. We will not be fooled this time!

I woudn’t give too much importance to this purchase. It probably means VW group wants to keep its options open. USD 80M is not that much for such a group.

+1

Simply a good business move at this point to make sure they don’t get cornered. Every car manufacturer save Tesla has something (large or small) going on with FCV. It would be silly of a company the size of VAG to completely ignore that.

VW are not keeping their options open, they would like to create another option. The electric car is much more fuel-efficient than the hydrogen fuel cell vehicle and we will let the world know that. Toyota and VW will not confuse the issue. We will not let that happen. Creating hydrogen is a waste of energy. Long live the electric car!

Good Lord!

This was a big deal for Ballard Power share holders, as the stock jumped 57% in one day.
I think VW is essentially covering all the bases. They had the cash, the stock was cheap, so, in essence, the purchase price was a big win for them. In other words you buy a company and the next day it is worth almost 60% more.
That is not a bad business decision, even though the near term viability of FCV is doubtful.