Ceres Power: electric vehicles and the path to profits

TL;DR

Hydrogen becomes financially viable for renewable energy at around $2/kg, and the shift to electric vehicles will likely lead to mass adoption by the end of the decade.

Transcript

hello today i have with me phil caldwell chief executive of fuel cell technology company series power hydrogen might be the uh the the energy supply of the of the future um but it's not cheap it's more expensive than fossil fuels at the moment at what point does hydrogen become financially viable it becomes financially viable today at about two dol... Read More

Key Insights

• 😒 Hydrogen becomes financially viable for renewable energy at around $2/kg, enabling its use as an energy supply for the future.
• 🥺 The transition to EVs is expected to lead to mass adoption driven by improved driving range and a potential stigma against combustion engine vehicles.
• 👨‍💼 Series Power experienced significant revenue growth from license fees, with an export-focused business model selling technology to global markets.
• 😌 The company's path to profitability lies in 2024, when royalties from mass production deals will contribute to 100% margin revenue.
• 🤨 Series Power raised £181 million for growth and expansion into hydrogen electrolysis, positioning itself in the emerging green hydrogen market.
• 🙂 The company's business model is asset-light, focusing on innovation and technology without the need for major capital investments.
• ✋ The capital raise aims to generate high-quality science and engineering jobs in the UK, showcasing the potential for growth in the energy sector.

Questions & Answers

Q: At what point does hydrogen become financially viable for renewable energy?

Hydrogen becomes financially viable at around $2/kg, which is when it can be generated from renewables instead of fossil fuels.

Q: Will the shift to electric vehicles lead to mass adoption by the end of the decade?

Yes, the CEO believes that EVs will reach a tipping point of mass adoption due to improved driving range, reduced range anxiety, and the potential stigmatization of combustion engine vehicles.

Q: What drove the increase in revenue for Series Power in 2020?

The revenue increase was primarily driven by license fees from companies like Bosch and Doosan, showcasing the success of Series Power's export of technology to global markets.

Q: What is the path to profitability for Series Power?

Series Power is currently in a growth phase, funding the business through license revenues and engineering services. Profitability is expected to be achieved in 2024 through royalties from mass production deals with major customers.

Summary & Key Takeaways

• Hydrogen becomes financially viable for renewable energy at $2/kg, making it a feasible energy supply for the future.

• The transition to electric vehicles (EVs) is expected to lead to mass adoption by the end of the decade, driven by improvements in battery range and infrastructure.

• Series Power experienced a 15% increase in revenue to £21.9 million in 2020, driven by license fees and the provision of technology hardware.