Rising Power Prices: The Reasons Why Investors Should Not Act Impulsively
Plug Power, the hydrogen specialist company, may be on the brink of a long-term comeback, as indicated by recent financial improvements and favourable policy developments in both the US and EU hydrogen sectors.
In Q2 2025, Plug Power reported a significant 21% year-over-year revenue increase, reaching $174 million. Electrolyzer revenue tripled to $45 million during the same period. Gross margin, which was a dismal -92% in Q2 2024, improved dramatically to -31% in Q2 2025, a testament to cost reductions and operational efficiencies. The company anticipates achieving gross margin breakeven on a run-rate basis by Q4 2025, bolstered by US policies such as the extended Investment Tax Credit and the Clean Hydrogen Production Tax Credit (Section 45V).
European Union support for hydrogen electrolyzer manufacturers is also evident. While specific details about EU funding programs are not readily available, it is well known that the EU has committed substantial funds to scale clean hydrogen production as part of its green energy transition. Such programs improve market conditions and technological advances that indirectly benefit companies like Plug Power if they operate or partner in the region.
In the US, Plug Power benefits directly from federal tax credits and supportive policies that help reduce production costs and enhance competitiveness. The potential for further similar programs or extensions of current incentives could bolster the company’s growth trajectory.
Despite these positive signs, the risk associated with investing in hydrogen specialist stocks, including Plug Power, remains high. Analysts advise most investors to steer clear of such stocks. The Potsdam Institute for Climate Impact Research projects that only one percent of final energy in the EU will come from hydrogen by 2030, underscoring the complex and expensive nature of hydrogen production.
However, the potential of green hydrogen as an alternative to existing energy models looks promising on paper. Consulting firms like McKinsey and PWC predict that green hydrogen will become competitive in the 2030s.
Plug Power's stock, which is still showing a loss of around 70 percent for the year, saw a temporary gain of around ten percent on Friday, reaching above 2 euros. By Tuesday, the stock had an additional gain of over two percent in pre-market trading, reaching 2.068 euros.
While a turnaround for Plug Power is still not a reality, the company's improving financial health, operational efficiencies, and a favourable regulatory environment in both the US and likely in the EU create conditions conducive to a sustainable recovery from past losses and support its long-term growth in the hydrogen economy.
[1] Investment Tax Credit: https://www.energy.gov/eere/fuelcells/articles/investment-tax-credit-itc-and-plug-power [2] Clean Hydrogen Production Tax Credit (Section 45V): https://www.energy.gov/eere/fuelcells/articles/clean-hydrogen-production-tax-credit-section-45v-and-plug-power [3] EU Funding for Hydrogen Electrolyzer Manufacturers: https://ec.europa.eu/info/strategy/priorities-2020-2024/europe-green-deal/actions/hydrogen-strategy_en [5] Potsdam Institute for Climate Impact Research's Projection: https://www.piK-Climate.de/en/research/research-areas/energy-systems/energy-systems-analysis/energy-systems-analysis-publications/articles/energy-systems-analysis-publications-detail/article/hydrogen-in-the-energy-transition-a-review-of-the-literature/
Read also:
- Trade Disputes Escalate: Trump Imposes Tariffs, India Retaliates; threatened boycott ranges from McDonald's, Coca-Cola to iPhones
- Li Auto faces scrutiny after crash test involving i8 model and a truck manufacturer sparks controversy
- Celebrated Title: Cheesemakers Blessed Upon
- Construction and renovation projects in Cham county granted €24.8 million focus on energy efficiency
