Firm Warns Investors to Avoid Fuel Cell Lure

Foster Bryan, an independent market analysis firm, issued a warning today for investors to avoid being lured into the fuel cell market by some research firms’ predictions that the fuel cell market will reach US$1 billion in shipments by 2005.

Atlanta, Georgia – August 5, 2003 [] In its 85-page Report on Fuel Cell Technology, Industry, Applications and Demand, Foster Bryan predicts shipments of fuel cell systems by 2005 will only be about US$100 million. “Our conclusion is that unless the US, Japanese or other federal government steps in with a huge subsidy, and none is pending at present, there is frankly no way the fuel cell industry will approach anywhere near the value of shipments being touted by some so-called independent market analysis firms,” said James Throckmorton, Managing Director of Foster Bryan. Foster Bryan’s researchers contend that the popular belief that hydrogen driven electric or hybrid electric autos powered by fuel cells will be produced en masse in the immediate future is pure myth. “There are simply too many problems in cost and implementation for autos to adopt fuel cells before about 2010, if then,” Throckmorton said. “There are one or two companies that will have fuel cell products for portable electronics on the market next year, but equipping an auto with a fuel cell is a significantly more complex task.” The report notes that the sales of fuel cell systems were US$75 million in 2002. According to the report, forecast growth rates for 2003 and beyond include approximately 10 percent growth for the next three years. According to the Foster Bryan report: -The fuel cell industry is far from the commercialization stage, because high prices, lack of field experience and difficulties with producing reliable products have hampered adoption of the technology. The report cites that some companies are shipping products but not at a commercially competitive price -None of the small-cap companies in the industry is making a profit; and at most, only one or two will make a profit soon. -The market is currently being driven by research and development investments and contracts from automobile makers, among others, and subsidies and grants from national and state governments. Were it not for these sources, most fuel cell companies would be out of business. -Constraining the market are acquisition prices per kW that range from three to 100 times alternatives. -The cost of maintaining and operating fuel cells is largely unknown. “A fuel cell in every car?” mused Throckmorton. “A fuel cell in every community? A fuel cell in every laptop and portable tool? This scenario is at least feasible in the future. Fuel cells are breakthrough technology. Their day will come. Not soon, though.”