Fuel Cells

Anadrol 50 · #1 03-20-2004, 11:13 PM

These are the wave of the future....

Besides GM, what public companies are involved in this business...

I am taking my profits from OSTK and buying GM, I akso want to buy another non-auto company that is involed in fc.

MaxPower · #2 03-22-2004, 04:03 PM

I believe United Technologies is involved in Fuel Cells. The problem is that the company is so large, that it is unlikely that the Fuel Cell business will have a large effect on its bottom line.

There a lot of small companies that are in the fuel cell business. I looked into some of these a few years ago at the request of my father. I decided not to invest anything in them, which has turned out to be a smart decision so far. One is Fuel Cell Energy (FCEL) and another is Ballard Power Systems (BLDP). They are not in great financial shape. Sales are not skyrocketing and profits and they are along way from being profitible.

While fuel cells will certainly be a part of our future, I am not convinced that they will be as big a part as some are suggesting. I am also not convinced that now is the time to be investing in them. Its too risky.

Boris · #3 03-23-2004, 03:26 AM

I would be wary of investing in a company based on their fuel cell technology. I'm coming at this from the venture capital perspective and I can tell you that there has been literally billions of dollars invested in promising fuel cell technologies. And yet where is the technology today? The only place fuel cells are economically viable are in some parts of Japan where electricity costs are very high. I've attended several seminars on fuel cell technologies and most of the experts agree that there will have to be a major technology breakthrough for fuel cells to makes sense in a car. I'm not saying it won't happen but it will take either a huge technology leap or skyrocketing fuel costs to make it happen.

The one place where we just might see widespread use of fuel cells is battery replacements for consumer electronics. Most of the big consumer electronics companies are planning on releasing micro fuel cells next year to power laptops and other devices.

Basically, if you invest in fuel cells right now you are betting on a steep rise in energy prices in the near term. I just don't think it's going to happen. We are so inefficient, from an engineering standpoint, in our energy consumption that it is relatively easy to shift consumption behaviors when prices rise. As a result energy prices will not rise as quickly as some doomsdayers will have us believe and the need for widespread adoption of fuel cell technology will be obviated for the near term.

adios · #4 03-23-2004, 08:25 AM

I have to ask, coming from a venture capital perspective what are the most promising investments in your opinion? TIA for your thoughts.

MaxPower · #5 03-23-2004, 12:03 PM

Some people are imagining that eveyone will be riding around in fuel cell cars in a few years. There are many things that have to happen in order for this to be, and I don't see it happening anytime soon.
This article covers some of those things. Most significantly, the cost of fuel cell cars would have to be reduced by 90%.

Even if it happens in 15 to 20 years, there is no way to predict right now which public company will reap the benefits of this.

AceHigh · #6 03-23-2004, 11:41 PM

I wouldn't invest in fuel cells or GM. Gas prices are at an all time high and all I see on the roads are SUV's. Are people who buy SUV's worried about gas mileage?

If you are thinking wave of the future how about high-def TV's or maybe nanotechnology?

Me...I'm like homebuilders. But not everybody here shares my opinion.

Boris · #7 03-24-2004, 09:09 PM

lol. good question. Our limited partners are dying to know.
The VC industry, at least the high tech VC industry, is still lost and searching for a way to get back to 1998. Nanotechnology and Biotech always seem to be promising flavors of the day. Wireless is also still pretty hot. Our firm takes a more generalist approach. If it looks like a good deal, we'll do it. It's definitely not like early 2000 when firms would say with absolute confidence "we invest in Telecom!" or "We invest in e-Commerce!". It will be interesting to see how the industry shakes out.