Fuel Cell Fatigue Dries Up Investor Funding

After pumping so much money into the fuel cell sector, investors have realized no financial return of late, and determined that the area poses too much risk, impacting research funding.

Published: 27-May-2005

VANCOUVER -- British Columbia investors have a new disease called FCF, or fuel cell fatigue. The mantra that "commercialization is around the corner" is now a negative for investors who supported the Canadian fuel cell industry based in the province.

Investors are pinching their noses and holding their breath, while the federal government has raised -- slightly -- the amount of research funds available to the industry through a number of programs. Some of the reasons for the private capital crunch are emotional. It's natural: There has been a lot of disappointment over the years. The rest involves the short-term focus of financial markets and risk aversion. After pumping so much money into the sector, investors have realized no financial return of late, and determined that the area poses too much risk.

What's worse is that the fuel cell sector in Canada -- including giants like Ballard Power Systems Inc. -- is starting to run out of the operating and research monies that it accumulated during the heady heydays of the tech boom. But the sums needed to get over the finish line with a viable fuel cell vehicle on the market are still huge, estimated to be in the billions. Part of the reason for the big dollar figure is that the burn rate for research and development in this sector in Canada is pegged at more than $300-million a year.

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