A pair of contracts with an automotive giant sent a Burnaby-based fuel cell company's stock soaring last week.
Ballard Power Systems announced last Wednesday that it had inked an $80 million U.S. deal to license a portfolio of its fuel cell patents to Volkswagen.
The deal includes around $50 million in licensing fees for Ballard's electrode membrane assemblies, flow field plates and other intellectual property. The extension of an existing engineering services contract accounted for another $30 million.
Ballard's stock jumped 57 per cent with the announcement, according to media reports.
Ballard president and CEO Randy MacEwen said in a release that the deal "reflects a growing positive sentiment toward fuel cells within the automotive sector."
"This transaction extends and deepens our relationship with the Volkswagen Group," he added.
Fuel cells generate power through a chemical reaction. Because the chemical reaction involves hydrogen and oxygen, the main by-product is water, instead of gaseous pollutants.
According to a CBC report, VW and stable-mate Audi unveiled four fuel cell concept vehicles at a U.S. auto show last year.
Volkswagen officials hailed the deal as a step towards getting hydrogen fuel cell technology to a wider market.
"We believe that this portfolio, together with the combined fuel cell skills and expertise of our group and Ballard, will underpin our ability to play a leading role in fuel cell automotive development and commercialization," VW board member Ulrich Hackenberg wrote in a release.
The deal led some analysts to upgrade the outlook for Ballard stock, with one saying the licensing scheme would allow the company to expand its fuel cell technology into "bus, telecom and other markets."
B.C. Fuel Cell Company Nets $80 Million in Volkswagen Contracts