Nel ASA Charts a New Course with Next-Generation Electrolyzer Technology

The Norwegian hydrogen specialist Nel ASA is entering the new year with a decisive strategic pivot. Despite its share price hovering near historic lows, the company is betting on a new electrolyzer platform and aggressive scaling. The central question for investors is whether this next technological generation can deliver the improved project economics the industry desperately needs.

Compared to its US rival Plug Power, Nel approaches 2026 with a more controlled balance sheet. As of September 30, 2025, the company held liquid assets of 1.76 billion NOK. Its third-quarter 2025 results revealed several key points:

• Contract revenues came in at 303 million NOK, down from 366 million NOK in the prior-year period.
• The EBITDA loss showed improvement, narrowing to -37 million NOK from -90 million NOK in Q3 2024.
• A strict cost management program is yielding visible effects.

Recent activity on the order front has provided some positive signals. In November 2025, Nel secured PEM electrolyzer orders from the HyFuel and Kaupanes hydrogen projects, with a combined value exceeding 50 million USD. Furthermore, the company established technology provider agreements with GreenH for projects located in Kristiansund and Slagentangen.

A Seven-Year Development Program Culminates at Herøya

Marking the conclusion of a seven-year development initiative, Nel has made its final investment decision for a new production facility. The site in Herøya, Norway, is slated to host a production capacity of up to 1 GW for the novel "Next Generation Pressurized Alkaline" platform. This decision follows successful prototype testing and scaling trials, which the company states have confirmed market-leading efficiency.

Key milestones for this project include:

• A commercial market launch for the new platform is scheduled for the first half of 2026.
• The company aims for full industrial-scale serial production ramp-up starting in 2027.
• The EU Innovation Fund has committed up to 135 million EUR in support of the industrialization phase.
• The design is modular and skid-based, intended for outdoor installation without the need for costly building enclosures.

As part of this technological transition, Nel is also reviewing the book values of two currently idled 500 MW production lines for atmospheric alkaline technology at the same Herøya location.

Should investors sell immediately? Or is it worth buying Nel ASA?

Modular Design: A Potential Game-Changer for Costs

At the heart of CEO Håkon Volldal's strategy is achieving cost leadership through a rigorously modular containerized solution. The approach involves delivering pre-fabricated, factory-tested units as standardized container skids, which promises to significantly streamline construction, logistics, and on-site installation.

The critical advantage lies in the outdoor operational design, which largely eliminates the need for expensive permanent buildings. This architectural shift has the potential to drive down the specific cost of hydrogen production to a level where projects could become economically viable without relying on substantial subsidies. For a sector grappling with persistent profitability challenges, such progress would be a major breakthrough.

Strategic Backing from a Major Shareholder

Nel has gained strategic support from its major shareholder, Samsung E&A. The Korean engineering conglomerate entered the company through a capital increase in March 2025. Since then, Samsung E&A has unveiled its "CompassH2" solution for hydrogen plants, which is built upon Nel's alkaline technology. This partnership opens a potentially significant distribution channel for future project deployments.

Sector Challenges and Valuation Uncertainty

The operating environment for hydrogen equities remains difficult. Sluggish industrial investment decisions continue to dampen demand. Over the past twelve months, shares of Nel, Plug Power, and thyssenkrupp nucera have all declined by approximately 14%, underperforming the broader Norwegian market.

Analyst consensus currently places the price target for Nel at around 2.28 NOK, aligning closely with recent trading levels. However, the wide dispersion of individual estimates points to substantial uncertainty regarding the sector's near-term trajectory.

Upcoming Catalysts and Key Dates

The next significant milestone will be the quarterly report due on February 26, 2026, where the market will scrutinize the trend in new order intake. In the subsequent months, the successful commercial rollout of the Next-Generation Pressurized Alkaline platform is viewed as the crucial catalyst for a potential, sustainable re-rating of the stock.