Plug Power CEO Says His Company Is Square With Trump Administration

The Plug Power Inc. liquid green hydrogen plant in Woodbine, Ga. (Agnes Lopez/Bloomberg)

Shares of Plug Power , the country’s largest producer of clean hydrogen, fell 2.5% on Tuesday after the company’s second-quarter earnings came in below analysts’ expectations. But CEO Andy Marsh is optimistic about the future—in part because President Donald Trump and Republicans in Congress seem to be willing to prop up the clean hydrogen industry even as they take subsidies away from other sources of energy like wind and solar power.

The tax megabill that Trump signed last month will prolong some subsidies for hydrogen into the 2030s. Plug makes hydrogen using equipment called electrolyzers that are powered by electricity made from sources like wind turbines. Hydrogen can be used to power vehicles and factories. The cleaner version costs more to make than hydrogen made from dirtier sources like natural gas, so the tax credits are crucial.

Plug owns factories making hydrogen in Georgia, Tennessee and Louisiana. It got a loan guarantee late in the Biden administration to build another factory in Texas. Once Trump came in, the Department of Energy rescinded many of those loans, but Plug’s wasn’t one of them, Marsh noted. Marsh hopes to break ground on the Texas plant by the fourth quarter of the year.

He thinks that Trump has lumped hydrogen in with nuclear and geothermal—low-carbon energy technologies that need more help from the government to thrive—as opposed to wind and solar, which have had a much harder time under this administration.

“They’ve actually been more supportive of things which may be a little bit more longer term,” Marsh said.

It also helps that the oil and gas industry is positive about hydrogen, with Exxon Mobil and others investing in the technology. Exxon said last month that it’s close to launching the world’s largest low-carbon hydrogen project in Texas, but can’t make its final investment decision until it has more clarity on whether there will be more demand for the energy source. “If we can’t see an eventual path to a market-driven business, we won’t move forward with the project,” CEO Darren Woods said on the company’s earnings call.

In Plug’s case, the growth of its hydrogen business has taken decades, and included many stumbles. Less than two years ago the company issued a “going concern” notice, which a company has to do when there’s a chance it may not be able to continue operating.

Since then, it’s taken steps to fix its balance sheet, though it still carries a heavy debt load and the company’s stock price below $2 suggests that investors still have serious doubts. Plug continues to lose money on each ton of hydrogen it sells. But Marsh said that lately it has been getting better pricing from major customers, and is now on track to have flat gross margins by the end of this year. Plug’s customers include Amazon and Walmart, which use its hydrogen in products like forklifts.

Write to Avi Salzman at avi.salzman@barrons.com