Ballard to Discontinue Engine Generator Sales

May 28, 2003 by Jeff Shepard

Ballard Power Systems Inc. (Vancouver, BC, Canada) announced that it is discontinuing the development, sale and marketing of its internal combustion engine generator sets (gensets). Ballard began development of natural gas and hydrogen gensets in 2002 to generate early revenue and assist in the development of power generation distribution channels and hydrogen infrastructure.

Ballard's decision to discontinue its genset activities will not impact development of its fuel cell product lines or commercialization plans. Ballard will assess and evaluate various options with respect to the divestiture of assets from its genset activities. Ballard does not anticipate any material impact to its financial guidance for 2003 as a result of this decision.

"We continually review our programs to ensure we are focussing Ballard's resources on technologies and products that have the best prospects for long-term success," said Dennis Campbell, Ballard's president and chief executive officer. "Our product validation testing of the high-speed, natural gas genset revealed some system-related issues. Upon further review, we determined that the cost to resolve these issues would have reduced the competitive advantage of the natural gas genset. Without the base platform in place, the hydrogen fueled genset, with its more limited market potential, would have had to carry the entire cost of development. The decision was therefore made to exit the combustion engine genset business. We will continue to supplement our prime focus on fuel cell development with selected non-fuel cell derivative products, including electric drives, power electronics and carbon fiber materials, as we build a sustainable business."