NACCO Materials Handling Group acquires hydrogen fuel cell company Nuvera

In a deal that could boost hydrogen's prospects as an alternative energy source for warehouse lift trucks, NACCO Materials Handling Group Inc. (NMHG), a wholly owned subsidiary of Hyster-Yale Materials Handling Inc., said Thursday it acquired Nuvera Fuel Cells Inc., a maker of hydrogen fuel cells and hydrogen generation and dispensing products. Specific terms of the transaction were not disclosed.

Nuvera, headquartered in Billerica, Mass., develops and manufactures fuel cell stack subsystems and on-site hydrogen production and dispensing systems. Nuvera said its Orion fuel cell stacks can be factory-fitted or retrofitted for most brands of electric-powered lift trucks.

NMHG said its Hyster and Yale operating divisions plan to commercialize Nuvera's technology and rapidly integrate it into many of their lift truck offerings. According to NMHG, Yale and Hyster will become the first original equipment manufacturers (OEMs) to integrate and factory-fit fuel cell technology directly into their products.

Hydrogen fuel cells show promise as alternatives to batteries because they are quick and easy to refuel and are environmentally friendly and efficient power sources, particularly in cold interior environments. However, hydrogen has struggled to gain market share due to the high cost of the fuel and the infrastructure required to provide it. As a result, fuel cell technology has not been widely adopted and still remains in the development and testing stage.

A major obstacle to adopting fuel cell technology for lift trucks is the infrastructure costs of producing and delivering the hydrogen and for refueling the cells. Lift truck manufacturers must also conduct detailed testing on individual truck models before they can approve them for retrofitting with fuel cells. To address cost and technical concerns, NMHG said that Yale and Hyster will integrate the technology into their original design and production of lift trucks. In addition, the acquisition will allow Hyster and Yale to provide commercial-grade, on-site hydrogen generation and refueling capabilities. Retrofitting and servicing will be provided through Nuvera-authorized dealers.

NMHG said it expects Nuvera to generate significant operating losses over the next two to three years. NMHG plans to spend up to $50 million during that period for additional research and development to commercialize the technology and reach breakeven. The company said the acquisition was completed "for a modest purchase price" and requires certain contingency payments to the selling shareholders "based on future deployment of certain elements of the acquired technology."

Until the NMHG announcement, Nuvera had all but disappeared from the lift truck market. Meanwhile, the strongest domestic player, Plug Power Inc., continues to struggle with profitability. But Plug Power said its sales and customer pilot programs have grown in the past year since it rolled out its "GenKey" service, which integrates equipment, fueling, infrastructure, and maintenance solutions into a single package. The service saves customers money and reduces the complexity of using the technology, according to Plug Power.