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Plug Power expects to refresh around 20,000 hydrogen fuel cell units across its material handling customer base over the next two to three years, including under existing deals with Amazon and Walmart.
Having supplied hydrogen fuel cells to major retailers for material handling warehouse operations for over a decade, the US hydrogen firm is now entering a replacement cycle as its earlier deployments age.
By 2023, Amazon and Walmart had collectively deployed more than 27,000 Plug fuel cells, primarily across their distribution and fulfilment networks.
Speaking during Plug’s Q3 earnings call, CEO Jose Crespo said Walmart would begin refreshing its existing fuel cell fleet in Q4, with between 2,000 and 2,500 units expected to be replaced before year-end.
The expected refreshes follow a sharp increase in Plug’s material handling business, with GenDrive fuel cell deployments more than doubling year-on-year to 1,136 units in Q3.
Although the firm did not disclose how much revenue the replacements would generate, CFO Paul Middleton said the firm expects around $280m in total Q4 sales, with growth primarily driven by equipment sales.
Crespo also said the company is talking to “four or five potential new customers for 2027,” as well as working with other retail majors including Home Depot and Grainger.
The broader Q3 financials saw Plug narrow its operating loss by 78.4% to $75.3m, down from $348.8m a year earlier, as higher revenue, improved gross margins and reduced operating expenses strengthened its financial performance.
The expected growth in material handling sales could help offset weaker electrolyser revenues, which fell by around $40m year-on-year in Q3 as Plug transitions towards larger-scale projects, including installations now undergoing commissioning in Europe.
