Plug Power energized, receives product order from Wal-Mart
Shares of Plug Power Inc. (Nasdaq: PLUG) are rallying following news before the start of trading that the maker of energy systems received a purchase order from Wal-Mart Stores, Inc. (NYSE: WMT).
Wal-Mart, the world’s largest retailer, announced an order for GenDrive fuel cell power units to be used in lift trucks at one of its distribution centers. Latham, N.Y.-based Plug Power’s new technology will be replacing the previously used lead-acid batteries. The financial details of the agreement were not released.
The order comes following the completion of a successful trial of 12 fuel-cell-powered pallet trucks at two distribution centers in Ohio. In the space of four months the trucks clocked 18,000 hours.
“This is a significant event for Plug Power and a solid step forward with the widely respected leader in distribution and logistics,” said Tom Hoying, vice president of sales and customer operations, in a statement. “We believe Wal-Mart’s state-of-the-art distribution centers make an excellent proving ground for the commercial application of GenDrive.”
When it comes to pallet trucks and other large industrial vehicles, fuel cell power units are cheaper to operate and require less space than the more widely used lead-acid battery systems. According to Plug Power, its fuel cells eliminate the maintenance costs associated with lead-acid batteries and are less hazardous. The company estimates that Wal-Mart’s purchase of the technology to replace lead-acid batteries is the equivalent of removing 60 cars from the highway.
“We’ve seen how fuel cells can improve efficiency in our distribution centers while enabling us to be more responsible global citizens,” said executive vice president of logistics and supply chain Johnnie Dobbs in a statement. “Our hope is that our investment in fuel cell technology will encourage its development as a viable option to existing technologies.”
At 3:45 p.m. ET, Plug Power Inc. (PLUG) shares had gained $0.69, or 23%, to $3.66. The 52-week high is $4.38, achieved on Oct. 23, 2006. The 52-week low of $2.42 was set on Aug. 24.
