Jim Cramer: Call Me a Hydrogen Believer, and Plug Power Will Make It All Happen
Jan 08, 2021 | 08:16 AM EST
When I got to use my first cellphone I was aghast. I used to pump a lot of iron back then - the early 80s - and that meant I was one who could lift the portable instrument, something the size and weight of a car battery. I used to laugh at the notion, though, that the bulky device could even come near the abilities or reach of the phone booth. I mean, come on, there was little range, you often had to stop at a bridge to work the darned thing and it seemed like the most stupid, expense waste of time I could ever think of, versus a 25 cent call from a veritably ubiquitous and easy-to-use and reliable pay phone.
I gave up on it almost instantly. I said that until it was made smaller and could really be portable and there would be some range, it was silly to even try to carry it around.
Within five years it was no longer silly. It was standard. Clear sound, lightweight, fit in my pocket. Scale, the sheer numbers of people who wanted the device, drove the price down. Made it viable.
Seen a phone booth around lately?
When I was flummoxed by the car battery sized phone, though, there were true believers, people who worked to make the cellphone practical, dreamers like Andy Marsh, who was laboring at Lucent, the new name for Bell Labs, to turn that heavy box into something called a hand held phone.
You know what Andy Marsh does now? He runs Plug Power (PLUG) , an outfit dedicated to making green hydrogen a legitimate fuel for vehicles that doesn't even leave a trace, the ultimate answer to a smaller footprint for the most carbon generating devices of all: cars and trucks.
Now Marsh has labored at Plug Power since 2008 without much to show for it. Yes, he was able to get a small group of companies to use hydrogen powered forklifts. However, it seemed pretty darned futile and uneconomic, some would say, chimerical, to all but a handful of believers like Marsh.
Whenever you get something new, something different, though, a moment comes when so many want the device, the cost comes down when you get at scale. Plug Power has hit that scale. Just like cellphones.
Sure, it sputtered several times, even as Plug Power developed some top-flight customers along the way. Walmart (WMT) used their hydrogen powered forklifts. So did Amazon (AMZN) .
But the cost of the fuel itself rendered it uneconomic. Until now, because the power needed to convert clean hydrogen to a practical fuel has come down fast enough and the technology behind its ubiquitous use is here.
That's how Plug Power's stock has gone from three to $47 in one year. That's what scale will do.
Earlier this week Plug Power received $1.5 billion from SK Group, the third largest company in South Korea to form a strategic partnership to accelerate the hydrogen economy as part of that country's goal to have six million fuel cell electric vehicles and 1200 refilling stations by 2040.
The company selected Plug Power because Marsh has a turnkey solution for using clean hydrogen to refuel all sorts of vehicles virtually eliminating dirty carbon.
I know not everyone is a fan. Elon Musk, the man behind the Tesla (TSLA) , has called the fuel "mind-bogglingly stupid." I don't want to doubt Elon. He's too smart.
At the same time Marsh's solution, if the cost comes down, is cleaner than anything Musk can develop as long as the Tesla has to be plugged into a fossil fuel-based energy system as we have in this country.
I think the regular car or truck now represents the phone booth. The Tesla represents the clunky battery-sized phone. But when Marsh builds out his product, it will be the same thing he helped develop 30 years ago, the handheld.
It's incredible to me that some fossil fuel company, a BP (BP) , a Royal Dutch (RDS.A) (RDS.B) , even an Exxon (XOM) or a Chevron (CVX) , didn't buy this company and put hydrogen fuel cell pumps at their gasoline stations. Plug Power needed money for years and years. Now, though, because of a combination of fund-raises in the stock market and SK, Plug Power doesn't need the money. It's free to become a large energy company itself enjoying the lowering electric costs that make its technology too cheap to be mind-bogglingly stupid. You could have called me a hydrogen doubter. Now that it has scale call me a hydrogen believer and I believe in the Plug Power solution to make it all happen.
(Walmart and Amazon are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.)