Hyzon Halts All European and Australian Hydrogen Operations: Facing $17M in Charges
July 12, 2024
Hyzon, a US-based manufacturer and global supplier of hydrogen fuel cell systems, announced it will halt all of its operations in the Netherlands and Australia. The company considered this the best decision after completing its assessment of what it deems as challenging market conditions across Europe and Australia and evaluating all available options.
"I would like to express my utmost gratitude to our dedicated European and Australian teams who have tirelessly worked toward advancing the hydrogen transition," said Hyzon Chief Executive Officer Parker Meeks. "This was a complex and difficult decision. Given the challenges of bringing new technology to market in an emerging industry, we believe we need to focus our efforts on the North American market."
According to Hyzon, government support for fuel cell-powered transportation in Europe and Australia has declined in comparison to North American efforts to accelerate the hydrogen transition and adoption of zero-emission fuel cell technology. This includes the disbandment of hydrogen subsidies in several European countries.
Although operations will halt, Hyzon still intends to maintain the potential to return to the European and Australian markets as a fuel cell system supplier to Original Equipment Manufacturers.
As a result of its planned exit activities, Hyzon expects to incur nearly $17 million in various charges, of which $7 million is expected to be in cash. Components of the charges include:
- $7 million in non-cash inventory write-downs
- $3 million in employee-related costs
- $4 million in other exit-related costs
- $3 million in non-cash impairment charges
Hyzon will incur these charges in Q2 and Q3 of 2024, with related cash payments due in Q3 and Q4 of 2024. Additionally, the company anticipates derecognition of certain liabilities, which may result in non-cash gains in Q3 and Q4 of 2024. Hyzon is currently unable to estimate these non-cash gains.
