Nel ASA Charts a New Course Amidst Share Price Challenges

Norwegian hydrogen technology firm Nel ASA is embarking on a significant strategic pivot, even as its shares trade near historic lows around NOK 2.23. Backed by substantial European Union funding and an aggressive expansion plan, the company is targeting a operational turnaround starting in 2026. The critical question for investors is whether this technological shift can stabilize the beleaguered stock.

The board's final investment decision (FID) on December 12, 2025, signals a major strategic redirection. It authorized the development of up to one gigawatt of production capacity for its next-generation pressurized alkaline technology at the Herøya site. This move culminates a seven-year development program.

Key details of the expansion plan include:

• Total Investment: Approximately NOK 300 million (before grants)
• EU Funding Support: Up to EUR 135 million from the Innovation Fund for industrialization
• Ultimate Capacity Goal: 4 GW of annual production
• Project Timeline: Commercial operations beginning in the first half of 2026, with industrial-scale deliveries starting in 2027

Market Skepticism Persists

Despite these forward-looking initiatives, market sentiment remains predominantly cautious. The equity has declined more than 17% since the start of the year and has shed over 92% of its value on a five-year basis. With a market capitalization of just NOK 4.1 billion, the market continues to price in persistent project delays and broader demand uncertainty within the hydrogen sector.

Should investors sell immediately? Or is it worth buying Nel ASA?

Driving Down Costs Through Innovation

The core of the new strategy is a fully modularized, "skid-based" platform. These pre-fabricated and factory-tested units are designed to drastically simplify engineering, logistics, and on-site installation. As the systems are built for outdoor deployment, the need for expensive building structures is eliminated, which should significantly reduce associated infrastructure costs.

CEO Håkon Volldal highlighted that the improved levelized cost of hydrogen (LCOH) could unlock business models previously reliant on heavy subsidies. Concurrently with this refocus, the company is reviewing the book value of two currently idled 500 MW production lines for atmospheric alkaline electrolyzers at Herøya. This evaluation points to potential asset impairments, as the corporate focus shifts entirely to the new pressurized technology.

Investors will gain further insight when Nel ASA reports its fourth-quarter 2025 results on February 26, 2026. Order intake and expansion progress will be key metrics under scrutiny. Near-term financial relief is expected from the first disbursement of the EU grant, exceeding EUR 10 million, which is intended to support the cash flow for the investment program over the next two years.