Plug Power made a splash with two major announcements. Within a span of a week, Plug Power announced partnerships with SK Group and Renault, launching Plug Power’s stock into the stratosphere. Both are global companies with significant reach into Asia and Europe respectively. Here’s a breakdown of key Plug Power strategic investments.


Before we get into SK Group and Renault, we need to talk about the “gigafactory”. Nope, not Tesla’s, but Plug Power’s. That’s right, if you didn’t catch the news, Plug Power (NASDAQ: PLUG) will be constructing it’s own gigafactory to pump out fuel cells and electrolyzers for worldwide sales. This is a big deal.

Plug Power raised about $1 billion in an equity raise to help fund the gigafactory. The gigafactory will be built in Rochester, New York and is planned to open in mid-2021. The term “gigafactory” means that it’ll make equipment that’ll produce gigawatts of electric power.

One thing that’s impressed me about Plug Power is their strategic and big-picture thinking. They also have great discipline in deploying capital – having a pretty strong balance sheet. See my last deep dive on Plug Power here.

The gigafactory is all about tapping into a growing market for hydrogen globally. Plug Power has proven technology, but it’s all about making that key investment to take them to the next level. The gigafactory is the lynchpin in that.

SK Group

SK Group might be an unfamiliar name to some. But, it’s actually the second largest conglomerate in South Korea – behind Samsung, and larger than LG. SK is a mega company that has businesses ranging from semiconductors to energy and telecommunications.

SK Group a strategic investment partnership with Plug Power

The announced Plug Power – SK Group joint venture sent shockwaves in the hydrogen industry. SK Group made a $1.5 billion strategic investment in Plug Power, purchasing 51.4 million of Plug Power stock. In return, the two companies will form a joint venture to accelerate hydrogen as an alternative energy source in Asian markets.

From the press release:

In January 2019, the South Korea government announced the Hydrogen Economy Roadmap through 2040, with ambitious goals, including: over 5MM tons of hydrogen per year, over 6MM fuel cell EVs, 1,200 refilling stations and 15 GW of fuel cell power generation, and expects the cumulative economic value of its hydrogen economy to reach ~$40Bn by 2040. Plug Power has proven its ability to scale a hydrogen business in North America as a global leader in the hydrogen economy. The opportunity to partner with SK presents an attractive and timely opportunity to establish a foothold in this market with one of South Korea’s leading industrial conglomerates,

Plug Power Press Release 01/06/21

This represents a massive opportunity for Plug Power to seize and the joint venture gives them the scale to meet the heavy demand for hydrogen in South Korea and beyond. This puts Plug Power on the leading edge of US hydrogen companies in terms of access to a country that’s serious in developing a hydrogen economy. SK Group has a leading renewable energy and power plant business that’s meshes well with Plug Power’s core offerings.


When things just got very interesting with the SK Group announcement, taking Plug Power’s stock higher by 33%, voila! another major announcement. Within a week, Plug Power and Renault, the French carmaker, signed an MOU to jointly develop hydrogen fuel cell light commercial vehicles (LCVs). Think Amazon delivery vehicles and the like.

The partnership will be a 50-50 joint venture that intends to capture 30% of the LCV market in Europe.

Some key points from the press release:

– Joint-venture will establish in France state-of-the-art innovation and manufacturing capabilities for hydrogen fuel cell systems and their integration in vehicles.

– The partnership provides a unique value proposition: turn-key fuel cell vehicle solutions with hydrogen fuel, refueling infrastructures and services.

– This strategic project supports the decarbonization of mobility in Europe with the adoption of clean energy solutions, and the creation of innovating value-generating activities in France, including an industrial footprint in a promising market, business know-how and intellectual property in this new field of technology

Plug Power Press Release 01/12/21

Basically this gives Plug Power a robust launching point to sell its technology in Europe. Also, Renault is no joke in Europe. They’re the third largest seller of cars in the continent. And they’ve got engineering expertise and the technical know-how in automotive R&D. One of the best parts of this deal is that the JV will start selling to fleets in 2021.

Bottom Line

If you’re comparing hydrogen companies, Plug Power is the cream of the crop. They’re the total package. And that’s because they’ve got the following:

  • Strategic thinking
  • Excellent leadership team
  • Proven product/technology
  • Capital discipline

If you had to take one thing away from these strategic investments — it’s that Plug Power wasn’t chosen by random luck. SK Group and Renault have been in business a long time and they’re going to spend their money for the best return.

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