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Plug Power (PLUG 1.26%)
Q2 2023 Earnings Call
Aug 09, 2023, 4:00 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Greetings, and welcome to the Plug Power Q2 call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator instructions] As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Teal Hoyos, senior director of marketing and communications. Thank you. Teal, you may begin.
Teal Hoyos -- Senior Director, Marketing and Communications
Thank you. Welcome to the 2023 second-quarter earnings call. This call will include forward-looking statements. These forward-looking statements contain projections of our future results of operations or of our financial position or other forward-looking information.
We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We believe that it is important to communicate our future expectations to investors. However, investors are cautioned not to unduly rely on forward-looking statements, and such statements should not be read or understood as a guarantee of future performance or results. Such statements are based upon the current expectations, estimates, forecasts, and projections, as well as the current beliefs and assumptions of management, and are subject to significant risks and uncertainties that could cause actual results or performance to differ materially from those discussed as a result of various factors, including, but not limited to, the risk factors and uncertainties discussed under Item 1A Risk Factors in our annual report on Form 10-K for the fiscal year ending December 31, 2022, quarterly results on Form 10-Q and other results we file from time to time with the Securities and Exchange Commission.
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These forward-looking statements speak only of the day in which the statements are made. And we do not undertake or intend to update any forward-looking statements after this call or as a result of new information. At this point, I would like to turn the call over to Plug's CEO, Andy Marsh.
Andy Marsh -- Chief Executive Officer
Thank you, Teal, and thank you, everyone, for joining the Plug Second Quarter Conference Call. Plug is in the process of developing an unparallel hydrogen fuel cell platform. This encompasses our diverse array of products, extensive international collaborations backing from government entities, financial partners, and our robust infrastructure. Our second quarter outcome reveals noticeable growth in several of our recently launched products, particularly in our cryogenic sector, which garnered $69 million in revenue, making a more than threefold rise over the previous year.
Our international collaborations are yielding positive results as well. Through our joint venture with Renault, the initial product from HYVIA has garnered positive reviews. Kilometres magazine, a renowned authority in the realm of commercial vehicles in France, bestowed the Heavy Commercial Vehicle of the Year 2023 award upon the Hyvia fuel cell electric vehicle master van. Through our partnership with SK, our joint venture, Hyverse, achieved a significant milestone as the first megawatt-scale electrolyzer to be certified in Korea.
Our strong governmental backing spans across key global capitals from Washington, D.C. to Brussels, Helsinki, Paris, and Seoul, Plug's called to be with robust connections with government authorities. Given the vital intersection, energy, and climate change with governmental policies, we have proven ourselves as trustworthy experts capable of offering insights and impartial analysis on the path toward a carbon-neutral world. This strategic policy alignment is reaping rewards in the present as the American manufacturing company Plug generated a $10 million increase in gross margin dollars during the second quarter, attributed to the provisions promoting American-made products under the IRA.
We anticipate further advantages as we tack into manufacturing incentives within the IRA along with the production tax credit for hydrogen. The IRA is starting to pay dividends to Plug. Furthermore, we have actively secured multiple sources of non-dilutive capital as we diligently expand our global green hydrogen generation network. Presently, Plug is in the final stages of the second round of due diligence with the DOE loan program office for $1 billion project financing facilities.
We have a term sheet, term sheet framework, and we're working through final processes to get this structure approved and lost. Simultaneously, we're assessing various options, including corporate debt facilities for major financial institutions, alternative infrastructure, project financing, and solutions for ITC project financings. Lastly, the unmatched nature of our manufacturing infrastructure to substantiate not only by our internal evaluation but also by feedback from customers and potential clients. Initially designed to support 2.5 gigawatts of MEAs, our Rochester facility now boasts a scalable potential of up to 7.5 gigawatts as we advanced the production process.
Now, I had the privilege personally touring our Vista facility, our 400,000-square-foot integration factory with a customer this past Tuesday. And quite honestly, they were astonished because they've been at everybody else's facilities. Additionally, our hydrogen play in Georgia, for which we are hosting an Investor Day on August 23, stand as the largest green hydrogen plant in North America. Navigating the process of scaling our business presents its own set of challenges and our ability to surmount these challenges serve as a distinct advantage for Plug.
One has been our gross margin challenges. What's not readily apparent is that excluding one-time charges, our margins in the second quarter would have been minus 12%, over 20% better than Q1. Throughout the rest of 2023, we will see continual margin expansion. An industry leader shared with me recently, the endeavor is truly valuable when it comes with its share of challenges and this, in the end, provides a differential advantage.
The journey of mastering the construction of hydrogen plants, spanning factory capabilities, developing customers, and concurrently introducing array of new products has undoubtedly been demanded. However, we firmly believe that the efforts investing in these undertakings will yield substantial benefits for all those vesting in Plug's success. At this point, Paul, Sanjay, and I are prepared to address any questions you may have. So, I think we're up for questions.
Questions & Answers:
Operator
All right. Thank you. We will now be conducting a question-and-answer session. [Operator instructions] One moment, please, while we poll for questions.
Thank you. Our first question comes from Bill Peterson with JPMorgan. Please proceed with your question.
Bill Peterson -- JPMorgan Chase and Company -- Analyst
Hi. Good afternoon, team. How are you doing this afternoon?
Andy Marsh -- Chief Executive Officer
OK, Bill. Good afternoon.
Bill Peterson -- JPMorgan Chase and Company -- Analyst
Good afternoon. Lots to digest in release, so forgive me if we missed some things here. But I wanted to talk about the upcoming guidance in the U.S. treasury related to the IRA.
And I know you had depressed confidence in the past, and it seems like there may be some positive news forthcoming. But first of all, when should we get some resolution on the additionality and matching things? And I guess if it was going to be unfavorable, I guess, about this PTC, how the economics compare between the U.S. hydrogen plant and a plant in Europe?
Andy Marsh -- Chief Executive Officer
Really good question, Bill. And if I was going to -- let me answer the first part of your question. It's our assessment and it's the assessment of many people that we will see guidance in September. And I think that from what we can tell from the guidance, there was a good article by Bloomberg, which is consistent with discussions we've had with many senators, with people in the White House that I think that the regulations will be, I think, very reasonable in the end.
We look at these plants today. So, there are differences between the energy cost in Europe versus the energy cost in the U.S. So, if you take, for example, green hydrogen itself, if you think about a -- and I'm going to talk about generation without liquefaction, transportation, I think at $0.03 a kilowatt hour, you're talking probably around $2.50 in the U.S. to generate at a spot like Texas.
If you think about Europe, and that would include the cost of production and the cost of depreciation, Bill, we would not include the cost of liquefaction or transportation. So, liquefaction probably adds to that facility $0.75 just to kind of give you a gauge. In Europe, with the PTC, obviously, the PTC was structured to make sure that hydrogen was cost-competitive with natural gas. So, when you start adding on liquefaction, transportation, you're really probably talking about cost around, call it, $4.50 to $5 at a customer site for the best case, which would be Texas, which really puts hydrogen in the realm of natural gas.
And I think that's the goal of the IRA. If you look at Europe, the support will be different. It's really more geared to -- if you really look at the total dollars that Europe is putting toward hydrogen fuel cells, we think those numbers sit around $870 billion, but much more how you work the government grant process. That's why our international collaborations is real important because -- I know this is a long answer, Bill, but if you take, for example, our JV with HYVIA, we've been able to leverage over EUR 200 million in government grants to support the development of that business.
Does that help, Bill?
Bill Peterson -- JPMorgan Chase and Company -- Analyst
Yeah. No, that's super helpful. Maybe the second question for me is, it sounds like you're moving into next steps with some potential good promising outcome maybe with the DOE loan program office. But I guess, what remains to be done? It sounds like you're in the second stage of due diligence.
And what would be the timing given you successfully pass that bar?
Andy Marsh -- Chief Executive Officer
I'm going to hand that off to Paul, Bill.
Paul Middleton -- Chief Financial Officer
Yeah. Hey, Bill. So, there's a couple of things. Well, first and foremost, the good news is we've come together, as Andy alluded in his comments, with an outline of the term sheet that we think will work for us and that they can get passed.
And so, that's a big hurdle. And they're in the final -- now they're off to new races doing the final due diligence around market studies and technical studies and things that they just got to kind of finish that process. But I -- and then once we get through that, we'll -- there's a little bit of more polishing to finalize the term sheet in a format that they can submit through their process that they've got to go through the government agencies to get approved. So, at this point, our best guess is that we would have something approved and be able to announce something hopefully mid-November to early December.
We're all -- they are equally motivated to get it done fast as we possibly can. So, we've got weekly meetings and efforts to try and push over those final hurdles. So, we'll see how it plays, but that's kind of the timeline and where we're at in that process.
Bill Peterson -- JPMorgan Chase and Company -- Analyst
Helpful. Thanks a lot, guys.
Andy Marsh -- Chief Executive Officer
Thanks, Bill.
Operator
Thank you. Our next question comes from Eric Stine with Craig-Hallum. Please proceed with your question.
Eric Stine -- Craig-Hallum Capital Group -- Analyst
Hi, everyone. Thanks for taking our questions here.
Andy Marsh -- Chief Executive Officer
Hey, good to hear you, Eric. Good afternoon.
Eric Stine -- Craig-Hallum Capital Group -- Analyst
Good afternoon. So, I have not -- well, I haven't been able to digest the entire letter here. So, I might come back to some questions. From your Investor Day, you had talked about $4 billion in overall electrolyzer opportunities that you saw over the next 12 months.
I'm curious whether that still holds -- whether that's accelerated and maybe what area is the market where you are seeing the most traction with that business?
Andy Marsh -- Chief Executive Officer
Eric, I'm going to turn it over to Sanjay.
Sanjay Shrestha -- Chief Strategy Officer
Great. Thank you, Andy. Since we last talked about that, the number is actually, if anything, gone up a bit. We are actually tracking about 7.5 gigawatt of opportunity as much as $5 billion of potential revenue opportunity for us on that business.
And by the way, Eric, one of the things we've done is rather than talk about just the big funnel, we have actually identified project by project, right? And these are the projects we believe could actually get to FID, final investment decision, over the next 18 months. Now, look, some of them might not materialize, some of them move faster than expected, but that's what the funnel sits at right now. And the mix is really -- when you really think about sort of the mix, there's a lot of opportunity here in the U.S., actually quite sizable projects. We're actually very, very far along with some of the sizable opportunity here.
There is actually and you guys all saw that we announced this pretty big opportunity with a major oil and gas company in Europe, which we had talked about on our last earnings call, and there's lots of those opportunities in Europe, as well as, in broadly speaking, in the Asia Pacific market as well. So, again, we are certainly looking to close several more large electrolyzer deals here before the year is over, and that's where the funnel sits right now.
Eric Stine -- Craig-Hallum Capital Group -- Analyst
Got it. And maybe, Sanjay, probably this is yours as well. I know a big topic a few months back was in terms of green hydrogen and although you've got very extensive plans, whether that actually is going to end up being enough. And also, kind of the open question of how much do you keep for your customers? And how much do you keep open that you might sell in the market? So, maybe some updated thoughts on that would be great.
Sanjay Shrestha -- Chief Strategy Officer
Yes, sure, Eric, right? I mean, a couple of things. Look, I mean, our bringing of green hydrogen plants online is a key to really expanding and improving our fuel business margin. We've talked about that again and again, right? I think once we start to produce internally, that actually reduces our cost of green hydrogen by one-third versus what we're having to pay right now in the market. So, it's a step change, if you would, right? And the way, the cadence of that is really Georgia, then Louisiana, then Texas, then New York, right? And obviously, our existing plant in Tennessee.
So, once we have Texas up and running, that's when you actually start to see our fuel business turn profitable. That is still buying from the third party under some of the existing contract right now. So, our primary goal is to really make sure that we're supporting our customer in our existing application business to make sure that the resiliency is there, we're supporting them 24/7, it's a mission-critical application for them and simultaneously expand our fuel margin. Now, from the third-party opportunity perspective, Eric, I mean, the funnel is actually bigger than 500 tons opportunity.
But near-term focus is really how do we make sure that we have enough for our material handling business, how do we make sure we have enough for our application business so that the application business in terms of your stationary product ends up really having a good total cost of ownership for our end customer, then we really start to think about swap opportunity. No real change in the view. We still want to have about 20% reserve capacity to be able to support all the force majeure that we've seen here in this liquid hydrogen market in North America, but that's really where we are right now, Eric. Andy, would you like to add anything?
Andy Marsh -- Chief Executive Officer
No, I think you covered it, Sanjay.
Eric Stine -- Craig-Hallum Capital Group -- Analyst
All right. Thank you very much.
Andy Marsh -- Chief Executive Officer
Thanks, Eric.
Operator
Thank you. Our next question comes from James West with Evercore ISI. Please proceed with your question.
James West -- Evercore ISI -- Analyst
Hey, good afternoon, guys.
Andy Marsh -- Chief Executive Officer
Hey, James, how are you?
James West -- Evercore ISI -- Analyst
I'm doing all right. How are you doing, Andy?
Andy Marsh -- Chief Executive Officer
OK.
James West -- Evercore ISI -- Analyst
So, curious how you guys are thinking about green hydrogen production in Europe. We obviously know the strategy in the U.S. You've got a variety of projects in Europe, but I suspect there's more to come. What's the -- I guess what's the broader strategy to attack the European market with green hydrogen?
Andy Marsh -- Chief Executive Officer
Yeah. Good question, Eric. Let me take a step back. We believe that when you look at the cost of energy and the availability of green molecules, most of that's going to exist in the Northern Cone and the Southern Cone of Europe.
As we mentioned in the letter, with ACCIONA, we're looking to have the first 15-ton plant commissioned by the later half of 2024. The Port of Antwerp will support a good deal of our activities, which are going on in France, as well as supporting some activities in Germany, which will be a 35-ton plant, which initial hydrogen production in 2025. As we've talked about, Finland is an area we're spending a good deal of time where we feel we'll be able to support up to 10% of European's internal goals by 2030 with FID in 2026. So, that's a big focus.
There are smaller activities going on for smaller plants in France and Germany to support, especially our material handling and stationary customers. But that's kind of -- I think you'll see most of the activity. And we have land we own now in Denmark and other places, which provides opportunities that we've looked at, which could become sites for building out large hydrogen plants. Now, the key item in Denmark and Finland is that both of them are looking to put hydrogen pipelines into Central Europe.
So, that is the real focus of Plug.
James West -- Evercore ISI -- Analyst
OK. Good. Very helpful. Definitely does, yeah.
Thanks, Andy. And then do you guys see a scenario playing out in the EU or Europe broadly that's similar, I mean, they have the green industrial plan, which is kind of the counter to the IRA, but there's not a ton of detail out there. But do you see something similar to what the IRA is doing for? There could be something similar to what the IRA is doing for green hydrogen in the U.S., it's kind of supercharging the market.
Andy Marsh -- Chief Executive Officer
We do -- and we do, James. And when we look at it, and I'm going to say on paper, it appears to us the dollars that have been allocated in Europe are larger than the dollars allocated in the U.S. The advantage U.S. has is the fact that it's much more of a public market activity so that since it's based on tax credit, it's easier to navigate.
But we do see in Europe that the overall dollars between now and 2030 could exceed the U.S. And look, that's why we have partners like ACCIONA. That's why we partner very closely with the Port of Antwerp. Now, you really need the right -- for a company like Plug, you really need the right European partners to really leverage that expansion.
James West -- Evercore ISI -- Analyst
Got it. OK. Thanks, Andy.
Operator
Thank you. Our next question comes from Manav Gupta with UBS. Please proceed with your question.
Manav Gupta -- UBS -- Analyst
Hi. So, Sanjay kind of alluded to this, but refining is a massive market opportunity as it relates to replacing gray hydrogen. You actually announced an order in Europe, one of the bigger ones to replace gray hydrogen with green hydrogen. Do you see this segment end market growing? And someday, even U.S.
refiners looking to source green hydrogen and replace their gray hydrogen. I'm not sure if you saw yesterday, but there's a public independent refiner who basically on their earnings call said we are looking for electrolyzers to make green hydrogen to support our SAF. So, as an end market for U.S. refining or Europe refining, how you're thinking about that?
Andy Marsh -- Chief Executive Officer
I'm going to let Sanjay take that.
Sanjay Shrestha -- Chief Strategy Officer
So, a couple of comments, Manav, right? Short answer is yes. We certainly see that as a pretty meaningful opportunity. It absolutely makes a lot of sense. And frankly, this is where production tax credit really play a major role to make it a level playing field as Andy was talking about it from a price competitive standpoint versus gray hydrogen and green hydrogen in some of these markets, right, where the economics start to make sense, pricing start to make sense.
Economic value proposition for the customer that are looking to be decarbonized makes a lot of sense. And as you know, from the industrial opportunity perspective, refining industry is actually a very large user of gray hydrogen and existing opportunity today. We do see this as a major electrolyzer sales opportunity, number one. Second, it could even lead into something like a build-own-operate model for us.
And we do have several of those discussions going on, not just in Europe but also in the U.S. market. Hard to say exactly when they materialize and end up becoming a concrete opportunity, but we have multiple of those opportunities. And these are gigawatts and gigawatts of electrolyzer that that industry is going to need in terms of really going from gray to green hydrogen.
And one thing that's actually somewhat very unique for Plug, if you would, right? And this is what we talked about as our enterprise sales opportunity and really trying to serve to the customer's need. If they want to buy hydrogen, we can certainly approach it as a build-own-operate model where we own the electrolyzer, supply them hydrogen behind the fence, if you would. We can do that. And if they are just looking to buy it as a capital equipment, of course, we are the company that has the scale and the Gigafactory that can support the kind of the demand and the needs that they have.
But rest assured, we got a lot of those discussions going on both in the U.S., as well as in Europe, and we certainly see this being a big opportunity.
Manav Gupta -- UBS -- Analyst
Thank you. I have one quick follow-up. Recently, you introduced your HL 1500, the market's first portable hydrogen refueler. I wanted to follow up on it.
How are the conversations with potential customers going with that product? Do you see that product making an impact to your top line in '24 and '25?
Andy Marsh -- Chief Executive Officer
I'm going to hand that one over to Sanjay also. Sanjay?
Sanjay Shrestha -- Chief Strategy Officer
Thanks, Andy. Again, Manav, we're actually sold out with that product for this year. So, that's how the demand is. We have transit companies that are super interested in it.
We actually have -- that even opens up some of the traditional existing market for us even on a smaller size because of that mobile refueler. It actually has a lot of application for fuel cell electric vehicle companies that are looking to launch Class 7 and Class 8 truck before the whole infrastructure gets built out, right? So, we're completely sold out. It's a very good-margin business for us as well within our cryogenic business. You will see a big impact in Q4 of this year with that revenue.
We see substantial growth coming out of that business, both in 2024 as well as 2025, and this product already has a gross margin that is within our corporate target that we have articulated in the past.
Manav Gupta -- UBS -- Analyst
Thank you so much, and this is all very positive. Thank you.
Andy Marsh -- Chief Executive Officer
I would just add, Sanjay, it is so critical to transition because if you're thinking about going with five or six buses to start or you're trying to think about using four or five vehicles, this is a tailor-made product to really support the development of the industry. And it is really a unique offering.
Manav Gupta -- UBS -- Analyst
Absolutely. Thank you for that.
Andy Marsh -- Chief Executive Officer
Thank you, Manav.
Operator
Thank you. Our next question comes from Colin Rusch with Oppenheimer. Please proceed with your question.
Colin Rusch -- Oppenheimer and Company -- Analyst
Thanks so much, guys. As you guys look at some of the challenges in and around interconnection for renewables and some of the larger power systems, can you talk a little bit about what you're seeing in terms of incremental project development demand on the stationary power side, but also how folks are thinking about potentially diverting some of that power into hydrogen to avoid some of the interconnection challenges?
Andy Marsh -- Chief Executive Officer
So, Jose, who's not with us today, is -- we are seeing substantial demand and activities associated with especially powering EV vehicles for folks who want fleets for delivery vans. People want buses which are electric vehicles, where the availability of the grid, yes, is not there. No, we have orders that we could ship up to 17 megawatts this year. Next year, our internal forecast show 50 to 75 megawatts.
I think everywhere we go, that is a challenge and that the stationary product really helps people overcome that challenge. I really like that market because it's really, to me, like the work we're doing with SK and for Hyverse, it's really to us the future peaker plant that we're getting all this learning, developing these products, which eventually will replace gas turbines and will sit side by side with solar and wind generating hydrogen during the off -- when the wind is blowing, using the stationary to back up wind and solar farms, as well as, ultimately, how nuclear rolls out. There's really a close correlation for peakers. We think it's the perfect product.
I always like to say to our team, this is generation No. 2 at the moment, and it's quite a product. I expect that this will go through learning curve after learning curve and there'll be generation after generation. But that demand is real, and that is a real headache to the development of EVs.
It's a real head -- which we think is important for climate change, but it is a real, real problem. It's also this connection issue is why the debate going on with additionality, really doesn't make any sense to us. And that it is something that we know that the White House and others know, it is a huge problem. When you sit with Senator, Manchin, we talk a lot about interconnect and permitting and what it means for electric vehicles, as well as what it means for how you meet the 2050 U.S.
climate goals.
Colin Rusch -- Oppenheimer and Company -- Analyst
Great. Thanks so much. And then if you guys continue to scale and look at shorter time frames on some of these projects. Can you talk a little bit about the evolution of your supply chain and their willingness to invest in incremental capacity to support your growth?
Andy Marsh -- Chief Executive Officer
I spent -- that's actually why I spent my whole afternoon on. And we've announced, obviously, one critical supplier, Johnson Matthey, who's moving forward with us. We have others in the electrolyzer business. If you think about -- let's take an electrolyzer.
What do I worry about? I worry about items like -- I worry about rectifiers and making sure suppliers are well-positioned to support our own internal needs. I worry about control panels. I worry about fabricators. And for all those three items, I think Plug -- and I think we should probably publicly go more about who those partners are, probably can't do it on this call.
We need to kind of clear with them, but we have been developing relationships, and we do see people making investments. And I think what you'll see is that we've been trying to think through a campus approach at facilities like our Rochester facilities leveraging our government relations to really help bring companies into places like New York and West Virginia to support our future needs.
Colin Rusch -- Oppenheimer and Company -- Analyst
Great. Thanks so much, guys.
Operator
Thank you. Our next question comes from Jeff Osborne with TD Cowen. Please proceed with your question.
Jeff Osborne -- TD Cowen -- Analyst
Yeah. Thank you. Just had a couple of questions on that -- thanks for taking the time, Andy. The Georgia facility, I was wondering if you can give us an update on how the commissioning process is going.
I seem to recall that I was expecting that to be up and running, I thought in early August or July, and now it still seems like you're making gaseous hydrogen. So, I was just curious, have you actually liquefied anything at this point or run it at full theme? Is there any comments you can give us on utilization or capacity factors on how it's performing?
Sanjay Shrestha -- Chief Strategy Officer
Yeah. Sure, Jeff. So, again, I think we're fairly -- look, we feel very confident that we're going to be producing liquid in Q3. Right now, we're essentially going through ramping up electrolyzer, right? We've actually tried to electrolyze this one.
You know that we've been producing gaseous hydrogen there with our gaseous hydrogen plant. We're in a process of actually ramping up our liquefiers in a process of cooling down the liquefaction trains. So, again, that's why we're hosting our Analyst Day there on August 23, right, so that we can actually show to you all exactly what's happening there and what's going on. So, at the moment here, are we producing liquid? We're not producing liquid today, but we are essentially ramping up the electrolyzer on path to be able to produce that liquid.
And Jeff, one of the key things here, right, I do want to stress this one particular point is, obviously, look, and I'm just going to take the point that's an elephant in the room, if you would. We clearly recognize that we've been three to six months behind than what we originally wanted it to be. But having said that, this plant is still coming online in 12 months since we actually issued the EPC contract, number one. And number two, we also wanted to make sure this is a first-of-a-kind integrated electrolyzer liquefier on-site storage.
So, there are steps we want to make sure that we're taking from a safety standpoint, from the long-term operational benefit of the plant. So, long story and a quick comment, we are going to be producing liquid here in the month of August. We're very much looking forward to hosting you all on August 23, and we're essentially wrapping up the plant at this point in time.
Andy Marsh -- Chief Executive Officer
And filling trailers.
Jeff Osborne -- TD Cowen -- Analyst
Absolutely. Look forward to being there in person. Just one quick clarification on Georgia and then a second question. Is this -- you're in the release of those 2.5 tons a day, have you run at full steam on the electrolysis side?
Sanjay Shrestha -- Chief Strategy Officer
Yes, that is correct, Jeff. We actually have filled high-pressure tube trailers for third-party customer many times at that site. And the way we wanted to do that, right, and this is very important for us to do, make sure that we're running that force gas plant, optimize the gas plant, get the learnings from that gas plant, so that you can take all of that learnings from a control perspective, ramp up the electrolyzer perspective, all the safety perspective when you actually are now ramping up the entire 40 megawatt of electrolyzer to support 15 tons of liquid production. And Jeff, to a point where we've actually initiated expansion of that 15-ton now to a 30-ton liquid plant at the site because of how we felt about what has gone so far from a 15-ton production perspective.
Andy Marsh -- Chief Executive Officer
The electrolyzers aren't really anything we're really thinking much about. We know they work.
Jeff Osborne -- TD Cowen -- Analyst
Absolutely. To follow up with just on the hydrogen hubs, how are you positioned for that? And what do you think the timing of the awards are from the government process there?
Andy Marsh -- Chief Executive Officer
Jeff, I think the hydrogen hub and the IRA are really closely connected. There was a letter which was released by the State of New York, the State of Massachusetts, State of Connecticut, State of Maine, that to make this a nationwide hydrogen hub, the IRA regulations need to be -- for the PTC needs to be based in over a long period of time. I spoke to the New York Governor about that actually just yesterday. And it is -- I think we see more activity come the fourth quarter for some initial grants.
But for this to become a nationwide network, it's not just the hubs. It's the hubs coupled with the IRA. And this is something that if you read the letter the State of New York and the other states put in, the treasury really makes clear that if they really limit it, the IRA regulations, which I don't think will be the case, that the impact will be much more modest because the $9 billion, quite honestly, is a good deal of money. But it's not really what's going to drive a hydrogen economy.
It's kind of like I look at $50 billion for chip facilities seem like a lot of money, but you really need large support from other elements to make that successful. The same thing holds true for hydrogen. We expect some announcements in the fourth quarter, but it will be a little bit of dollars, and more and more will start flowing out.
Jeff Osborne -- TD Cowen -- Analyst
Thanks so much, Andy.
Operator
Thank you. Our next question comes from Ameet Thakkar with BMO Capital. Please proceed with your question.
Ameet Thakkar -- BMO Capital Markets -- Analyst
Hey, good afternoon. Thanks for taking my questions.
Andy Marsh -- Chief Executive Officer
Hello, Ameet.
Ameet Thakkar -- BMO Capital Markets -- Analyst
Just real quick. Just thinking about kind of the cadence of kind of cash needs for the balance of the year. It looks like between kind of cash flow from operations and your capex today, you've kind of -- you're kind of burned about $1 billion in cash. And I know you guys mentioned maybe $1 billion from the DOE program.
Would that be funded all at once and then kind of cover your kind of your Georgia, New York, and Texas plants? Is that how we should think about it?
Andy Marsh -- Chief Executive Officer
I'm going to turn the cash questions over to Paul here. Paul?
Paul Middleton -- Chief Financial Officer
Hey, thank you. Thanks for the question. I guess a couple of things I would share with you. First and foremost, when you look at the volume that we're projecting, it's almost double or more in the second half.
So, there was a pretty heavy investment in working capital preparing for all of these new offerings, scaling up electrolyzer, scaling up stationary, scaling up mobility solutions, pretty heavy investments in inventory. We actually expect that to come down. So, I expect to have that from an impact standpoint, either flat to actually generating cash for us in the second half. Second thing is when you look at, as Andy shared, all of the traction, we're making with growing volume as well as the cost down, that's going to impact our operating -- our margin profile.
So, that helps as well. So, you should see a softening of that in the second half. The short answer to your question is on the DOE program, we're -- until it's done, it's not done. But the timing of exactly how that will play will be -- to be determined in terms of the inflow.
We are actually working, again, as Andy mentioned, with other solutions as well. I think if you look at the next couple of years, there's going to be a combination of debt solutions from corporate debt to project finance, to enhanced ITC financings. And all of those things, you'll see more of -- from us in the coming months as we start to enroll some of those solutions. And so, it's going to come from one of those programs in the short term, midterm, and long term as we roll all of those solutions out.
Ameet Thakkar -- BMO Capital Markets -- Analyst
OK. And just one quick housekeeping question. In the investor letter, I know you guys reiterated kind of the revenue guide for the year. I didn't see that for the gross margins.
I was just wondering if you could kind of level-set us on that for the year. Thank you.
Paul Middleton -- Chief Financial Officer
Yeah. We didn't necessarily give specific updates on the full-year margin profile. But I think when you look at the second half, you're going to see tremendous sequential progress. I mean, it's going to be really -- you're going to see a big step function in Q3, the volume growth, and then even more substantial step function in Q4 as we deliver the back half.
It's probably in the 30%, 40% range of sales for the back half in Q3 and then kind of in the 50%, 60% range, giving you rough ranges there in terms of volume in the fourth quarter. And when you get to that high level of sales, it's very accretive. And especially when you think about the complement of equipment programs that are in there. So, we expect sequential growth and you're going to see strong performance and strong growth in the margin profile as we progress through the year.
Ameet Thakkar -- BMO Capital Markets -- Analyst
Thank you.
Operator
Thank you. [Operator instructions] Our next question comes from Amit Dayal with H.C. Wainwright. Please proceed with your question.
Amit Dayal -- H.C. Wainwright and Company -- Analyst
Thank you. So, Andy, you highlighted moving selling prices higher in your investor letter. Can you talk a little bit about which product offerings you're targeting first for this effort and then how this translates into the rest of our portfolio?
Andy Marsh -- Chief Executive Officer
Yeah. I will -- let me -- I'll highlight one platform that we think there's real opportunities because we have our capabilities far exceed the competition. We know and we've seen that as we've tested the market that there are real opportunities in the electrolyzer business. And that's a platform that we've seen that based on the fact that the demand is there and the supply when you really look at people's infrastructure doesn't exist, we think there is a good opportunity to raise prices.
And we know that because we have it and we've been winning orders. So, that's one area that's clear to me that there's real opportunities. So, I think that we've seen across all of our segments, again, because I think because of our unique position and our experience that there are more opportunities than we've been able to take advantage of the past. And look, it's really very closely tied to all the investments we've made in infrastructure with facilities, with our hydrogen plants, with our resources around the world that we sit at the table with a great deal of credibility that we can deliver, which I think uniquely positions us and which creates additional value for Plug.
Amit Dayal -- H.C. Wainwright and Company -- Analyst
Understood. Thank you so much. And then maybe for Paul, I know you are anticipating significant improvements on the margin side in the second half. The cadence of this, are we looking at sort of breakeven levels in 3Q and then moving to positive gross margin in the fourth quarter? Or how should we think about this, Paul?
Paul Middleton -- Chief Financial Officer
Yeah. I don't know if it will be quite breakeven in Q3, but it should be low-teens kind of range. And I think you're going to -- you absolutely will see positive in Q4 and pretty meaningful accretion on the rate in Q4 as these cost downs continue to kick in. And equally more important, the sales volume that we're talking about, how substantial it is, that will be very accretive since it's the composition of equipment.
Amit Dayal -- H.C. Wainwright and Company -- Analyst
And longer term, as your infrastructure comes online, Paul, I mean, is there a possibility where gross cost of goods sold will actually begin declining for you guys? So, just trying to see from a margin perspective, how we should think about it as the infrastructure around all of these products comes online.
Paul Middleton -- Chief Financial Officer
Yeah. I mean, I'll give you an analogy. When we built and designed the Rochester facility, we thought we could do kind of two gigawatts of various products between GenDrive product and stacks and electrolyzer products. The learnings we've gone through, we now think we could do anywhere from four to five times that volume through that facility.
I mean, you can only imagine that the overhead leverage that you can get out of that, by leveraging that up. And we think that's going to happen very fast. So, we're -- to your point, the infrastructure we've built and scaling the range of things that we're doing, it's going to be substantially accretive as we continue to ramp up the business just in overhead level. That doesn't even account for supply chain cost reductions.
I mean, Andy mentioned today, we spent three hours today just as we do all the time, working on operational enhancements, focus on things. And so, you've got supply chain cost downs, you've got overhead leverage and then as Andy mentioned before, there's various products that we're looking at price management around and ASP management. So, all those things combined is what's going to drive that margin profile in the coming quarters.
Amit Dayal -- H.C. Wainwright and Company -- Analyst
Understood. That's all I'm doing. Thank you so much.
Paul Middleton -- Chief Financial Officer
Thanks.
Operator
Thank you. Our next question comes from Greg Lewis with BTIG. Please proceed with your question.
Greg Lewis -- BTIG -- Analyst
Yeah. Hey, thank you.
Andy Marsh -- Chief Executive Officer
Greg, good afternoon.
Greg Lewis -- BTIG -- Analyst
Yeah. Thanks. My first question was around how we should be thinking about the cadence of electrolyzer orders as we kind of go forward from here. I mean, I guess projects are going to continue to be big and lumpy.
But is the -- are kind of the more smaller projects building a base that could kind of maybe smooth out the cadence of orders here over the next 12 months? Or I mean, what's kind of -- what are we seeing out there in the market?
Andy Marsh -- Chief Executive Officer
Greg, I'm going to turn that over to Sanjay.
Sanjay Shrestha -- Chief Strategy Officer
Thank you, Andy. So, Greg, I think here is how you should think about it, right? So, I think it's going to be a mix of three key things, right? One is our continued strategic stack sale, which actually carry good pricing and good margin for us. Second piece of that is our five-megawatt containerized turnkey product, which really makes electrolyzer easy for our customer, right? Now, with the five-megawatt product versus stack, there is sort of your site acceptance tests and things like that. Fabrication management, that's a piece we're continuing to refine and continue to get better at.
Then you got large-scale projects, which goes under percent of the completion revenue accounting. And as you keep adding more and more of those, that gives you that stable base, right? But obviously, in 2023, you've seen Q1 versus Q2 be a lot more lumpy, but you will see that pick up in Q3 as you start to see more contribution from some of the -- I mean, some project business, some incremental electrolyzer business, as well as some of this high megawatt project business. You will see that step change again in Q4. So, from the bookings cadence standpoint, if you're looking next 12 months out, you should see a lot of five-megawatt containerized product booking, you should see a lot of stack sales opportunity booking, and you should really see substantial large-scale project bookings that we've talked about, right? On our last earnings call, we said we're actually at the very final phases of major project, announced one.
Clearly, there's two more that we're going through legal documentation right now. So, these are the type of the things you should see, which will make 2024 smoother. And as more and more of this project goes into the backlog and the bookings, then you actually will have that stable base with five-megawatt and the stack build kind of adding on top of that. That's how you should think about the stack of how that revenue should unfold for that business.
Greg Lewis -- BTIG -- Analyst
Super helpful. Thank you very much.
Sanjay Shrestha -- Chief Strategy Officer
Of course. Thanks, Greg.
Operator
Thank you. Our next question comes from Kashy Harrison with Piper Sandler. Please proceed with your question.
Andy Marsh -- Chief Executive Officer
Hi, Kashy. Good evening.
Kashy Harrison -- Piper Sandler -- Analyst
Hey, Andy. Good evening, team, and thanks for taking the questions. So, I wanted to ask about the timing and then value of any and all financing transactions that we're discussing here. Specifically, how much capital do you think you're going to raise either in the second half of 2023 or 2024 from -- pick your source: DOE, corporate bonds, ITC monetization infrastructure funds.
Like what is the absolute amount that we're looking for here? Is it $0.5 billion, $1 billion, $2 billion? Just trying to get a sense of that.
Andy Marsh -- Chief Executive Officer
I'm going to let Paul take that one.
Paul Middleton -- Chief Financial Officer
Yeah. I guess what I would tell you is when we look at debt capital and I think about it in kind of like the next 18-month time frame and across the various sources that you made reference to, I'm targeting $1 billion to $1.5 billion. That's where I'm targeting. So, in that time frame and exactly the timing of when it rolls in and how that to be determined.
But we're pretty confident. I mean, we could go get that today. I mean, it's not that we don't have access to debt capital. We just want to -- we're being very opportunistic in thinking about the best terms, best cost, best -- all the different dynamics.
There's debt available. It's just -- I've had term sheets and lots of players. It's just we're trying to be very thoughtful about what we do and when we do it. But in that time frame, that's roughly kind of what I'm thinking about in terms of magnitude.
Kashy Harrison -- Piper Sandler -- Analyst
That's helpful, Paul. Thanks for that. And then maybe just a quick follow-up question for Sanjay on Georgia. As you indicated, it's taken a little bit longer to hit the targeted capacity.
Can you walk us through exactly what the gap has been more recently between the Analyst Day back in June and what's actually happened? And then when Georgia is online, will that -- is the output for that facility earmarked for materials handling? Or is it earmarked for stationary power?
Sanjay Shrestha -- Chief Strategy Officer
Let me take the second part of the question first, right? It's obviously earmarked for our internal use and for both of those applications, right? So, that's the first piece. Now, in terms of the timeline here as to -- again, I think from last we met versus where we are right now in the month of August here, we are fully planning to produce liquid here this quarter and certainly this month and hosting the Analyst Day on the 23rd, right? So, we've actually -- as we continue to make sure that what is the most optimum way to run the plant, there are learnings that we're having, right? Now, we have a choice to make. Do you keep running or do you actually implement some of those learnings? So, there are things that we found out that we could do better from a rectifier energization perspective. There are learnings that we have from the stack perspective that we're actually going to make the operation of the plant better, right? So, as we look to implement some of those changes, learnings from our gas plant, that certainly has had some additional time impact here, right? And again, one of the things we want to make sure, right? So, for us, getting George up and running and getting production in Georgia, it also has to be done the right way and really leverage that learning as we start to think about building our plant in Texas, as we're building our plant in New York as well, right? So that's essentially what I would say.
And also, another thing you need to kind of keep in mind, right, is we've been pushing -- just so you guys know, in order to be able to get this plant built in 12 months versus what the industry average of 48 months is, we've actually been pushing folks, but it's the month of July and August. And on some level, the productivity does go down because it's 100 degrees outside and people have to actually take break and really be able to cool down and then go back on site. And just to give you a sense, the team was on-site at 4:30 a.m. today, right, just to make sure that things were happening.
So, that's another factor. There's nothing anyone can really do about that, reduce productivity in the month of June, July, and August in Georgia, and that certainly has played a bit of an impact here as well. Would you add anything to that?
Andy Marsh -- Chief Executive Officer
I would just wear shorts to the Investor Day if that have been --
Kashy Harrison -- Piper Sandler -- Analyst
Thanks for that. If I could sneak one more in. Andy, in the prepared remarks, you talked [Inaudible] percent of 13%. I was wondering if you or Paul could go into some details on what these are exactly.
And then how should we think about those items over the course of the year?
Andy Marsh -- Chief Executive Officer
Great. Kashy, I'll hand it over to Paul.
Paul Middleton -- Chief Financial Officer
Yeah. So, I mean, I guess what I would say is, I'll just give you a microcosm example. When you're designing something that's new that's never been done before, then you're trying to manufacture and scale it in mass quantities. Obviously, you're going through an incredible learning code really fast.
So, sometimes we learn like certain materials in terms of how they perform and the product and when we turn -- we have -- fortunately, we've got a great, broad platform to be able to test the product between the customers we're selling them to, as well as in the case of electrolyzers, our own green hydrogen plant. And so, we're able to accelerate that learning curve. But when you run into the range of things that we're launching and the scale of pace and all those things, you kind of compound those things. So, some of it is material sometimes in terms of how it works.
Sometimes, it's the manufacturing processes in terms of how it works, your learnings there. It's those kind of learning curves that you go through. The good news is we feel like, in particular, many of these things, we've kind of gotten through those humps and curves. And they're not lessons that you learn again, right? So, we're able to kind of course correct and go through those learnings quickly and redirect.
So, that just gives you a microcosm example of some of the kind of things that's included in those costs.
Kashy Harrison -- Piper Sandler -- Analyst
Thank you.
Operator
Thank you. Our next question comes from Sam Burwell with Jefferies. Please proceed with your question.
Andy Marsh -- Chief Executive Officer
Hi, Sam.
Sam Burwell -- Jefferies -- Analyst
Good afternoon, Andy.
Andy Marsh -- Chief Executive Officer
How are you doing?
Sam Burwell -- Jefferies -- Analyst
I'm doing well. Thanks for squeezing me in. I'll make it quick. You guys obviously put out that letter on the 45 to the powers that be recently and laid out your case convincingly in my view at least, but it seems like the debate or like the conflicts, the intracorporate conflict, if you will, is on additionality with the NextEras of the world wanting it.
You obviously don't for reasons that make a lot of sense. But with that as a backdrop, like what do you guys consider to be a win on additionality, like it being put to rest forever? Or is it still a win if additionality is a requirement that gets phased in over the next, like five-plus years?
Andy Marsh -- Chief Executive Officer
So, Sam, what -- I'm going to take a step back and say I stand with Senator Carter and Senator Manchin where Senator Carter wrote the bill, but additionality was not included. So, I'm going to stand by that. I would just add the longer additionalities pushed out the better it should be. But it -- when people ask me that question, we've done a lot of work, and you may have seen some of the work.
But essentially, it's bad for U.S. jobs, it's bad for climate and it's bad for national security. And one item that people don't really talk a lot about, and I think you'll start seeing articles about this. This is really at heart.
I know Senator Manchin took me aside and said, Andy, at heart, this is a national security decision for United States continue to be energy independent. And to put requirements on the hydrogen industry, which the government has not put on their own buildings as they drive to be net zero, just doesn't make sense. So, the longer it's out, the better. But I see no reason for Plug to publicly take a compromised position.
Sam Burwell -- Jefferies -- Analyst
OK, got it. That's all for me. Thanks.
Andy Marsh -- Chief Executive Officer
OK. Thanks.
Operator
Thank you. Our next question comes from Chris Dendrinos with RBC Capital Markets. Please proceed with your question.
Chris Dendrinos -- RBC Capital Markets -- Analyst
Yeah. Thank you. Hey, I guess maybe just to start here, so in the investor letter, I think you guys all kind of mentioned that you had pushed out some of the timing on some of these other facilities, maybe six months or so. Can you just provide, I guess, some additional commentary on that? Is it really just kind of level-setting expectations and then giving yourself some more cushion? Or are there some maybe delays in construction that we should be thinking about? Thanks.
Andy Marsh -- Chief Executive Officer
I'm going to let Sanjay answer that one, Chris.
Sanjay Shrestha -- Chief Strategy Officer
Yeah, sure. Chris, look, I'm glad actually you asked that question and give us an opportunity to talk about exactly what's going on here, right? So, in the case of Texas, we wanted to make sure that we were going to get a lump-sum EPC contract. That was very important because that allows you to go and get bankable deals done, make the project bankable. It really starts opening up project financing, and we got to do that with a partner like [Inaudible], right? Now, that contract negotiation, and again, this is a first of a kind, hasn't been done in the green hydrogen industry.
It took about six to nine months instead of probably a typical three to six months, right? So, we have not executed the contract. EPC is going to start to kick off. So, instead of actually kicking off that EPC in the month of March, it is now in the month of July. So, that's really what has happened here.
So, instead of that plant coming online in Q2 of 2024, now it's the second half of 2024. That's what happened here. And by the way, we felt like that extra three to six months is well worth it. It is the right thing to do from basically being able to get a contract like this so that it sets the template and the standard of how this project needs to be executed.
Otherwise, working and doing all the things that we did in Georgia, all that learning, we would not have taken advantage of that. In terms of New York, it all comes down to substation. We've been having fantastic collaboration with NYPA as well as National Grid. But as it stands right now, that substation is probably going to get energized only in Q3 of 2024.
Until the substation is energized, we cannot bring the liquid plant online. We have procured all the long lead time items. This is our electrolyzer. This is our liquefier.
So, those issues aren't the bottlenecks. Permitting is not the bottleneck. There's nothing else like that, right, which is why we just wanted to make sure that we articulated why Texas is -- and second half '24 -- why New York is second half '24. And as it relates to Louisiana, we just wanted to make sure that we're being also thoughtful about what that right structure of the EPC contract needs to look like.
We've been working hand-in-hand with our partner, Olin. And instead of that plant also being end of 2024, based on where we are today, realistically -- end of 2023, it is now going to be Q1 of 2024. That's really what has happened here.
Chris Dendrinos -- RBC Capital Markets -- Analyst
Got it. OK. Yeah, Thanks for that. And then I guess maybe just on my follow-up here, and I apologize because I think my phone or Kashy's might have cut out during his last question.
But in the letter here, there's -- I think you mentioned $45 million of incremental investment costs kind of in the quarter for growth. Is that like investments that are going to have sort of pay dividends going forward? Or is that sort of things that you had to do in the quarter to true things up and, I guess, get infrastructure where it needed to be? I guess, how should we think about the benefits of that incremental spend?
Paul Middleton -- Chief Financial Officer
Yeah. Well, I mean, the short answer to your question is absolutely yes. I mean, when we think about -- just to put some context, sales of our electrolyzers will be four times the size in volume than we did in the first half. And as we grow into next year, the volume is growing dramatically.
And this is a product that's very quickly generating a profitable product margin that is incredibly attractive. And it's one of the many areas that we have opportunities for this ASP management because of our unique position in this space. So, the short answer to your question is this absolutely has value in helping us propel these incredibly significant platforms that can be incredibly accretive to the company, and you're going to see the benefits of that. So, hopefully, that helps provide the color you're looking for.
Chris Dendrinos -- RBC Capital Markets -- Analyst
Yeah. I appreciate it. Thank you.
Operator
Thank you. Our next question comes from Andrew Percoco with Morgan Stanley. Please proceed with your question.
Andrew Percoco -- Morgan Stanley -- Analyst
Good afternoon. Thank you so much for taking the question.
Andy Marsh -- Chief Executive Officer
Hey, Andrew, how are you doing?
Andrew Percoco -- Morgan Stanley -- Analyst
Doing well. I'll just squeeze one quick one in here. Most of my -- mine have been asked. But it seems like you're pushing pretty hard against additionality.
And I'm just curious, what in a world where additionality is required? What does that mean for your business and margins in the near term? Maybe just to ask it slightly differently, what are you currently assuming in your margin guidance in 2024 and 2025 as it relates to the hydrogen tax credit? Thanks.
Andy Marsh -- Chief Executive Officer
So, Andrew, let me take a step back and remind folks, the plants that Sanjay has rattled off; Georgia, Texas, New York, Louisiana, all that work started and start moving forward before the IRA. I'll let Paul answer the second part of that question. But we have real demand for that hydrogen regardless of how the regulations are written. I take the reason.
I take such strong opinions about the IRA. Plug along with people like Cummings, Air Liquide, we're actually deeply involved in helping architect what the language was. And I can tell you, it never came up. And so, maybe that's why I might be -- feel quite strong about it because it really shouldn't even be a debate at the moment.
But let me -- let Paul talk about the margin profiles and how he thinks about it.
Paul Middleton -- Chief Financial Officer
I didn't hear the complete context of your question, though.
Andy Marsh -- Chief Executive Officer
What was the margin impact, Paul, if we don't get the production tax credit?
Paul Middleton -- Chief Financial Officer
Well, $3 -- I mean, the way it's phrased is holistic, $3 a kilogram is meaningful. We're not going to knock it at all. We're going to get a substantial portion. And if we don't qualify, who will? So, I think we've got a unique position in terms of all of the relationships we have in Washington to help shape this in a meaningful way for all the things that Andy talked about.
And so, this year, he talked about Georgia coming on. We're expecting to start accruing that benefit right away. And so, it's going to have impact this year. And as we move into next year and turn on to additional facilities, it will have even substantially more impact.
And so, when you talk about $3 a kilogram, the majority of that, if not all of it, in the short term and midterm, the majority of it, we get to recognize and appreciate. So, that's incredibly impactful for the near term.
Andy Marsh -- Chief Executive Officer
So, I think it's fair to say, Paul, even without the IRA, our costs go down to one-third of what they are today.
Paul Middleton -- Chief Financial Officer
Yeah. And as most of you guys know, we started our green hydrogen endeavor even before the IRA got passed because it is so incredibly, economically impactful, and accretive to us to produce this at such a much substantially lower cost. So, overall, we're on the right path and right footing, and this will be impactful, and this is going to be incrementally accretive and additive to the overall equation.
Andrew Percoco -- Morgan Stanley -- Analyst
OK. Thank you. I'll leave it there.
Andy Marsh -- Chief Executive Officer
Thank you.
Operator
Thank you. Our next question comes from Abhi Sinha with Northland Capital. Please proceed with your question.
Andy Marsh -- Chief Executive Officer
Hi, Abhi.
Abhi Sinha -- Northland Securities -- Analyst
Hey, thank you for squeezing me in. Just one quick one. So, overall, I keep getting this -- a lot of news here from like whether it's different projects in Australia, Europe, and whatnot. So, I mean, I feel like we have a lot of incremental additive value to the existing guidance here.
But of course, there's no change in guidance, not only 2023, but even for longer term. And so, I'm just wondering at least if you look at 2024 or 2025, what projects you could point to that if materialize, could really give the scale on the higher end of the guidance or exceed the guidance. I mean, what should we hang on --
Andy Marsh -- Chief Executive Officer
No. You know, Abhi, I've been doing this for 15 years, and I did pretty good on revenue over the years. And I think we're going to stick by the guidance we provided already and it's something really good happens, and we're certainly engaged around the world. And Sanjay talked about the sales funnel for electrolyzers, which are real.
We're driving every day to make the number bigger. But what we've said in the past, for next year, and what we've said for 2025, I think we'll just stand behind that today. Good try, though.
Abhi Sinha -- Northland Securities -- Analyst
All right. Fair enough. Thank you.
Andy Marsh -- Chief Executive Officer
OK. All right.
Operator
Thank you. Our next question comes from Tom Curran with Seaport Research Partners. Please proceed with your question.
Tom Curran -- Seaport Research Partners -- Analyst
Just two quick ones. First, Andy, Paul, just what are some of the main factors that have obstructed the services divisions ability to get closer to achieving a breakeven gross margin by this point? And how has each of those challenges negatively surprised you, either, just in terms of its nature, the fact that you didn't see it coming or maybe it's severity? And then given that what really undergird your confidence from here that services will nevertheless be on track for your new profitability improvement time frame?
Andy Marsh -- Chief Executive Officer
Yeah. So, Tom, let me tell you why. When I look at the challenge, and the challenge really comes down to -- I'm going to give you the technical challenge. And then I'm going to give you the -- our view of why we believe we have good solutions.
The technical challenge is really associated with the customers, and this is good or taking more power out of our units than they originally did. And that means we need to put more power into the box to be successful. Most of this is involved with material handling. The second item is fuel cells don't like to start and stop all the time.
And we understand and have demonstrated that we know how to manage that, which should be another differential advantage long term for Plug. We have about five or six sites that we've -- now I'm going to talk about the old fleet and the new fleet. We've taken about five or six sites, which we have implemented all the knowledge we've accumulated how to add more power, how to manage all these start/stops. And we see that the data shows it works.
And our biggest challenge has been how to implement these changes rapidly, it takes people. And that's actually been one of the challenges to get that right. The second one is, with our metal stack and with what we've done, we can pack so much more power into a unit that we will never run into this issue again. So, I feel very, very confident.
And I -- this is not a commitment, but I said in a meeting yesterday during a review I see no reason long term the service business can't be more profitable than the product.
Tom Curran -- Seaport Research Partners -- Analyst
Great. And then, you know, my follow-up would then be sticking with gross margin, turning to the Equipment division. Where are gross margins currently for each of the major product lines? So, by major, I mean, material handling, electrolyzers, on remobility, cryogenic storage transportation, and stationary power. Just what are the run rate targets for each that -- as you hit them on a blended basis or what you expect to enable you to get to that target division average gross margin goal?
Paul Middleton -- Chief Financial Officer
Yeah. There's a lot packed in your question, given the range of things that we do. First and foremost, we have, historically, in my public financials, you can look back and see, we've hit 30% plus gross margins in material handling. And when you look at the breadth of what we're doing there, it's all about continuing to drive that leverage and that will continue to be accretive as we grow that.
Electrolyzers is the early phase of what we're doing there. As I mentioned, we got four times the sales in the second half. But it's already in the 20s, and we'll quickly grow up to that 30% plus. When you look at our long-tenured -- our long-term margin goals of 30% going up to 35%, we expect all the equipment business to get there just to give you some context.
And so, they're all at different phases, especially some of the newer stuff like stationary as an example. We're selling our first systems as we speak. So, those are very early in that process. The good news is, it's all about scale.
When you look at how fast we're going to ramp these different businesses, it provides that opportunity to scale them from a volume standpoint, from a supply chain standpoint across those boards. So, cryogenic, the trailer, and the tank business. I mean, those are existing businesses that are in the mid-20s to high -- upper 20s. So, as we launch -- and as we're launching new products like mobile refuelers and hydrogen trailers, those are actually incredibly accretive in the market, and that will be north of 30 out of the gate.
So, I don't want to get too descriptive because I'm sure there's customers listening to a lot of these calls, but I would just say we have a mix of products today that some more mature that are already in that range and many that are poised, if they're not there yet, we'll get there very quickly. So, that -- hopefully, that gives you a little bit of color and context.
Tom Curran -- Seaport Research Partners -- Analyst
Very helpful, Paul. Go ahead, I'm sorry.
Andy Marsh -- Chief Executive Officer
No, please go ahead, Tom.
Tom Curran -- Seaport Research Partners -- Analyst
That was a very helpful overview. And I was just going to thank you for taking the same marathon approach to your call that the BOSS does to his shows.
Andy Marsh -- Chief Executive Officer
That's funny, Tom. On that note, let me tell the analysts that we're really looking forward to seeing you at -- in Georgia -- on August 23. It should be -- you'll be able to see -- and using the BOSS analogy, Tom, you'll be able to see a plant like nowhere else in North America. So, it's well, well worth coming to.
And on top of that, very shortly, you will be getting a letter about our Plug Power Symposium, which will be held at our Vista facility. Again, as I mentioned, our astonishing facility that we have about 10 minutes south of us here in Latham. So, thank you, everyone, for staying on. And I look forward to seeing all the analysts down in Georgia.
Bye now.
Operator
This concludes today's teleconference. [Operator signoff]
Duration: 0 minutes
Call participants:
Teal Hoyos -- Senior Director, Marketing and Communications
Andy Marsh -- Chief Executive Officer
Bill Peterson -- JPMorgan Chase and Company -- Analyst
Paul Middleton -- Chief Financial Officer
Eric Stine -- Craig-Hallum Capital Group -- Analyst
Sanjay Shrestha -- Chief Strategy Officer
James West -- Evercore ISI -- Analyst
Manav Gupta -- UBS -- Analyst
Colin Rusch -- Oppenheimer and Company -- Analyst
Jeff Osborne -- TD Cowen -- Analyst
Ameet Thakkar -- BMO Capital Markets -- Analyst
Amit Dayal -- H.C. Wainwright and Company -- Analyst
Greg Lewis -- BTIG -- Analyst
Kashy Harrison -- Piper Sandler -- Analyst
Sam Burwell -- Jefferies -- Analyst
Chris Dendrinos -- RBC Capital Markets -- Analyst
Andrew Percoco -- Morgan Stanley -- Analyst
Abhi Sinha -- Northland Securities -- Analyst
Tom Curran -- Seaport Research Partners -- Analyst
