What happened

Shares of Plug Power (NASDAQ:PLUG) plummeted 5% in 12:30 p.m. EDT trading on the Nasdaq Tuesday. It's not hard to figure out why.

As Reuters reported this morning, General Motors (NYSE:GM) is teaming up with Wabtec (NYSE:WAB) to supply "electric batteries and hydrogen fuel cell systems" for Wabtec's train locomotives, with deliveries set to begin as early as 2023. 

Big red arrow going down over a stock chart

Image source: Getty Images.

So what

Historically, of course, General Motors has stuck to building cars and trucks powered by gasoline and diesel fuel, while Plug Power forged ahead developing new power technologies reliant on fuel cells powered by hydrogen gas. In recent years, however, GM has shifted its interest toward electric propulsion -- even promising that by 2035, it will cease production of internal-combustion engine cars and produce only electric vehicles (EVs).

Now, GM is taking another step in this direction -- and stepping directly on Plug Power's turf -- by developing Ultium batteries and fuel cell power systems for trains, too.

Now what

That sounds like bad news for Plug Power, which was hoping to be the 800 lb. gorilla in fuel cells, with the biggest market capitalization in the industry. But now here comes GM tromping all over Plug's stomping grounds, and bringing to the fight a market capitalization five times as big as Plug's!

That sounds like bad news for Plug Power, but it might be even worse news for another fuel cell name, Ballard Power Systems (NASDAQ:BLDP). While Plug has ventured into producing hydrogen gas for fuel cells and fuel cells for cars, it's main business at present is producing fuel cells to power forklifts and similar vehicles. Ballard, in contrast, is much more focused on heavy-duty fuel cell systems to power trains and buses. As such, I'd say Ballard has even more to worry about than Plug from GM's move. 

So far today, Ballard Power stock is down only 3.5%, suffering less damage than Plug Power, but Ballard Power stock investors should be on alert. Once investors figure out where this train is heading, Ballard stock could be in line for an even bigger bruising.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.