What happened
Shares of hydrogen fuel cell company Plug Power (PLUG -5.17%) jumped 5.7% through 10:50 a.m. ET on Tuesday after the company announced a new service that it thinks could open up 25% of the forklift market to it.
So what
Plug describes its GenKey service as a turnkey product "to streamline the entire hydrogen and fuel cell adoption process," including fuel cell backup power for a warehouse, fuel cell engines to power forklifts, a hydrogen fuel supply for those forklifts, and aftermarket servicing of all the above.
Previously, Plug seemed to offer GenKey only to large warehouses, but today it said it is expanding GenKey by offering it to warehouses that operate between 40 and 100 electric forklifts. About 25% of all forklifts in the U.S., says Plug, are sold to warehouse operations with fewer than 100 of them.
Now what
It's not immediately clear how this news will affect the company's bottom line. Although research in this area seems scant, what little I've been able to uncover suggests that Plug's share of the global forklift market might be as little as 2% or less.
That sounds like bad news, but compared to the 25% market opportunity that Plug is proclaiming now, it actually indicates management might see some upside from this announcement. In theory at least, it seems to imply the potential to grow its market share by 12 times or more.
This upside will not arrive immediately, if ever. While Plug says it is already accepting GenKey orders from smaller warehouses, it doesn't expect to begin delivering on those orders before 2023 in the U.S. And GenKey for smaller European customers has not yet begun.
Longer term, most analysts still see no profits for Plug Power before 2025 at the earliest.
