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Hi, my name is Brett Kearney and I am a Research Analyst at Gabelli Funds. Earlier this month, we visited with Plug Power at their headquarters in Latham, New York. Plug Power is a leading manufacturer of fuel cell power systems and hydrogen fueling infrastructure serving primarily the materials handling market but also with new applications in the commercial vehicle market. In addition to their zero greenhouse gas emissions profile, hydrogen fuel cells offer several productivity advantages relative to other clean energy sources for heavy-duty vehicles, such as battery electric offerings. These include quick refueling times of just 2 minutes relative to the 10-20 minutes it takes to swap out each depleted battery with a fully charged one after every 6 hours of use. The company’s top customers are Wal-Mart and Amazon, and we estimate that Plug Power’s fuel cell engines are used in forklifts at nearly one-third of Wal-Mart’s 42 distribution warehouses across the country. Plug Power has also recently expanded into the last-mile delivery vehicle market and has won a contract to provide DHL with fuel cells for 100 of its delivery vans in Germany. Longer-term, the company sees an opportunity to capture a greater share of the approximately 5,000 last-mile vans and trucks that DHL replaces each year. When we toured the company’s factory in Latham, we noticed it was running at only about 25% of total utilization, implying ample capacity as Plug Power ramps production to support its recent wins in the new market of last-mile delivery vehicles as well as test programs for ground support equipment at airports. Overall, we are excited about the potential that hydrogen and fuel cells can play in providing a greener energy source for our planet over the next several years, and we look forward to continuing to share our learnings in this new space with you over time.
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