Nel Can Afford to Wait for the Hydrogen Boom — the Question Is How Long

Sound familiar? You plan a three-month renovation and it ends up taking a year — a bit like Nel, where the hydrogen market the company is betting on has been taking off later than hoped for years. Psychologists call it the planning fallacy: we almost always underestimate how long things take, even when we have misjudged it many times before. Investors are not immune. Quite the opposite: whoever bets on an industry of the future is counting on the day the market “finally takes off” — and rarely on that day slipping a little further every year.

Nel is a stock where this thinking error is easy to watch in action. The Norwegian maker of electrolysers — machines that use electricity to turn water into hydrogen — writes in its October 2026 outlook, as it did before, that it wants to be ready to return to its growth strategy “when the market returns.” So let's make a deal: we won't ask whether the hydrogen market is coming. We'll use the actual reports to work out how long Nel can afford to wait for it. The tension running through this analysis: Nel has cash to wait and no debt — but several items on its balance sheet lose value with every month of waiting, and the cash is now shrinking faster than before.

What Nel actually does — hydrogen from power and water

Oslo-based Nel ASA builds electrolysers. Think of an electrolyser as a kettle that doesn't heat the water but uses electricity to split it into its parts — hydrogen and oxygen. If the power comes from wind or solar, the result is hydrogen without CO₂ emissions that refineries, steel mills, fertilizer producers or fueling stations can use. Nel builds two types. Alkaline technology (the Nel Alkaline Electrolyser division, with its plant in Herøya, Norway) is the older, rugged option for large industrial sites. PEM technology (the Nel PEM Electrolyser division, with its plant in Wallingford, Connecticut) uses a polymer membrane and responds faster to fluctuating renewable power. The same technology also makes breathable oxygen aboard submarines — a small niche business with repeat orders, more on that shortly. The company traces its roots back to 1927; today's company was formed in 1998.

As of September 30, 2026, Nel had 309 employees, 13 percent fewer than a year earlier (354). The fueling-station business is gone: it was spun off in 2024 as Cavendish Hydrogen ASA and listed separately; Nel sold its last Cavendish shares in the third quarter of 2026 for about NOK 8 million. Every figure in this piece therefore refers to the remaining electrolyser business. The fiscal year matches the calendar year, and Nel reports in Norwegian kroner (NOK). For scale: at the European Central Bank reference rates of October 15, 2026, one euro was worth NOK 10.65 and $1.1208, which puts one dollar at roughly NOK 9.5.

One point matters for the evidence trail: Nel does not report to the U.S. securities regulator, the SEC. The ticker NLLSF is merely a secondary over-the-counter quote in the U.S. with no reporting obligation of its own; the stock's home is Euronext Oslo Børs under the ticker NEL. All evidence in this analysis therefore comes from the company's own reports — the audited Annual Report 2025, the reports for the second and third quarters of 2026, the results presentation and its stock exchange releases.

How the stock landed on our desk

Through the forum ranking of the German finance portal wallstreet-online — the list of stocks German retail investors discuss most — as of September 25, 2026, where it appeared under its U.S. symbol NLLSF. A list like that measures attention, not quality. Nel has been a fixture on German message boards for years because, for many investors, the stock embodies the promise of hydrogen. The first edition of this analysis appeared in September 2026, based on the half-year report; this edition has been updated for the third-quarter report of October 15, 2026. The closing price in Oslo was NOK 2.06 on September 25, 2026, and NOK 2.02 on October 15, 2026, the day of the quarterly report. That is slightly below what the largest shareholder paid a year and a half earlier — more on that shortly.

There was no shortage of talking points in 2026: in May, Nel launched a new generation of pressurized alkaline electrolysers; in June it settled a lawsuit in California and its CEO resigned. September brought a framework agreement with the Scottish assembly partner Hydrasun and submarine orders from U.S. group Collins Aerospace totaling about $20 million; October brought a memorandum of understanding with Rheinmetall on decentralized synthetic fuel production. We traced a similar pattern of a big promise and a long wait for the breakthrough in our stock analysis of fuel-cell maker Ballard Power — Nel sits one step earlier in the same value chain, where the hydrogen is made in the first place.

The numbers over the years — given their due

First, what genuinely speaks for Nel: the balance sheet carries no bank debt. As of September 30, 2026, it held NOK 1,078 million of unrestricted cash, plus NOK 144 million of restricted deposits backing bank guarantees. There are no bank loans; the only interest-bearing obligations are leases totaling NOK 209 million. Equity came to NOK 3,441 million, or 78 percent of total assets. In March 2025, the South Korean engineering group Samsung E&A bought in for NOK 353 million and has held 9.09 percent ever since. And PEM orders are picking up: NOK 245 million in the third quarter of 2026, almost six times the level a year earlier (NOK 43 million).

Now the multi-year view. Revenue from the continuing electrolyser business rose from NOK 436 million (2021) to NOK 708 million (2022), NOK 1,350 million (2023) and NOK 1,390 million (2024) — then fell to NOK 963 million in 2025, down 31 percent. EBITDA, roughly what the day-to-day business throws off before depreciation, interest and taxes, was negative in all five years: minus 306, minus 428, minus 272, minus 173 and minus NOK 275 million.

The bottom line for 2025 was a net loss of NOK 1,265 million. Most of that is write-downs, which cost no cash but tell you something: NOK 361 million on production equipment at Herøya and NOK 439 million on goodwill and technology from the acquisition of what is now the PEM division. The explanation in the annual report is remarkably candid — Nel's own next-generation technology is likely to weaken the outlook for the existing platforms. In other words, Nel wrote down part of its old factory because the next generation is coming. Hold on to that thought; it comes back in the warehouse.

The third quarter of 2026: PEM grows, the alkaline business falls away

On October 15, 2026, Nel reported its figures for July through September. Revenue fell 63 percent from the prior-year quarter to NOK 112 million. EBITDA came to minus NOK 93 million after minus NOK 37 million a year earlier, and the net loss to NOK 141 million after NOK 85 million. For the first nine months of 2026, that adds up to NOK 413 million of revenue, 35 percent less than in the prior-year period (NOK 633 million), and a net loss of NOK 473 million. For comparison, the quarter before: second-quarter 2026 revenue had been NOK 153 million and EBITDA minus NOK 155 million — weighed down by NOK 70 million for the settlement with Iwatani Corporation of America, which had sued in February 2024 over hydrogen fueling stations in California. The agreed $7.5 million has now been paid: per the Q3 report, about NOK 75 million went out for it in the third quarter.

Behind the group figure are two completely different stories. The PEM division grew revenue 65 percent to NOK 89 million, driven by containerized turnkey systems; its EBITDA improved by NOK 10 million to minus NOK 24 million. The alkaline division, by contrast, booked only NOK 23 million of revenue, down 91 percent from NOK 249 million in the prior-year quarter, when large projects were still being delivered. Its EBITDA swung from plus NOK 26 million to minus NOK 41 million. Nel writes that the fixed costs of underused production at Herøya will weigh on results until more orders come in.

The CEO put the bright side front and center in the stock exchange release:

“Strong growth in PEM revenue and order intake in the quarter, continuing into Q4, reflects improved project execution and a competitive product.”

— Håkon Volldal, CEO, Q3 2026 stock exchange release of October 15, 2026

That checks out: group order intake rose to NOK 253 million, 4.4 times the prior-year quarter (NOK 57 million), 97 percent of it from PEM. A large part came from a niche that has little to do with a hydrogen boom: Collins Aerospace ordered PEM stacks for oxygen generation aboard U.S., British and French navy submarines, totaling about $20 million, for delivery in 2027 and 2028. After quarter-end, an order of about $12 million from an unnamed U.S. technology company followed, which only counts in the fourth quarter. The memorandum of understanding with Rheinmetall of October 13, 2026, on the other hand, is not an order but an agreement to explore opportunities together.

In the results presentation, which Nel held the same morning as a webcast with Q&A, management describes the market like this:

“We continue to see several promising smaller projects, and some larger projects in the 50-150 MW range, that are expected to take FID over the next quarters”

— Nel ASA, Q3 2026 results presentation, slide “Market perspective”

FID stands for final investment decision, and “over the next quarters” is exactly the kind of timing this analysis is about. On the new pressurized alkaline system, the same slide says there is concrete interest and several active customer dialogues, but it is “still early phase.” We reviewed the report and the slides; no transcript of the Q&A was available at the time of writing. Per the stock exchange release, this was Håkon Volldal's final quarterly presentation as CEO.

Uncomfortable truth No. 1: the record order sits in the at-risk bucket

In the fourth quarter of 2025, Nel celebrated its biggest win in years. CEO Håkon Volldal wrote in the annual report that the company had won a 40-megawatt order from Norwegian project developer HYDS for two sites in Norway:

“This contract represents the largest PEM order in Nel’s history and the company’s second largest order ever in terms of value.”

— Nel ASA, Annual Report 2025, letter from the CEO

Nine months later it reads differently. With every report, Nel publishes a small table that sorts the order backlog into three buckets: planned delivery this year, delivery later — and “significant risk of delay or cancellation.” At the end of 2025, that bucket held NOK 132 million, of which only NOK 17 million came from PEM. As of June 30, 2026, it held NOK 296 million, all of it PEM; back then, the report said one HYDS project was delayed and the other needed to be reevaluated. As of September 30, 2026, it holds NOK 568 million, of which NOK 534 million is PEM. The explanation sits directly below the table:

“The Hyds Projects remain delayed in the initial phase, but the customer plans to proceed. The increased uncertainty results in about NOK 500 million of the PEM backlog being classified as significant risk of delay or cancellation.”

— Nel ASA, Q3 2026 report, Alternative Performance Measures, p. 20

Let's translate that. The order backlog did rise to NOK 1,314 million, 34 percent more than a year earlier. But of the NOK 1,116 million in the PEM business, NOK 534 million, or 48 percent, is now at significant risk — almost half. The good news in the same sentence: the customer wants to proceed, and there is no mention of a cancellation. The bad news: about NOK 500 million, apparently practically the entire record order, hinges on one customer whose projects have not moved forward for months. The alkaline business has hardly any backlog left to wobble. It shrank from NOK 577 million to NOK 198 million within a year, down 66 percent, because Nel delivered more than it booked. In the third quarter of 2026, the alkaline division again took in just NOK 8 million in new orders. Nel points to paid front-end studies for projects above 100 megawatts that are supposed to turn into firm orders. They are not contracts yet.

Rule of thumb: a backlog is a customer's promise, not a wire transfer. At Nel, what matters is not the size of the backlog but the bucket it sits in — and that bucket has grown from NOK 132 million to NOK 568 million in three quarters.

Uncomfortable truth No. 2: a warehouse full of goods nobody picked up

Nel normally builds to order, so inventory should turn over quickly. It doesn't. At the end of 2025, inventories stood at NOK 919 million, more than 70 percent above the prior year's NOK 532 million. Finished goods alone jumped from NOK 67 million to NOK 552 million. Note 4.1 of the annual report gives the reason:

“A customer defaulted on its payment, so Nel accepted the goods as settlement for the outstanding receivables. This reduced trade receivables and increased inventory by approximately NOK 362 million. These goods remain unsold and are still held in inventory at the end of 2025.”

— Nel ASA, Annual Report 2025, Note 4.1 Inventories

An everyday picture: a furniture store delivers a custom kitchen, the customer doesn't pay, and the store takes the kitchen back and puts it in its own warehouse — valued at full cost, even though it was built for someone else's floor plan. At Nel this is not a one-off item. According to the annual report, the NOK 644 million alkaline inventory is equivalent to roughly 350 megawatts of electrolyser capacity, mostly finished cells and diaphragms. For comparison, the entire alkaline order backlog stood at NOK 198 million as of September 30, 2026. And the goods belong to the technology generation whose prospects Nel itself now rates lower because of its new pressurized systems — the very reason it wrote down the Herøya equipment in 2025.

Even so, the goods are carried at full cost. Nel tested whether the achievable selling price covers that value, and its sensitivity analysis shows how thin the cushion is: a selling price roughly 20 percent lower would wipe it out. And time is a factor too:

“A delay in expected order intake or delivery compared with management’s assumptions would increase the impact of discounting and may result in a lower NRV. A delay of 12 months compared to estimated timing of sale would result in zero headroom, all else equal.”

— Nel ASA, Annual Report 2025, Note 4.1 Inventories, sensitivity analysis

This is the planning fallacy in balance-sheet form. The inventory's value depends on an assumption about when Nel sells the goods. Push that date out by a year and the cushion is gone; every further delay becomes a write-down. As of September 30, 2026, inventories stood at NOK 925 million — more than at year-end (NOK 919 million) and about NOK 36 million more than three months earlier. In nine months, the warehouse has not been drawn down. The Q3 report does not mention a write-down; the impairment test with its sensitivity analysis returns in the Annual Report 2026, which Nel plans to publish on February 19, 2027.

A second item belongs here. Of gross trade receivables of NOK 250 million, NOK 123 million were more than a year past due as of September 30, 2026 — up from NOK 114 million three months earlier. Nel has set aside a NOK 43 million allowance against them. Same question again: how long do you wait for money before admitting it isn't coming?

Uncomfortable truth No. 3: no profit without more revenue — and the cash is shrinking

Nel says plainly what everything depends on. The report for the second quarter of 2026 put it in one unadorned sentence:

“Nel does depend on increasing revenues to achieve profitability.”

— Nel ASA, Q2 and half-year 2026 report, financial development — group, p. 4

The third-quarter report says almost the same thing: achieving profitability will require higher revenue and better capacity utilization. But revenue is not increasing; it is falling: NOK 413 million in the first nine months of 2026 versus NOK 633 million a year earlier. Nel has therefore cut costs and capacity, the alkaline plant at Herøya is no longer running full, and headcount has shrunk. At the same time, Nel keeps investing in its next generation, including a new production line with 1 gigawatt of annual capacity at Herøya, for whose industrialization the EU Innovation Fund selected Nel for a grant of up to €135 million. The cash balance shows what all of that costs together.

In the third quarter of 2026 alone, cash fell by NOK 250 million, more than in any of the four quarters before. Operating cash flow was minus NOK 197 million, including the roughly NOK 75 million for Iwatani; investments added NOK 40 million. Over twelve months, from September 30, 2025, to September 30, 2026, NOK 679 million went out the door (our calculation), an average of about NOK 170 million a quarter.

Let's recalculate the waiting time as simply as possible: NOK 1,078 million divided by NOK 170 million of outflow a quarter gives a little over six quarters, or roughly a year and a half — on paper, until around spring 2028. Strip out the two one-off items — the NOK 118 million EU grant in the second quarter and the roughly NOK 75 million for Iwatani in the third — and it stays at about six quarters (our calculation). In the first edition of this analysis in September 2026, it was a little over two years. That is not a crisis: the board confirms the going-concern basis in the audited 2025 financial statements, the auditor's report contains no material-uncertainty paragraph, and per the Q3 report the risk factors have not changed significantly since the annual report. But note a small shift in the outlook. In July, Nel wrote that its cash “allows” it to fund operations and technology development. In October, it reads:

“Nel has a cash balance that, in combination with adjustments to the cost base and capacity utilization, is expected to allow the company to fund its operations, investment in technology development and to be ready to return to its growth strategy when the market returns.”

— Nel ASA, Q3 2026 report, outlook, p. 9

“Allows” became “is expected to allow.” That is not a warning, but it is an expectation rather than a statement of fact. And the other key word is still there: “when.” There is no date attached. Who leads the way there remains an open question. On June 15, 2026, CEO Håkon Volldal, who had run Nel since July 2022, resigned to take a job in a different industry and stays on through his six-month notice period. As of October 15, 2026, Nel had not named a successor. When he resigned, the board stressed that the strategy and top priorities remain unchanged.

What the stock costs

At the closing price of NOK 2.02 on October 15, 2026, and 1,838.5 million shares, Nel is worth about NOK 3.71 billion — roughly $391 million or €349 million. Of that, NOK 1,078 million, about 29 percent, is unrestricted cash. The rest, roughly NOK 2.6 billion, is what the market pays for the actual business: a little over 3.5 times revenue for the last four quarters of NOK 743 million (our calculation from the fourth quarter of 2025 and the first nine months of 2026). There is no price-to-earnings ratio because there are no earnings.

Measured against its assets, the stock costs almost exactly book value: equity of NOK 3,441 million as of September 30, 2026, equals 0.93 times the market value, which is a price-to-book ratio of about 1.08 the other way round. That sounds like a safety net, but it is only as solid as what it is made of. Besides the cash, it contains NOK 1,131 million of property and equipment, NOK 635 million of capitalized technology and goodwill and NOK 925 million of inventory — exactly the items whose value hinges on the question of when the market arrives. And every loss-making quarter eats into equity itself: in the nine months through September 2026, it shrank by NOK 492 million.

One point of comparison: in March 2025, Samsung E&A paid NOK 353 million for 167.1 million new shares, or roughly NOK 2.11 per share (our calculation). The largest shareholder thus paid slightly more than the October 15, 2026 price — and has waited a year and a half without making anything. On dilution, meaning whether your slice of the pie gets smaller: Nel issued no new shares in 2026 through the end of September. But the annual general meeting on April 10, 2026, authorized the board to raise share capital by up to 10 percent, and Nel states openly in its annual report that, if necessary, it will attempt to raise capital through private placements, debt financing, partnerships or strategic alliances. The shorter the cash runway, the closer that question gets.

Upside and risks at a glance

What speaks for Nel:

• No bank debt, NOK 1,078 million of unrestricted cash and an equity ratio of 78 percent as of September 30, 2026; the audited 2025 financial statements confirm the going-concern basis.
• The PEM business is growing: revenue up 65 percent in the third quarter of 2026, order intake of NOK 245 million, plus repeat orders from specialty customers such as Collins Aerospace (about $20 million for submarine systems) and, in October, an order of about $12 million from an unnamed U.S. technology company.
• With its new pressurized alkaline technology and up to €135 million of EU funding, Nel has a new product designed to lower customers' costs.
• Strong partners: Samsung E&A holds 9.09 percent, plus collaborations with Reliance and Saipem, a European assembly partner (Hydrasun) since September 2026 and a memorandum of understanding with Rheinmetall since October.

What speaks against Nel:

• Revenue fell 31 percent in 2025 and another 35 percent in the first nine months of 2026; alkaline revenue collapsed 91 percent in the third quarter, and EBITDA has been negative five years running.
• 48 percent of the PEM backlog (NOK 534 million) carries a significant risk as of September 30, 2026, about NOK 500 million of it from the HYDS projects, the largest PEM order in the company's history.
• The warehouse holds NOK 362 million of repossessed goods from a customer default, and inventories have not come down in 2026; by Nel's own sensitivity analysis, a 12-month delay is enough to wipe out the valuation cushion.
• NOK 679 million went out in twelve months; at that pace the cash lasts about six quarters, and an authorization for up to 10 percent new shares is in place.
• The CEO resigned in June 2026 with six months' notice, and no successor had been named as of October 15, 2026.

A human conclusion

Remember the renovation from the beginning that was supposed to take three months? Nel is a company that has planned carefully for years and still keeps taking longer than it wanted — not out of incompetence, but because subsidy programs were postponed, interest rates rose and customers' projects stalled. The company says so itself in every report. The good news from the third quarter: the PEM business shows that Nel can win orders and execute them better, and no bank is breathing down its neck.

The uncomfortable news is once again in the notes. The at-risk bucket has nearly doubled, the warehouse has not shrunk, and at the current pace the cash lasts about six quarters instead of a little over two years. This is what the planning fallacy feels like from the inside: every single report sounds like “soon,” and only side by side do they show how the clock is running. The next test comes on February 19, 2027, with the Annual Report 2026: will the HYDS order turn into revenue or a cancellation, will the inventory valuation survive the annual test, and who runs Nel after Håkon Volldal? Anyone at Nel who only watches for the day hydrogen takes off should also keep an eye on the clock ticking on the balance sheet. What you make of it is your call.

Sources

• Nel ASA — Q3 2026 report (published October 15, 2026; most recent periodic report, IAS 34, unaudited) and Q3 2026 results presentation (October 15, 2026)
• Nel ASA — Q3 2026 stock exchange release (October 15, 2026, including the CEO quote)
• Nel ASA — Q2 and half-year 2026 report (published July 15, 2026)
• Nel ASA — Annual Report 2025 (IFRS consolidated financial statements, auditor Ernst & Young AS; published February 26, 2026)
• Nel ASA — Annual Report 2024 (key figures for continuing operations, Cavendish Hydrogen spin-off)
• Nel ASA — Q1 2026 report (April 22, 2026) and Q4 2025 report (February 26, 2026)
• Notice of the 2026 annual general meeting (March 17, 2026; authorization to increase share capital by up to 10 percent)
• Stock exchange releases: settlement with Iwatani (June 7, 2026), CEO resignation (June 15, 2026), framework agreement with Hydrasun (September 10, 2026), Collins Aerospace order (September 29, 2026), additional submarine orders (September 30, 2026), memorandum of understanding with Rheinmetall (October 13, 2026), financial calendar (as of October 15, 2026: Annual Report 2026 on February 19, 2027)
• Euronext Oslo Børs — Nel ASA quote page (ISIN NO0010081235); closing prices of September 25, 2026, and October 15, 2026
• European Central Bank — euro reference exchange rates of October 15, 2026 (conversion of NOK into dollars and euros)
• Source: fundamental data & company reports (annual and quarterly reports, Oslo Børs)

This analysis is a journalistic assessment based on publicly available company reports. It is not investment advice and not a solicitation to buy or sell securities. Stocks can lose value, up to and including a total loss. All figures carry the date of their source; prices are dated snapshots. Positions held by the operator are disclosed daily; where one exists, it appears as a notice at the top of this deep dive.