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Ballard Power Systems has signed a new supply agreement with Sierra Northern Railway to deliver 1.5MW of hydrogen fuel cell engines. The deal supports Sierra’s plan to convert three diesel switching locomotives into zero-emission units as part of its wider decarbonization strategy across California.

The order, expected for delivery in 2025, includes 12 FCmove-XD modules. These units are designed for heavy-duty mobility applications and promise high efficiency, durability, and power density.

Fuel Cell Trains Offer Diesel Replacement

Ballard’s fuel cell modules are capable of replacing diesel engines without the need for overhead electrification, making them particularly suitable for non-electrified freight lines. The technology allows long-range, fast-refueling operations with full route flexibility.

“Integrating Ballard’s fuel cell modules into our switching locomotives aligns with our commitment to innovation and environmental stewardship,” said Kennan H. Beard III, President of Sierra Northern Railway. “This initiative not only enhances our operational efficiency but is also a pivotal step in California’s efforts to reduce greenhouse gas emissions in the transportation sector.”

Ballard Sees Rail Sector as Growth Opportunity

Ballard is continuing to target rail as a strategic sector for hydrogen applications. In 2023, the company supplied 3.6MW of fuel cells to Canadian Pacific Kansas City (CPKC). CPKC has since announced plans to double its hydrogen-powered fleet by 2025, though no confirmation has been made about the supplier for the new units.

Randy MacEwen, President and CEO of Ballard, said the Sierra Northern project reflects the growing role of fuel cells in freight rail. “This partnership underscores the versatility of our industry-leading fuel cell technology and the critical role fuel cells can play in advancing sustainable rail solutions.”

Financial Restructuring and Cost Reductions Ongoing

Ballard is pursuing these expansion efforts while managing financial headwinds. In Q1 2025, the company reported a 14-point improvement in gross loss margin, reducing it to -23%. The gain followed a 2024 restructuring that included layoffs, executive changes, and adjustments to its China strategy.

The company has also signaled it will explore additional cost-cutting measures in 2025 to navigate ongoing macroeconomic, geopolitical, and industry-related uncertainty.