Doosan’s High-Stakes Fuel Cell Pivot: An Inside Look at its 2025 SOFC Strategy

Industry Adoption: Doosan’s Strategic Shift from PAFC Dominance to a Diversified Fuel Cell Future

Between 2021 and 2024, Doosan Fuel Cell executed a deliberate strategy to diversify beyond its established leadership in Phosphoric Acid Fuel Cells (PAFCs). This period was defined by strategic partnerships aimed at building capabilities in next-generation technologies. The company forged critical alliances to enter the maritime sector with Solid Oxide Fuel Cells (SOFCs), partnering with Korea Shipbuilding & Offshore Engineering (KSOE) in 2021 and a Shell-led consortium in 2022. For the mobility market, it partnered with Ballard Power Systems in 2022 to co-develop Proton Exchange Membrane (PEM) fuel cells. This foundational work culminated in a major validation point in March 2024, when Doosan’s SOFC stack became the world’s first to pass maritime environmental testing, confirming its technical viability for demanding applications. The period closed with a significant corporate restructuring in December 2024, integrating its smaller fuel cell business into Doosan Mobility Innovation (DMI) to sharpen its focus on PEMFC and SOFC solutions for land, sea, and air.

The year 2025 marks a dramatic inflection point, shifting from technology validation to high-stakes commercial execution. This transition is most evident in the July 2025 launch of mass production for its Ceres Power-designed SOFC systems, directly targeting lucrative markets like AI data centers and commercial distributed power, with first sales anticipated by year-end. However, this forward progress is set against a backdrop of significant market volatility. In a major setback, Doosan terminated three PAFC supply contracts worth a combined $560 million in April 2025, citing project delays and financing difficulties. This event exposed the near-term bankability risks of large-scale hydrogen projects, increasing the pressure on the new SOFC business to succeed. Despite this, the company secured a 20-year, $308 million service agreement in September 2025, demonstrating the continued value of its established operational and maintenance business. The current landscape reveals a company at a crossroads: successfully launching a next-generation technology while navigating commercial headwinds in its legacy market.

Table: Doosan’s Strategic Investments in Fuel Cell Technology and Expansion

Table: Doosan Fuel Cell’s Key Strategic Partnerships

Geography: Doosan Fuel Cell’s Domestic Focus and Global Reach

From 2021 to 2024, Doosan’s geographic strategy was characterized by a strong domestic core in South Korea, complemented by strategic international outposts for technology and market access. South Korea served as the primary market for its large-scale PAFC installations and the hub for its SOFC development activities, including test projects with Hanwha Solutions and Korea Hydro & Nuclear Power. Concurrently, the United States emerged as a key region for future growth, driven by HyAxiom’s fundraising efforts and mobility-focused partnerships with entities like MIT and Ballard Power Systems. The UK was a critical technology-sourcing hub through the landmark partnership with Ceres Power.

In 2025, the focus has pivoted to commercializing this strategy, with South Korea becoming the primary battleground. The launch of SOFC mass production at the Gunsan factory and the establishment of domestic offtake partnerships with Samchully and Korea Western Power show a clear intent to dominate the home market first. This domestic fortress strategy is designed to create a stable revenue base for the new technology. At the same time, Doosan continues to nurture its global ambitions, particularly in the US, as evidenced by the hydrogen drone demonstration with SoCalGas in March 2025. The geographic pattern shows a shift from sourcing technology globally to deploying it at scale domestically, while using targeted international partnerships to build beachheads in high-potential overseas markets like the US.

Technology Maturity: Doosan Fuel Cell’s Journey to Commercial SOFCs

Between 2021 and 2024, Doosan managed a portfolio of fuel cell technologies at different maturity levels. Its core PAFC technology was fully commercial and scaling, as demonstrated by its supply to the world’s largest hydrogen fuel cell power plant in 2021. Innovation in PAFC was incremental, focused on enhancing efficiency. In parallel, SOFC technology was in the pilot and validation stage. The key objective was to prove its viability for new, demanding applications, a goal it achieved with the world-first maritime environmental certification in March 2024. PEMFC technology was in an earlier development and niche piloting phase, with collaborations like the one with Ballard Power aimed at co-developing systems for the broader mobility market while initial use cases were tested in drones and forklifts.

The year 2025 represents a definitive shift in technology maturity, with SOFCs graduating from pilot to early commercialization. The start of mass production in July 2025 moved the technology from a state of technical risk to one of market risk. It is now a commercially available product whose success hinges on market adoption, particularly in targeted sectors like data centers. PAFC technology, while mature, has shown signs of market volatility with the $560 million contract cancellations, indicating that technological maturity does not guarantee commercial stability. PEMFC technology remains largely in the advanced piloting stage, with projects like the SoCalGas drone demonstration continuing to validate its use in specialized mobility applications. The data shows a clear progression: leveraging a mature technology (PAFC) to fund the validation (2021-2024) and now the commercial launch (2025) of a next-generation platform (SOFC).

Table: Doosan Fuel Cell’s Strategic SWOT Analysis

Forward-Looking Insights and Summary

Doosan Fuel Cell stands at a pivotal moment. Its aggressive and strategically sound pivot to SOFC technology is now a commercial reality, but its success is far from guaranteed. The coming 12 months will be decisive, and market actors should watch four key signals closely. First and foremost are the initial commercial sales of its new SOFC systems, expected before the end of 2025. Securing deals in the targeted AI data center and commercial power sectors will be the ultimate validation of its multi-year investment. Second, quarterly financial reports will be critical. The market needs to see a clear trajectory away from the current -4.33% negative profit margin toward profitability, driven by the higher-efficiency SOFC product line. Third, after the jarring $560 million contract cancellation, securing new, large-scale supply agreements for either PAFC or SOFC systems is essential to rebuild confidence in its order book. Finally, the conversion of pilot MOUs, like those with Samchully and Korea Western Power, into firm commercial orders will demonstrate whether Doosan’s ecosystem-building strategy can successfully de-risk market entry and create a sustainable sales pipeline. Doosan has laid the technological and industrial groundwork; now it must prove it can execute commercially and financially.

Frequently Asked Questions

What is the core of Doosan’s strategic pivot described in the article?
Doosan is executing a major strategic pivot from its historical dominance in Phosphoric Acid Fuel Cells (PAFC) to a diversified portfolio including next-generation technologies. The core of this pivot is the commercial launch of Solid Oxide Fuel Cells (SOFC) for stationary power markets like data centers, and the development of Proton Exchange Membrane (PEM) fuel cells for mobility applications, while still servicing its established PAFC business.

The article mentions a $560 million contract cancellation. Is Doosan’s legacy PAFC business failing?
Not necessarily. While the $560 million cancellation in April 2025 is a significant setback, the article attributes it to project delays and financing difficulties in the broader hydrogen market, not a failure of Doosan’s technology. This highlights market volatility. To counterbalance this, Doosan also secured a new 20-year, $308 million service agreement in September 2025, showing that its maintenance business for the existing PAFC fleet remains a valuable and stable revenue source.

What are Solid Oxide Fuel Cells (SOFCs) and what specific markets is Doosan targeting with them?
SOFCs are a next-generation, high-efficiency fuel cell technology that forms the centerpiece of Doosan’s future strategy. In July 2025, Doosan began mass production of SOFC systems designed by its partner, Ceres Power. With this new product, Doosan is specifically targeting lucrative and high-demand markets, including AI data centers, commercial distributed power, and the maritime sector, where its technology passed critical environmental testing in March 2024.

According to the SWOT analysis, what is the biggest change in Doosan’s position between 2023 and 2025?
The biggest change is the validation and commercialization of its technology diversification strategy. By 2025, Doosan’s strength shifted from relying on a single mature technology (PAFC) to having a validated SOFC product with a mass production facility. However, its threats also evolved from theoretical competition to concrete commercial setbacks, as evidenced by the $560 million contract cancellation, which confirmed the real-world bankability risks of large-scale projects.

What are the key indicators to watch to see if Doosan’s SOFC strategy will be successful?
The article identifies four key signals to watch. First, securing the initial commercial sales of its new SOFC systems before the end of 2025. Second, showing a clear path to profitability in quarterly financial reports, moving away from its current negative margin. Third, winning new large-scale supply agreements to rebuild its order book. Finally, converting existing partnerships and MOUs (like with Samchully) into firm commercial orders.