Ballard PEM Fuel Cell Rail Surge, 98 CPKC Engine Deal, 1.5 MW SERA Order, and 4 Key Deployments (2025)

Rail Decarbonization Projects, Ballard Validates Commercial Scale with CPKC and SERA

The rail industry’s adoption of hydrogen fuel cells shifted from small-scale pilots between 2021 and 2024 to commercially significant deployments in 2025, a change defined by large-volume retrofit orders and the successful entry into revenue service of multiple train platforms. This transition validates the use of Proton Exchange Membrane (PEM) fuel cells as a viable technology for decarbonizing both freight and passenger rail, moving beyond theoretical application to real-world commercial operation and revenue generation.

From Pilot to Commercial Retrofits

The most significant signal of market maturation is the scale of new orders from major rail operators. Before 2025, activities were primarily centered on single-locomotive demonstration projects. The market changed in 2025 with two landmark agreements for retrofitting existing diesel fleets, a capital-efficient decarbonization pathway for asset-heavy operators.

• In April 2025, Canadian Pacific Kansas City (CPKC) placed an order for 98 Ballard Power Systems fuel cell engines, totaling approximately 20 MW, to power its expanding hydrogen locomotive fleet. This represents one of the largest single deployments of fuel cells in the rail sector globally.
• Sierra Northern Railway (SERA) ordered 12 of Ballard’s FCmove®-XD modules in June 2025, providing 1.5 MW to convert three diesel-powered switching locomotives used in California rail yards. The first of these locomotives was successfully tested in March and formally commissioned in September 2025.
• These retrofit programs stand in contrast to the prior period’s focus on smaller, grant-funded PEM fuel cell projects, confirming a strategic shift by operators toward fleet-level conversion programs.

New-Build Passenger Trains Enter Service

Alongside the growth in retrofits, 2025 saw multiple new-build hydrogen passenger trains, developed in partnership with major OEMs, begin regular operations. This provides critical operational data and builds public and regulatory confidence in the technology. While Ballard Power is also active in the bus and marine markets, the rail segment’s operational milestones in 2025 were particularly notable.

• Stadler’s FLIRT H 2 passenger train, powered by Ballard fuel cells, officially entered service with the San Bernardino County Transportation Authority (SBCTA) in California on September 13, 2025.
• In Germany, Siemens Mobility’s Mireo Plus H train, also using Ballard technology, began regular passenger service on the Heidekrautbahn network near Berlin in February 2025.
• Polish OEM PESA delivered a fuel cell-powered shunter locomotive to the Swedish market, equipped with two 85 k W Ballard engines, demonstrating the technology’s application for freight yard operations in Europe.

$32.5 M Q 3 Revenue, Ballard Financial Performance Driven by Rail Segment

Ballard’s financial results in 2025 directly reflect the commercial inflection point in the rail market, with surging revenue and improved margins tied to deliveries for these large-scale projects. This performance indicates that fuel cell technology for heavy-duty applications is beginning to translate from development-stage costs to a commercially viable business model, although market adoption remains uneven as evidenced by competitors’ strategic adjustments.

Ballard Q 3 2025 Financials

The company’s third-quarter earnings report provided a clear quantitative signal of the impact of its recent rail and bus contracts. The results showed a significant top-line expansion and a crucial improvement in profitability metrics, addressing long-standing investor concerns about the path to positive cash flow.

• Ballard reported a 120% year-over-year revenue increase in Q 3 2025, reaching $32.5 million, which was explicitly attributed to higher volumes of engine shipments for its bus and rail customers.
• Gross margin showed a 71-point improvement to 15% in the same quarter, demonstrating progress toward profitable unit economics as production scales.
• In July 2025, the company announced a strategic realignment aimed at achieving positive cash flow, with the large-volume orders from customers like CPKC serving as the commercial foundation for this plan.

Alstom’s Hydrogen Project Pause

While Ballard and its partners advanced, the market also showed signs of fragmentation and technical challenges. In November 2025, reports emerged that competitor Alstom was pausing its hydrogen train ambitions. This development underscores that technology maturity and reliability are not uniform across all suppliers, potentially consolidating the market around providers with proven operational deployments.

Table: Strategic Developments & Financial Signals for Rail Fuel Cells (2025)

Ballard Power 4 Key Rail Partnerships (2025)

Ballard’s 2025 market success is founded on a dual-pronged partnership strategy, securing large-volume retrofit orders directly with rail operators while also supplying technology to major OEMs for new-build train platforms. This approach allows the company to capture value across different segments of the rail market, from heavy-haul freight in North America to passenger transit in Europe, establishing itself as a central technology provider in the industry’s decarbonization.

Ballard North American Operator Partnerships

Direct engagement with North America’s largest rail operators for fleet conversion programs marked a pivotal strategic success. These partnerships target the core of rail emissions by focusing on high-horsepower diesel locomotives used in freight and yard operations.

• The agreement with Canadian Pacific Kansas City (CPKC) for 98 engines is a landmark deal aimed at decarbonizing freight rail lines across the continent. It moves fuel cell deployment from single-unit tests to a fleet-level program.
• The partnership with Sierra Northern Railway (SERA), supported by funding from entities like So Cal Gas, focuses on converting switcher locomotives in California. This targets criteria pollutants and greenhouse gases in logistics hubs and ports.

Ballard European OEM Collaborations

In Europe, Ballard’s strategy centers on supplying its fuel cell modules to established rolling stock manufacturers. These collaborations leverage the OEMs’ market access and integration expertise to deploy hydrogen trains on non-electrified routes, providing a zero-emission alternative to diesel multiple units (DMUs).

• The long-standing partnership with Siemens Mobility resulted in the deployment of Mireo Plus H trains near Berlin. The agreement includes a contract for 14 fuel cell units with options for up to 86 more, indicating a long-term commitment.
• Collaboration with Polish OEM PESA led to the delivery of a fuel cell shunter locomotive in Sweden, demonstrating the versatility of Ballard’s modules for different rail applications, including specialized freight yard equipment.

Table: Key Ballard Rail Partnerships and Deployments (2025)

North America vs. Europe, Ballard Establishes Dual Market Leadership

While Europe was an early adopter of hydrogen-powered passenger rail, 2025 saw North America emerge as a critical growth market for larger-scale fuel cell applications in heavy-haul freight and switcher locomotives. This geographic divergence allows technology providers like Ballard Power to pursue a dual-front strategy, addressing distinct regional needs and regulatory drivers while diversifying its revenue base across continents and applications.

Ballard’s North American Freight Focus

In North America, the primary driver for hydrogen adoption is the decarbonization of the continent’s extensive freight rail network. The focus is on high-power applications where batteries lack the required range and energy density. The 2025 strategy pivot is evident here.

• The CPKC agreement for ~20 MW of fuel cells is the most prominent example, targeting the replacement of diesel engines in mainline freight locomotives. This market represents a massive total addressable opportunity.
• California’s aggressive emissions regulations are driving adoption in industrial applications, as seen with the SERA switcher locomotive project in West Sacramento, which aims to reduce pollution in critical air basins.

Ballard’s European Passenger Rail Presence

In Europe, the market is characterized by a push to replace diesel trains on non-electrified or partially electrified passenger lines. This is driven by national and EU-level climate targets and a desire for quieter, cleaner public transportation.

• Germany leads this adoption with projects like the Siemens Mireo Plus H trains entering service near Berlin. These deployments serve as important validation cases for other public transit authorities across the continent.
• The delivery of a PESA shunter locomotive in Sweden shows the expansion of fuel cell applications beyond passenger rail into specialized European freight operations, creating a new growth segment.

SWOT Analysis, Ballard Strengths in Rail and Market Risks

Ballard’s strategic position in the rail sector is defined by its technological maturity and key commercial partnerships, which have translated into significant orders. However, the company faces external threats from competing technologies and internal challenges related to scaling production to meet its growing order book. The shift in 2025 validated its core strengths and moved the primary execution risk from technology demonstration to industrial-scale manufacturing and delivery.

Table: SWOT Analysis for Ballard Power in the Rail Sector

Scenario Modelling, Ballard Production Scaling for CPKC Order

The most critical variable for Ballard in the coming 12 to 18 months is its operational capacity to manufacture and deliver on its large-volume orders, particularly the 98-engine agreement with CPKC. Successful execution will cement its market leadership and likely trigger follow-on orders, whereas any significant delays could undermine customer confidence and create an opening for competitors to re-enter the market.

• If this happens: Ballard successfully scales production and meets the delivery schedule for the CPKC and SERA orders throughout 2026 without significant delays or quality issues.
• Watch this: Monitor Ballard’s quarterly reports for updates on engine deliveries, gross margin trends, and progress on its path to positive cash flow. Look for announcements of new orders from other Class I railroads or expanded agreements with existing European OEM partners.
• These could be happening: Successful execution by Ballard could accelerate a market-wide standardization around its fuel cell platforms for locomotive retrofits. In response, competing OEMs and technology providers may form new alliances or fast-track their own heavy-duty fuel cell programs to avoid being locked out of the nascent but rapidly growing rail market.

The questions your competitors are already asking

This report covers one angle of Ballard Power’s commercial trajectory in the rail market. The questions that matter most depend on your work.

• Ballard production capacity for train engines
• Hydrogen supply for rail projects North America
• Ballard competitors heavy-duty fuel cells
• US state regulations for zero-emission locomotives

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