Greetings, welcome to the Plug Power first quarter 2021 earnings conference. At this time, all participants are in a listen-only mode. A question-and-answer session will follow after the presentation. If you would like to ask a question, you may press star one on your telephone keypad. If anyone should require operator's assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Teal Hoyos, Director of Marketing Communications. Thank you. Please go ahead. Thank you. Welcome to the 2021 first quarter update call. This call will include forward-looking statements. These forward-looking statements contain projections of our future results of operations or of our financial positions or state other forward-looking information. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We believe that it is important to communicate our future expectations to investors. Investors are cautioned not to unduly rely on forward-looking statements, and such statements should not be read as a guarantee of future performance or results, as such statements are subject to risks and uncertainties that could cause actual results or performance to differ materially from those discussed as a result of various factors, including but not limited to risks and uncertainties discussed under Item 1A Risk Factors in our annual report on Form 10-K for the fiscal year ending December 31st, 2020, as well as other reports we file from time to time with the SEC. These forward-looking statements speak only as of the day on which the statements are made, and we do not undertake or intend to update any forward-looking statements after this call or as a result of new information. At this point, I would like to turn the call over to Plug Power's CEO, Andy Marsh. Well, thank you, Teal, and good morning, everyone, and thank you for attending our first quarter conference call. We issued our investor letter this morning, which covers our performance for the first quarter. I'd like to comment on a few items before we take your questions. First item I'd like to highlight is the importance of the resilient green hydrogen network the company is constructing across the U.S. We're presently targeting to have 500 tons of green hydrogen available by 2025 and an additional 500 tons globally by 2028. The network in the U.S. will go coast to coast with sites already targeted for Camden, Georgia, to serve specifically Florida, a site outside Lancaster, Pennsylvania, a site west of Fort Worth, Texas, and a site in upstate New York in Genesee County. At the 45-ton plant in Genesee County, New York, the feedstock will be clean electricity generated from Niagara Falls. This will be the largest green hydrogen plant in the world. What's important about our plants is there's pent-up demand for green hydrogen solutions among our customers today. Over the last few years, our value proposition has expanded beyond improving our customer operations and now is tightly entwined with companies achieving their CO2 reduction goals. There are many applications beyond material handling, like stationary power, on-road vehicles, and other industrial offerings that can only be decarbonized with hydrogen. To truly decarbonize, green hydrogen is required. Our network will not only offer us a revenue and margin opportunity, but what I really think about it's an accelerator of all our products, both fuel cells and electrolyzers. Customers want green hydrogen, and Plug Power is making that commitment to deliver. One of our distinct advantages in building our network is, unlike the industrial gas companies, we do not have existing fossil fuel-based assets. We don't have to worry about stranding multi-billion dollars of investments. This is an impediment to some companies as they seek to decarbonize. They're caught in the middle, supporting gray or blue hydrogen assets, which are not wanted by companies, governments, or the environmental community. Our network is the hydrogen network for the 21st century, and it's just starting. Not only will we be delivering green hydrogen, but we'll be delivering it in vehicles that operate from green hydrogen. Plug Power, by the way, fuel cells in those vehicles. Another subject I'd like to highlight is that Plug has become a global company overnight. Two obvious examples are our joint ventures with Renault, HYVIA, and our relationship and the joint venture being established with SK. Another example of our global efforts is our funnel for the electrolyzer business is already in the billions of dollars, with over 80% of the opportunities outside North America. The funnel for vehicles is also similarly distributed, and our activity as material handling is rapidly growing in Europe. In 2020, the company was almost exclusively an American company in both sales and opportunities. Over the past six months, the company has been transformed into a global enterprise. Think about questions you are going to ask. Finally, we're almost to the end of the second quarter, and we can provide some insights on our progress. Investors should expect $115 million-$120 million of gross billings for the quarter. This is approximately 40% of our target revenue of $475 million for the year. Usually at this point in the second quarter, we're about 33% of our annual revenue will have been achieved. We're at a run rate that is higher from both a revenue and growth rate level than we've experienced in the past. We also foresee a very strong third quarter. We are pleased with this level of progress so far this year. Paul and I are now ready to take your questions. Thank you. The floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker, it may be necessary to pick up your handset before pressing the star keys. Once again, that is star one to ask a question at this time. Our first question is coming from Colin Rusch of Oppenheimer. Please go ahead. Thanks so much, guys. Good morning, Colin. Andy, it's always great to hear your voice. Can you talk a little bit about the sales process for the green hydrogen? Obviously, there's a lot of moving pieces on the demand side from the truck building perspective and availability plus route codification and whatnot. Can you talk to us about where you're at with your customers in terms of preparation to really roll out fleets and move towards a zero emissions structure for their businesses? Sure. Colin, I think the first item is that one of the unique advantage Plug has is that we have demand for our hydrogen products today. The qualification process for the purity of hydrogen is relatively straightforward, and we don't see that as an impediment at all. As you know, we're already in the hydrogen delivery business and logistics business, and we'll have by the beginning of October, 10 tons of our own capacity. That's really not an issue. When you start taking a look at it, I think during the second half of this year, you'll see a number of commitments for our green hydrogen plants. I would expect by the end of the year, about 40%-50% of the demand by 2025, we'll already have in the sales funnel, and most of that will be tied to present applications. Perfect. That's incredibly helpful. With the aerospace opportunity here, it's the first time we've seen some real articulation around timeframes and opportunities here, but obviously that's a very large opportunity that's incremental to what you've got in your guided plans that you've stated in the past. Can you talk a little bit about potential partnerships, strategic positioning on that opportunity as you go forward and how we should think about the cadence of news flow coming out? Yeah. I'm going to give you a long answer, Colin, I'm sorry. I position aerospace into three buckets. One, I think very short duration flights, batteries will be an interesting choice for customers. I think for the majority of flights where regional flights and transcontinental flights category falls in, I think hydrogen will be an interesting solution both with fuel cells and using present internal combustion engines. I think when you start talking about long range, I think a sustainable aviation fuel will have a place in the market. With Plug, in 2025 with Universal Hydrogen, we'll be doing the first deployments of converting regional planes, propeller prop planes to fuel cell power. I think that's a real interesting opportunity. I think we think a lot about, we're talking with many of the major players who are thinking about how they go about deploying both the small players and many of the new emerging companies about how they can source green hydrogen. I think that many people would conclude that the pathway for aviation, which represents 3% of CO2 reduction, hydrogen will be the most significant player in that industry. I think it'll grow gradually between 2025 and 2035, and then I think by 2035, it may start having certainly a dominant position for all new planes coming off the line. That's incredibly helpful. I'm going to add one last item, Colin. To me, it's also my technology development platform. If you think about what a plane needs, lightweight, high power density, simple storage, all those are applicable to on-road vehicles. That also is more to me than just the market. It's also how we develop technology simultaneously as we develop new markets. Perfect. Thanks. Super helpful. Thanks so much, Andy. Okay. Thank you. Our next question is coming from James West of Evercore ISI. Please go ahead. Good morning, James. Good morning, Andy. Hey, Andy. How are you? How are you? Okay. I'm doing well. Andy, some of your pedestal customers like Amazon and Walmart have announced pretty aggressive decarbonization plans. I suspect that's driving a nice pickup in your activity with them. Could you perhaps describe how those plans are playing into your business and their greater adoption or further adoption or penetration into their various facilities? Sure. Many of these activities are starting today, as you mentioned, James, and I guess I'd like to start off by just discussing what's a future distribution center look like, which is not too far from being a reality because we're doing work on all these items today. One of the real advantages, and by the end of the year, we'll have over 170 fueling stations and hydrogen storage at customer sites, that the hydrogen already is there, which is a huge advantage. When you look at the different applications from material handling, from powering robots, leveraging the same platform we have for drones, from fueling stations, and we are modifying the outdoor dispensers we have at some of our customer sites for on-road vehicles today. Obviously, those on-road vehicles will be using Plug Power green hydrogen to fuel their vehicles. Right. Coupled with the fact that when you go look at things like how do you back up a facility, and we'll be doing some backup deployments this year for our backup stationary products to back up distribution centers, again, since the hydrogen's there. You start thinking about all that, and then even going further back in the chain, we have the ability to generate that green hydrogen. Obviously, the discussions with our customers have intensified. We are working through some rather large plans with many of our major customers how to be deploying green hydrogen, not as some long-term goal, but as some near-term goal to help them support their decarbonization efforts. Okay. That's very helpful. Andy, when you and I were talking late last year, as you kind of alluded to in your opening comments, you were more of a domestic company, and now you're global. I'm curious how you and the rest of the team think about this global rollout and the execution of becoming what's going to, I think, be a very, very large global company. How do you think about it from a just a personnel standpoint, from a logistics standpoint, from a facility standpoint? I mean, there's all kinds of things to think about, but how are you guys planning for this? Sure. That's a long question, James, I'm going to try to use Europe as an example. Okay. Sounds good. In Europe, I think we have two efforts. We're working to do some activities with partners, and we're working to do some activities alone. If you think about it, the two largest economies in the EU, France and Germany, are really where we're focusing a good deal of our attention. The Renault JV provides us an opportunity to have a home in France that's much broader than just the vehicles we're putting on the road, but we'll be building the infrastructure and providing the hydrogen to support those activities in France. In that JV, we have a number of Plug Power employees who happily are volunteering to go to France to support that activity and really help build up that enterprise as rapidly as possible. We're opening a business center outside Düsseldorf, Germany, to support the German market, which will primarily be focused on our electrolyzer business because of the huge opportunities there. We have a fairly strong sales team in Europe, and we're staffing service and application engineers to really support that effort to grow that business. When you go down to the Iberian Peninsula, we have a nice position, as you know, with ACCIONA, and we expect to close that JV in the third quarter, where we're targeting 20% of the green hydrogen, which will support both our Renault activities and other activities we have in material handling elsewhere going on in Europe. I think one of the key items is, it's really kind of a mix of how you successfully leverage partners, how you successfully leverage relationships, and we obviously can't do it alone to grow this rapidly, but finding the right partners, right relationships, and deciding which items we will pursue on our own. That's really how we're thinking about it. If you look globally from a facilities point of view, there certainly will be a gigafactory in France, supporting the JV, as well as maybe some other activities, as well as in South Korea with SK. Okay. Thanks, Andy. Thanks, James. Thank you. Once again, ladies and gentlemen, that is star one to register any question at this time. Our next question is coming from Craig Irwin of Roth Capital Partners. Please go ahead. Good morning. Thanks for taking my questions. Good morning, Craig. How are you today? I'm absolutely fantastic. Let me ask you, are you in London? No, I'm not in London. I'm still in the U.S. We're doing our virtual London this week, but hopefully we'll see you in London next year, Andy, as we did two years ago. Yeah. Great. Busy day. Looking forward to the meetings with you later on today, so thank you. Yeah. My question is, in the last year, it became really obvious to the market, the broader market, that customer and government interest and support for the adoption of a hydrogen economy is really taking place, right? We've seen many different layers of the story develop considerably. You're even talking more in your release and on the call today about the aviation market, which is one that I'm personally a fan of, given how dirty aviation fuels are and the potential. Is there anything left for you to pursue? Is there anything you see as low-hanging fruit? You got trucks, you got data centers, you got cell sites, you got a future in aviation. Where can you fill out the portfolio? Wow, that's a good question, Craig. I think let's move to the hydrogen front. I do believe that there is real opportunity in green hydrogen for helping to decarbonize the natural gas pipelines. We're getting lots of requests for injecting hydrogen into pipelines. I think that there's opportunities in industrial applications like steel and concrete, where the hydrogen market could be, not the sexiest markets, Craig, but the hydrogen market could be really interesting. From an apps point of view, I think that if you think about areas like, we talked about airports and ports in general. I think there's large opportunities across the board to decarbonize our airports, which is ground support equipment, which is airplanes, which are the vans running around the airports. I see most of our activity and expansion really has to do with how to think through fleet vehicles or ecosystems around airports and ports and other areas where all Plug Power products and capabilities can be deployed. That's how I look at it, and I use as an example in the back of my mind is that a distribution center we're beginning to think about, as I explained before, as kind of a mini system where we can do everything to meet customers' needs. For those applications where fuel cells make sense, and there's many where batteries make sense, we'll be able to decarbonize. That's how I'm thinking about it. You know what? There'll be apps and opportunities that pop up from talking to customers that, quite honestly, I haven't even considered yet. Understood. That makes a lot of sense. My second question is about margins, right? Most investors that look at companies like Plug Power, companies with aggressive growth potential, look at growth first, and they look at the longer-term margin potential later. You did a really good job in your shareholder letter laying out some of the issues in the hydrogen market, the force majeure events. Can you maybe describe for us what the longer-term potential of green hydrogen offers to your margins and overall customer profitability, not just the environmental footprint, which is what a lot of people have been considering? Yeah. I think that's a good-- you know, when you think about the full margin picture, Craig, the number that I think should tell investors we're on the right track is the margins for products in the first quarter, which were 38%, with all the challenges of transportation the world has seen. On the hydrogen front, we believe green hydrogen will be a 30%+ gross margin business, and that the long term, when you look at it, the cost is really tied to the cost of renewables. Our folks have done a great job, like Sanjay, finding low-cost renewables that make it attractive versus natural gas today. You have a better product than. We have a better offering. With the deployment of our networks, and especially the resilient network we're building, we're in a much, much better position to support the much higher margins for hydrogen. I would like to add, which probably gets lost, is when I look at the force majeure, logistically, we actually were able to manage that without impacting customers using our own logistic network and assets to make sure that customers were taken care of. To me, that was a significant achievement. I think margins in green hydrogen will be in line with our product margins. The service business actually performed up to our expectations for the quarter, and we're beginning to see continual improvements. That business should become a 30%+ gross margin business. Look, we expect to be there across the board by 2024. Great. My last question, if I may, is about the DOE loan guarantees you're applying for. It's really nice to have a Department of Energy that once again is willing to lean in and support business transformation and the transformation of energy. Can you maybe talk to us about the process, where you are in the process, and if there's maybe potential for other capital projects that Plug will pursue over the next few years to be a recipient or at least apply for similar financing? Yeah. Craig, we're in the beginning of phase II with the program. Done a lot of work, actually. Folks have told me we're about halfway through phase II. I think when we're looking at this, it's just not for one project. It's actually the application is looking at three or four projects to deploy across North America to support all our networks. We're looking to do it in stages. Our thought process is somewhere between $500 million-$1 billion of support to build out these networks with low-cost loans. Understood. Thanks again for taking my questions. Congratulations. All right, thanks, Craig. Pleasure. Thank you. Our next question is coming from Eric Stine of Craig-Hallum. Please go ahead. Good morning, Andy. Good morning, Eric. How are you today? Doing well. Doing well, thanks. Just want to quick come back on the margins, and obviously with the green hydrogen network, you're putting plans in place for the long term. Just in the near term, any thought, I know you've been asked this in the past, but any thought on potentially owning your own tanks so you don't have to necessarily switch hydrogen providers or that you're able to buy hydrogen more cost-effective rather than from one source? Yeah, that's a good question, Eric. We actually do own probably, Paul, what do you think, a third of our tanks at the moment? Probably even 2/3, Andy. We've been buying tanks on our own. Even this transition, we moved towards installing our own tanks. We haven't rented a tank from one of the providers in years. I'd say in a very short order, the majority of our locations will own their own tanks. I would say, Eric, that's great. Also you need to be in contractual relationships with your partners, which the expectation is that they fill these tanks. I think that what I've been thinking more about, Eric, is actually our ability to pick up hydrogen at their facilities, which can help also drive down the cost of hydrogen. If I think about our near-term containments, our plant in Tennessee is expanding and will be expanding on October 1. The supply issue has been relieved with the addition of 35 tons of capacity coming online, which is highlighted in our investor letter. Look, we're obviously in negotiations to try to reduce our costs. With some of the severe conditions, it was a tough quarter making sure customers got their hydrogen, and it caused the price to go up. That being said, prices are going down again, which is helpful. I think probably more important as we built out our network, and I think the fact that we're geographically spreading the network will have really positive impacts for us to control. I think in the next 12 months, life becomes much easier as more and more of our own capability comes online. Got it. I would assume that makes it easier to, you've got some leverage on the contract side. I think that would be fair to say, Eric. Okay. Maybe last one for me, just on the SK agreement. I know you're working towards the joint venture and finalizing that in the second half, but just curious, given the significance of that market, what the pipeline looks like, any work that you've done in advance of closing that, and then I would, I guess specifically on the utility scale power side, wondering the type of traction or the outlook you have there going forward. One of the real advantage of the SK relationship is we expect that to be by 2025 to have over 400 MW deployed with SK alone at their facility. We have a built-in customer with the JV partnership, which is really advantageous. If you think about 400 MW by 2025, you're deploying in 2024, that's in the range of $400 million in revenue. We also have, not surprising, a good deal of activity going on in the electrolyzer business, but also with hydrogen fueling stations with SK because of their position. I know SK has huge ambitions. We've had teams over there positioning material handling equipment already, working ProGen with SK itself. As you know, it's a- Okay. Thanks a lot. It's coming from Jeff Osborne of Cowen. Please go ahead. We're quoting billions of business, I think you said, and 80% outside of the U.S. I was wondering if you could give us an update on when you thought some of those RFPs would come to a closure, when you might be awarded any business. I can tell you, Jeff, I believe it'll happen this year. Mainly because it's very possible that I'm really pleased. I think the combination of the fact that PEM technology can work from variable energy sources and the fact that costs are coming down, especially since we can leverage our gigafactory. I think they're all really promising signs for us. That's great to hear. This would be leveraging that group in Düsseldorf that you referenced earlier, I assume, or no? No, actually, the gigafactory as you know is in Rochester. For the European market, we do have a partner, I think you'll hear more about who will be supporting building the systems for within Europe. Look, we also have opportunities in places like Australia, New Zealand, India, across the world to support different activities we're engaged in. Got it. That's great to hear. Just a couple other housekeeping questions. Yeah. One, I saw the units sold for revenue, but can you give us the total units which would include the leased units for GenDrive? Paul, I think you have it. Paul, I think it's 1,380, isn't it, Paul? I'll let you take this one, Paul. Yeah, for the first quarter it was 1,308 was total that got deployed in the quarter. Okay. Got it. What's the CapEx plan for this year and next? Just given the bevy of announcements you've had, I just want to make sure we've got the right expenditure profile for 2021 and 2022. It's you again, Paul. Yeah. Well, I would say, some of these long lead items are a little tough to plan exactly when the money will be spent, but I think $750 million this year and $750 million next year is probably a pretty good proxy, Jeff. Got it. Last one, the stationary power, will we have our first deployment of that in live in the third quarter? I think that was your prior target for a data center backup. I'll say this, Jeff, we better. yes. Okay. Good to hear. Okay. That's all I had. Great. Thanks, Jeff. Thank you. Our next question is coming from Paul Coster of JPMorgan. Please go ahead. Good morning, Andy. Good morning, Paul. I think I'll be talking to you later today, right? I believe so. You're a busy man. Yeah. Andy, starting off with the near term, obviously the 2Q guidance is pretty encouraging. 3Q, I think you said is very strong, whatever that means. It sounds like it's incredibly better over 2Q, so perhaps you can elaborate. What is driving the near term demand? Is it the pedestal business or is it other stuff? Perhaps you can just give us some color there. Yeah. I think, the answer to that is that primarily, the pedestal business, and I think in the third and fourth quarter you'll see the electrolyzer business pick up significantly. If I look at it, there are today, five customers who really are driving the material handling business. The biggest one is actually Amazon. There's lots of new deployments with Amazon. Amazon's not only buying fuel cells, but electrolyzers from us. That's a big part of our funnel. Walmart, Home Depot, GM, and we actually have a fifth customer, which I'll tell you more about soon when they let me announce, that we'll do over $25 million the second half of the year with. We're feeling the business is really healthy. The factory is packed and I think the nice item is, we're beginning to spread that revenue across a larger and larger customer set. Got you. You mentioned electrolyzers, it sounds like some of the material handling sites will have electrolyzers co-located. Is that a correct statement? More broadly, as you look at that, I think you said billions in the funnel for electrolyzers. Can you give us some color on geography, on customer type? Is it centralized, decentralized? How big are the probable deployments in terms of kilograms per day or whatever? Some kind of color would be helpful. Sure. Paul, if I step back and this is a point that I probably should've made earlier in the call. We're becoming better at bundling the offerings. The Total System Solution now incorporates our electrolyzer technology. If I think about how we go in and sell today, it's we can provide you the electrolyzer, we can provide you fueling stations, we can provide you the material handling equipment and the vehicles, especially in Europe. That ability to bundle is actually probably what attracted both Renault and SK to work so closely with Plug Power. When I look at the deals, if I was going to spread out geography, many of the sites are called 250 MW and above range. The big projects are really centralized sites. Just often centralized sites, which may be spread around three or four different locations that add up to a gigawatt. If you think about 250 MW of electricity, you're talking plants which are in the 500-ton, good size tonnage, hundreds of tons of hydrogen. I think very attractive and I think that's really the mix of sites. From a geography point of view, you see it in Europe, we're seeing it in Australia, we're seeing activity in India. Obviously South Korea, so it's really kind of a mixture across the board. One last question, please. You said that 35 tons of hydrogen's coming online to supplement that which was previously available, and you've seen disruptions. Is this gray or blue hydrogen, and is it subject to the same kind of variability and risks as the hydrogen you were previously consuming domestically? Good question, Paul. It is gray hydrogen. Obviously we want to transfer eventually to green. It's not Plug Power. It is coming off, it's getting cleaned up versus the pipelines, which are tied to large scale storage with caverns. I think the variability of that hydrogen is much, much lower. Got you. Thanks so much. Okay, Paul. Thank you. Our next question is coming from Jed Dorsheimer of Canaccord Genuity. Please go ahead. Hey, how are you, Andy? Good morning, Jed. Good morning. Just two questions. I guess, first, sounds like the contribution of revenues by end market is changing. Today, kind of first time I'm hearing you talk a bit more on the aerospace, or it sounds like that's a bit of shift. I was just wondering, does that change any of the projections? I think on May 10th, you talked about sort of the $475 million, $750 million, $1.7 billion. Are those numbers still solid? Is it just what's kind of the moving parts underneath to support the top line? Yeah. I have a follow-up. Yeah, Jed, they are our numbers today. $475 million is rock solid. We're continuously looking at the $750 million, feel great about. I think when we'll have our Plug Power symposium in September, and I hope you can attend. We'll give you a much broader outlook, not only what we expect for 2024 and 2023, but also what the geographical and product mix will be. Great. I hope you have the symposium. You should have it at the electrolyzer, the gigafactory. That'd be great. I think at the moment we're scheduling Nasdaq, but I think we're debating that, so you're voting on putting it at the gigafactory, eh? Yeah, Nasdaq's not nearly as exciting as being at a gigafactory. I agree, Jed. That's my vote, too. I do have a follow-up, though. As I hear, it's interesting in terms of the European, particularly Germany and France, which really have paradoxical views on energy production. I'm wondering how those conversations, particularly France being pro-nuclear and Germany being quite against, Germany's electricity prices being the highest of any first-world nation. I'm curious, how does hydrogen play into that discussion, and how are the two countries thinking about Plug and hydrogen production? Is there a difference? Yeah. Do you see a difference in scalability? Yeah. First, I think that in both countries, as well as the EU, I think there's a general acknowledgment that to decarbonize, hydrogen's required, and fuel cells are required. It's why, Jed, with Renault, the CEO, Luca. Renault tells me that every time he talks to a minister in France, the first question is, "What are you doing with fuel cells and hydrogen?" I think from a feedstock point of view, I think you're right. I think France is thinking a lot about how to leverage their carbon-free nuclear assets to be the electrical stock for feedstock for hydrogen. I think in Germany, I think folks are thinking more about their renewable curtailment as well as offshore wind as the feedstock for electrolyzers. I think both of them are very committed to fuel cells and hydrogen. I think there is a different view on what the feedstock should be based on their own internal infrastructure. I would think the impact, if I have a base load versus curtailment, while in one I am solving a problem of a subsidized technology being the intermittency for the renewables. In the other, though, it would be lower cost electricity prices. Does that change the dynamic in terms of the value proposition for green hydrogen, or do you see it as net the same? Yeah, I probably see it net. I think that underlying everything is where the cost of renewables are going, and that I think, like the U.S., Europe has, and one has to be thoughtful about numbers that are put out there. I think both Europe and the U.S. strongly feel that hydrogen generated from renewables can be lower cost than hydrogen generated by natural gas. Certainly it's a journey, but it's a journey that I think both nations, France and Germany, feel that it will be the best source of energy for many, many applications. I think commercial vehicles, large-scale stationary, how you support these networks like ports. I think if you look and you hear these numbers, 20% of world energy from hydrogen, they really think hydrogen is really the solution to meet those needs. That's it for me. Thanks, Andy. Thanks, Jed. Thank you. Once again, that's star one if you do have a question. Our next question is coming from Amit Dayal of H.C. Wainwright. Please go ahead. Thank you. Good morning, Andy. Good morning, Paul. Good morning, Amit. How are you today? I'm good, Andy. How are you doing? Very good. Andy, you mentioned 500 MW potentially closing for electrolyzers this year and deployment next year. Is any of this in the current guidance for this year or next year, or would this be incremental? I would say some of it is in the present guidance for next year. For next year? Yep. Okay. It is in the present guidance for this year. Okay. You indicated another large customer. Is this a pedestal-level customer? Yes. Are there any additional pedestal-level customers in the pipeline? Yes, this is a pedestal customer. It's in the auto industry, and it's a global auto manufacturer. The answer to your question is yes, especially in Europe, we have a number of pedestal customers which are pending. Thank you. With recent increases in commodity costs, supply chain challenges, et cetera, has that impacted your CapEx executions? Yeah, that's a good question. Paul, do you want to take a crack at that? I look at our product margins, they seem relatively very healthy. Paul, maybe you want to comment on, I think, some of the construction work we're doing for the gigafactory. I think it's such a modest proportion of what we're doing that it hasn't been that impactful, but maybe you have some thoughts on that, Paul. If you look at our history and even our projections, outside of green hydrogen investments, it's a fairly nominal percentage of sales. Yet, the gigafactory will be pretty impactful from a margin standpoint from many different facets. I don't expect it. It hasn't had a major impact on our product margins, and I don't anticipate it will as we go forward. In fact, the depreciation obviously is a GAAP effect, the margin enhancement will more than offset the depreciation impact because of such a small percentage of CapEx to sales respectively. Understood. Maybe just a high-level question. I don't know if you have an answer to this. Once somebody buys the Total System Solution suite from you guys, with the electrolyzers and all the other components, so this is just buying one set of solutions. How much does that impact a customer's IRR on these types of investments they make? I think that it really simplifies the process for them in it. To be able to go to one place and have someone put the whole solution together for them, I think that's probably the most attractive part of this. I think in the applications they see healthy IRRs, and then you compound it with the fact that they're doing activity that really supports their long-term mission to decarbonize, be it 2035, 2040. I think being able to go to one person and say, "Take care of all this," and having somebody who's an expert in all these technologies, I think is a real differential advantage. Understood. That's all I have. Thank you, Andy. Thank you, Paul. All right. Thanks, Amit. Thank you. Our next question is coming from Chris Souther of B. Riley. Please go ahead. Hey, good morning, guys. Good morning, Chris. Awesome. The first piece I wanted to touch on was the fueling margins. You talked about improvements there in the second half and into 2022 as some of these industrial gas partners are expanding capacity. The longer-term targets of about 30%. Maybe you can just discuss when and where we see those breakeven levels as far as positive gross margin. Is that really once the first three facilities are coming online, we'll start to see that kind of switchover? Chris, I think you'll see gradual improvements, and you'll see we'll have some improvements with our own additional capacity coming online in October. I think you'll start seeing that transition called mid-2022. Okay. No, that's helpful. You mentioned Amazon's now buying electrolyzers, which is great to hear, and that 80% of the electrolyzer opportunities are coming from abroad. Can you maybe walk through the customer decision you're seeing between buying their own electrolyzers versus signing up for long-term hydrogen offtake agreements with the facilities you guys are building out? It sounded like Home Depot, Southern Company were more in the offtake, but I'm curious if it's really site specific, geography specific, customer specific, how everybody's looking at that kind of build it themselves versus buying it from you guys over time. I think if you look at it, as you mentioned, I think it's a real mix. I think that there are companies that are building hydrogen networks in other parts of the world in which their main business is selling hydrogen. I think that when you're looking at the smaller deployments, I have some activity going on in New Zealand, for example, which is smaller. There, people are more inclined to buy small scale electrolyzers to support. I think most large enterprises that are call it the Amazon, the Walmarts of the world, I think their primary focus will be they'll want to buy green hydrogen from us. I think there'll be opportunities where their facilities already have a low cost renewable energy feed, which makes sense to use electrolyzers. I think there are companies that we deal with who are primarily users of hydrogen, and I think they will want to buy hydrogen from us. There are companies which are primarily, what I'll call, want to be suppliers of hydrogen, and I think they'll be more of our electrolyzer base. Then I think along the way, you'll have a mixture of the two, but I think from a primary space point of view, that's how I think it'll line up. Okay. No, that's very helpful. Thanks, guys. Thanks, Chris. Thank you. Our next question is coming from Tristan Richardson, who will be our final question for today, and he's with Truist Securities. Please go ahead. Hey, good morning, gentlemen. Thanks for squeezing me in. Good morning, Tristan. Just quick one, Andy, on stationary power. Appreciate the update- Yeah. ...on the order book or opportunities you're seeing this year, but curious about how that trends throughout the back half of the year and into next year. Could we see a stationary power customer become a pedestal customer over time? Oh. Conversely, could you see a pedestal customer become a stationary power customer over time? Yes and yes. Boy, Tristan, you asked a question, and you're going to get an hour into the call, and you're going to get a new answer. We have over a hundred customers in the funnel for the stationary products. They range from large scale data center customers, which could become pedestal customers, to folks who are our present customers today, which are looking to back up their distribution centers with hydrogen since it's already available. Every Monday, like most businesses, I do a review, and each week of the month, I do a different market, and it was our stationary products. The funnel for that is astonishing. Many of those customers could become pedestal customers. Helpful, Andy. Thank you. Then just quick follow-up. Appreciate all the commentary on electrolyzer opportunity you're seeing. Specifically in your letter, you noted deployments this year in New York, Georgia, and Europe. Just thinking, is there a way to think about how much of that is third party versus deployments for your own internal needs? I guess you're talking about, Tristan, the green hydrogen plants we're building. Ultimately, you used the word our own internal needs. The more that's captured by our own internal needs for on-road vehicles and other applications, it becomes significant. I would think that by 2025, about 75% of that will be consumed by our own internal needs, if not more. When I say that, it's hydrogen that we're selling to pedestal customers for all the applications that we're developing. That's great. Appreciate it. Thank you guys very much. All right. Well, thank you everyone for joining our call today. I really appreciate everyone's attention, and I really look forward to talking to everyone for the second quarter, which should be late July, early August. Thank you, everybody. Bye now. Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time, and have a wonderful day.