Mr. Randy MacEwen reports

BALLARD CLOSES TRANSACTION WITH BROAD-OCEAN FOR FUEL CELL ENGINE MANUFACTURE & SALES IN CHINA

Ballard Power Systems Inc. has closed the transaction announced in February, 2017, relating to technology transfer, licensing and supply arrangements with strategic partner Zhongshan Broad-Ocean Motor Co. Ltd. (Broad-Ocean) for the assembly and sale of FCveloCity 30-kilowatt (kw) and 85 kw fuel cell engines in China.

Under the deal, Broad-Ocean will manufacture fuel cell modules in three strategic regions in China, including Shanghai. The deal has an estimated value of approximately $25-million in revenue to Ballard over the initial five-year term, including $12-million in technology solutions revenue. As of closing, Ballard received initial payments totalling $3.6-million.

Randy MacEwen, Ballard president and chief executive officer, said: "This transaction is an exciting step forward in our response to the converging macro trends in China, including large-scale urbanization, continued buildout of mass urban transportation, degrading air quality and a mandate to address climate change. Our strategic partnership with Broad-Ocean is a central piece in our China strategy, premised on the establishment of a comprehensive local fuel cell supply chain and related ecosystem to address the fast-growing clean energy bus and commercial vehicle markets."

In each of the three assembly operation locations, Broad-Ocean plans to engage with local governments as well as with bus and commercial vehicle OEMs for deployment of fuel cell buses and commercial vehicles incorporating Ballard-designed modules manufactured by Broad-Ocean.

Broad-Ocean will make further payments to Ballard based on certain commissioning milestones, initial supply agreements and recurring royalties. Ballard will also have the exclusive right to purchase fuel cell engines from any of the Broad-Ocean manufacturing operations for sale outside China.

Each fuel cell engine assembled by Broad-Ocean will utilize FCvelocity-9SSL fuel cell stacks, initially manufactured by Ballard at its Vancouver HQ facility. Stack supply will be transferred to Guangdong Synergy Ballard Hydrogen Power Co. Ltd. (JVCo), the joint venture owned by Guangdong Nation Synergy Hydrogen Power Technology Co. Ltd. (Synergy) and Ballard in the city of Yunfu in China's Guangdong province, once JVCo becomes fully operational, expected in late 2017. From that time forward, Ballard will supply membrane electrode assemblies (MEAs) on an exclusive basis for stacks manufactured by JVCo.

Founded in 1994, Broad-Ocean is headquartered in the city of Zhongshan in Guangdong province and is listed on the Shenzhen Stock Exchange. The company is a leading global manufacturer of motors that power small and specialized electric machinery for electric vehicles (EVs), including buses, commercial vehicles and passenger vehicles, and for heating, ventilation and air conditioning (HVAC). Broad-Ocean produces more than 50 million motors annually for customers on five continents. On Aug. 18, 2016, Broad-Ocean became Ballard's largest shareholder following an investment of $28.3-million in Ballard common shares, representing approximately 9.9 per cent of Ballard's outstanding common shares following the transaction.

About Ballard Power Systems Inc.

Ballard Power Systems provides clean energy products that reduce customer costs and risks, and helps customers solve difficult technical and business challenges in their fuel cell programs.

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