Weichai Power Licenses Ceres Power’s SOFC Tech, Eyes AI Data Center Market

Ceres Power (LON: CWR) shares are poised for potential upside following the announcement that Weichai Power, a major Chinese OEM, has signed a manufacturing license agreement for Ceres' solid oxide fuel cell (SOFC) technology.

This deal expands Ceres' global manufacturing footprint and positions them to capitalize on the growing demand for efficient power solutions, particularly in the burgeoning AI data center market.

The agreement builds upon an already established commercial relationship between the two companies. Weichai will now manufacture cells and stacks for its stationary power systems, superseding previous agreements.

This move further diversifies Ceres' manufacturing partnerships, bringing the total to four, and promises notable revenue generation through license fees, milestones, and royalties, consistent with prior licensing deals.

Weichai plans to establish a dedicated manufacturing facility producing cells and stacks for stationary power applications.

The target markets include power for AI data centers, commercial buildings, and industrial facilities. The integration of SOFC systems will complement Weichai's existing power generation portfolio, which includes gas engines and powertrains.

Revenue recognition from the license fees is anticipated to occur in FY26, leaving the FY25 revenue guidance unchanged.

Phil Caldwell, CEO of Ceres, stated, “We are excited to extend our relationship with Weichai with a manufacturing licence to produce Ceres-based products in China, further expanding the ecosystem for our technology…Adding Ceres' high efficiency SOFC that can be deployed where the power is needed at pace represents a multi-billion market opportunity and continues our mission to establish Ceres as the industry standard solid oxide technology.”