Why plug-in power stock up 7%

Power socket (PLUG 8.04%) the stock was up 7.1% by 10:50 a.m. ET Monday on “news” that hydrogen power is becoming more popular.

on weekends BMW (BAMXF -0.21%) (BMWYY -0.59%) has announced plans to mass-produce its first hydrogen fuel cell automobile, with assistance from Toyota Motor (TM -0.14%). And given that Plug Power aims to become the world’s largest producer of liquid hydrogen for use in hydrogen-powered cars, it makes sense for investors to flock to Plug Stock this morning.

Toyota + BMW + plug?

There are caveats to this story, however. First, the fact that it is not entirely “news”. Actually, Nikkei Asia reported on the Toyota and BMW collaboration two weeks ago. That said, new details about the partnership are being released today.

First, the launch date for the new fuel cell electric vehicle (FCEV): InsideEVs reports that it will arrive in 2028. And we know that Toyota will supply BMW with the latest generation of third-generation hydrogen fuel cells for use in the car.

Also, according to InsideEVs, BMW is committed to the project, having designed its “Neue Klasses” (new class) vehicle architecture specifically to incorporate hydrogen fuel tanks in space that will be used to house the batteries in other EV models. That could be good news for Plug — a vote of support for the fuel of choice.

Does this make Plug Stock a buy?

Other details of the announcement are less auspicious. Most importantly, the 2028 target date means Plug will have to wait a while for any revenue to flow from hydrogen fuel sales to BMW owners.

That means Plug has to get by without any help from BMW FCEV owners buying their hydrogen fuel for at least another four years. Given that the company only has $62 million in cash and $916 million in debt and is burning through $1.5 billion a year right now, there’s no guarantee that Plug will be around in four years to sell that fuel.