By Puja Tayal at The Motley Fool Canada
A Tax-Free Savings Account (TFSA) is a place to hold future wealth creators. This requires you to look beyond the present and take risks on what could change the future. A technology that can resolve the issue of transportation fuel could be a game-changer. One Canadian company working on such a technology is Ballard Power Systems (TSX:BLDP).
A stock to keep in your TFSA forever
Ballard Power Systems makes hydrogen fuel cells, or proton exchange membrane (PEM) fuel cell power systems, for buses, trucks, trains, marine, and stationary power. While hydrogen fuel cells are a zero-emission transportation fuel, their biggest challenge is cost.
Like all new technologies, the cost is reduced over time through innovation, adoption, and operational efficiency. Ballard has been making efforts to bring its fuel cells on par with diesel systems. These efforts were supported by government adoption and incentives, especially for city transit. Ballard tested the product in Europe and North America, where the addressable market size was large, and government policies were favourable.
2025 marks a turnaround for Ballard Power Systems
Years of disciplined capital allocation, product cost reduction, clearer commercial adoption pathways, and operational efficiency helped Ballard achieve its first-ever gross profit margin of 5% in 2025. This marks a turnaround for Ballard, which has been funding its losses with its cash reserves.
| In US$ Millions | 2024 | 2025 | 2026* |
| Revenue | $69.73 | $99.37 | |
| Gross margin % | -32% | 5% | |
| Total Operating Expenses | $161.30 | $108.90 | $70 |
| Net loss from continuing operations | $323.50 | $90.90 |
You should understand the contractual obligations of Ballard, which could be a key differentiator in profit and loss. Since fuel cells are a new technology, Ballard handles end-to-end maintenance, warranty, and installation of fuel cell systems. Some contracts become unprofitable to implement and incur a termination cost. The inventory also loses value with technology upgrades.
Ballard makes a provision for all three risks that affect its gross margin. In 2025, these provisions reduced to US$10.4 million from US$12 million in 2024. As the company improves its product performance and commercial adoption, these provisions will reduce and help it achieve commercial profitability.
Three reasons to buy and hold Ballard stock in TFSA forever
Ballard Power Systems has given an optimistic outlook for 2026. It aims to reduce its operating expenses to US$70 million from US$108.9 million in 2025.
Order book
As of December 31, 2025, Ballard Power Systems has an order backlog of US$119.3 million, of which US$53.9 million is scheduled to be delivered in 12 months. This order book gives clarity in revenue for 2026. However, these figures could be revised if some contracts become onerous and are terminated.
In the long term, a clearer path to commercial adoption could make the order book Ballard’s strength and drive the stock price.
New products
The key growth catalyst for Ballard stock will come from new products. In September and October 2025, its share price surged 106% as the company launched a new-generation transit fuel cell module, the FCmove-SC, which significantly reduces operating cost and makes the total cost of ownership competitive to diesel systems.
New management
On July 31, 2025, Ballard appointed Marty Neese as president and CEO to lead its transition from research phase to commercialization. Neese will lead the company to positive cash flow by 2027 by optimizing working capital, improving pricing, controlling costs, and prioritizing markets.
The company will focus on products with the strongest commercial traction and discontinue non-core programs. Its product development efforts will focus on reducing system costs, accelerating next-gen stack, and driving higher margin offerings.
This could see a fundamental reset for Ballard in 2026 and beyond, a perfect time to buy the stock before it becomes overvalued.
TFSA investing strategy
Ballard stock has already surged 50% since the 2025 earnings release in early March and is trading at $4. It is still a buy-and-hold stock. A good strategy could be to allocate 5-10% of your TFSA portfolio to this stock by accumulating its shares $100 at a time.
The post 1 Canadian Stock I’d Be Happy to Keep in My TFSA Forever appeared first on The Motley Fool Canada.
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Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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