SEATTLE – Universal Hydrogen, the pioneering company that made headlines with its partially hydrogen-powered flight from Moses Lake in March last year, has burned through its $100 million investment and is now closing its doors, according to an article published by the Seattle Times.
Universal Hydrogen was among the few companies striving to replace fossil-fuel-powered aviation with sustainable, emissions-free technology by using hydrogen to power aircraft engines instead of jet fuel. The company’s maiden flight at Moses Lake was celebrated as a significant milestone in Washington state’s clean energy advancements, with Governor Jay Inslee praising it as one of the state’s clean energy breakthroughs.
In March, Fast Company listed Universal Hydrogen among its “Most Innovative Companies of 2024,” and just last month, Aviation Week reported that the startup was preparing for ten new flight tests and was busy with propulsion-system testing behind the scenes.
However, in a letter to shareholders on Thursday, Universal Hydrogen Chairman and CEO Mark Cousin announced that the board had formally decided to wind up the company after unsuccessful attempts to secure additional financing.
“We were unable to secure sufficient equity or debt financing to continue operations and similarly were unable to secure an actionable offer for a sale of the business or similar strategic exit transaction,” Cousin wrote. The company also approached existing investors for a rights offering but found insufficient interest.
“We are deeply proud of the work the team has done to create the first commercially viable hydrogen aviation ecosystem,” Cousin concluded in his letter. “It is our sincere hope that these efforts will live on as part of a future entity.”
Universal Hydrogen was founded by Paul Eremenko, a clean-energy visionary and former chief technology officer at Airbus. Eremenko’s charisma and technical expertise initially bolstered the company’s fundraising efforts in Silicon Valley. Although he is still listed as CEO on the company website, Eremenko confirmed via email that he left at the end of April.
He cited higher interest rates and fears of an impending recession as reasons private equity firms cooled to the concept. The approaching U.S. election also posed a challenge. “If [Donald] Trump were to win, investors saw a significant risk that the massive green hydrogen subsidy enacted as part of the Biden Inflation Reduction Act would disappear,” Eremenko wrote.
Negotiations for $20 million in funding from a Saudi investment fund fell through, according to documents viewed by The Seattle Times. In a last-ditch effort to save the company, Eremenko said management attempted to merge with Florida-based Silver Airways, a regional airline that would retrofit its planes with hydrogen power. However, Silver Airways has been losing money and funding its operations with debt, and the merger did not materialize.
“I am sad to hear that the merger did not come to fruition and Universal Hydrogen is now liquidating,” Eremenko said.
The company faced immense challenges from the start. Based in Los Angeles, Universal Hydrogen had to engineer a hydrogen-powered propulsion system and create a new logistics infrastructure to deliver hydrogen fuel at airports. Hydrogen fuel also takes up more space on planes than jet fuel, reducing passenger capacity. Additionally, the project relied on a large, reliable supply of “green hydrogen,” produced using electricity from renewable sources, which is currently scarce.
Universal Hydrogen designed its propulsion system to be retrofitted on regional airplanes and worked on developing an airport ecosystem where hydrogen could be delivered by trucks in large cylindrical modules. In March 2023, a small crowd of investors and press witnessed a pioneering flight at Moses Lake, where a De Havilland Canada Dash 8-300 turboprop retrofitted by Universal Hydrogen took off with one engine powered by hydrogen fuel cells and the other by regular jet fuel.
Later that year, Universal moved its flight operations to Mojave, California, and began retrofitting a larger regional airplane, the ATR 72, in Toulouse, France. The goal was to create the necessary infrastructure to deliver hydrogen to airports worldwide. However, Cousin’s letter revealed that the company’s French unit will also be liquidated.
Eremenko expressed pride in Universal’s achievements despite its shortcomings. “I hope that our efforts form the foundation for the future of carbon-free flight,” he wrote.
The closure of Universal Hydrogen leaves ZeroAvia as the sole major player aiming to power planes with hydrogen. Also headquartered in California, ZeroAvia has a research and development facility at Paine Field in Everett, where a team of about 40 people is working on producing the hydrogen propulsion system.
Source: Seattle Times