Universal Hydrogen, the innovative hydrogen plane company that successfully flew a partially hydrogen-powered aircraft last year in Moses Lake, has exhausted its $100 million in investor funding and is shutting down.
Prominent Player in Hydrogen Flight
The company was a notable player in the hydrogen aviation sector, focusing on designing and developing hydrogen plane technology to enable more sustainable, emission-free flights by utilizing hydrogen instead of traditional jet fuel.
In March of the previous year, one of Universal Hydrogen’s designs took flight from Moses Lake, garnering celebration in Washington State, including praise from Governor Jay Inslee, as a major clean energy breakthrough.
Continued Acclaim
In March 2024, the company was still receiving recognition, being named one of Fast Company magazine’s “Most Innovative Companies of 2024.” Additionally, Aviation Week highlighted the company’s preparation for further propulsion-system testing and upcoming test flights.
Shareholders recently received a letter from Universal Hydrogen’s CEO and Chair, Mark Cousin, announcing the board’s decision to close the company due to unsuccessful attempts to secure additional funding.
Funding Hurdles and Unfulfilled Merger
“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,” explained Cousin in the letter.
He also mentioned that the company had explored a rights offering with existing investors, but the interest was insufficient.
Pride in Accomplishments
Despite the closure, the company expressed pride in its achievements and the contributions made by its team.
“We are deeply proud of the work the team has done to create the first commercially viable hydrogen aviation ecosystem,” Cousin’s letter concluded. “It is our sincere hope that these efforts will live on as part of a future entity.”
Challenges Facing Hydrogen Aviation
Paul Eremenko, the former Airbus Chief Technology Officer with a focus on clean energy, founded Universal Hydrogen in 2020. He aimed to address the looming existential crisis in air transportation due to the climate crisis and the increasing need for decarbonization.
The company’s initial fundraising efforts were successful, thanks to Eremenko’s leadership and technical expertise, which resonated with Silicon Valley investors. However, over time, private equity firms became less enthusiastic due to the looming risk of a recession and persistently high interest rates.
Uncertainty Surrounding US Election
Another significant obstacle to attracting further investment was the uncertainty surrounding the upcoming US election.
“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 explained in his letter.
Final Merger Attempt and Liquidation
Eremenko attempted to salvage the company by pursuing a merger with a regional airline to retrofit their existing fleet for hydrogen power. Media reports indicated that discussions were held with Silver Airways in Florida. However, “the merger did not come to fruition, and Universal Hydrogen is now liquidating,” stated Eremenko.