Plug Power (PLUG), a prominent name in the clean energy sector, has found itself in increasingly stormy waters following a recent announcement by the U.S. Department of Energy (DOE). On May 30, the DOE revealed a sweeping cut of approximately $3.7 billion in grants allocated for clean energy projects, sending shockwaves through the sector. The DOE’s decision represents a sharp policy reversal from former President Joe Biden’s robust support for renewable energy initiatives. Although Plug was not directly affected, the move sparked broader concerns about the company’s outlook, as significant funding it had been relying on was abruptly placed under review under President Donald Trump, with apparently diminishing chances of approval.

In this article, we’ll break down what the DOE’s funding cuts mean for Plug Power, how the changing political landscape could derail its growth ambitions, and why investors may want to reconsider their exposure to this once high-flying clean energy stock.

About Plug Power Stock

Valued at a market cap of $1.05 billion, Plug Power (PLUG) is a notable player in the green hydrogen industry, specializing in hydrogen fuel cell technologies. The company is building a comprehensive green hydrogen ecosystem, spanning production, storage, delivery, and energy generation, to support its customers’ business objectives and contribute to economy-wide decarbonization. Its offerings include the GenDrive fuel cell system for material handling vehicles such as forklifts, GenSure stationary fuel cells for grid support, and ProGen fuel cell engines designed for a range of applications. It also offers GenFuel, a comprehensive solution for hydrogen production, storage, and dispensing.

Shares of the ailing hydrogen fuel cell product solutions provider have slumped 51.6% on a year-to-date basis.

Plug Remains Under Pressure from U.S. Regulatory Challenges

Clean energy stocks, including Plug Power, have taken a significant hit this year as the Trump administration targeted the sector with funding cuts, policy changes, and import restrictions. The latest move came on May 30, when the Energy Department (DOE) announced $3.7 billion in funding cuts for clean energy and climate initiatives, with a significant share of the canceled grants targeting carbon capture and sequestration projects. This represents a stark shift from the previous administration’s policies, which pumped billions into the sector.

The DOE stated that the decision followed findings that the projects “failed to advance the energy needs of the American people, were not economically viable, and would not generate a positive return on investment of taxpayer dollars.” Of the 24 projects canceled in the move, 16 were awarded between Election Day and Trump’s inauguration, the agency said in a statement. Bloomberg reported that the canceled awards included $331 million for Exxon Mobil (XOM) to replace natural gas (NGN25) with hydrogen at its Baytown, Texas, Olefins Plant; $170 million for Kraft Heinz (KHC) to pursue a range of clean energy projects; and $500 million for Heidelberg Materials (HDLMY) to develop a low-carbon cement initiative, according to a list provided by the DOE.

Although Plug Power wasn’t directly affected by this round of funding cuts, the move raises broader concerns for the company. Plug received a nearly $1.7 billion loan guarantee from the DOE in early January to support six zero- and low-carbon hydrogen production projects, but the Trump administration has since placed the loan under review, effectively putting it on hold. The latest developments increase the likelihood that the funding will be revoked, potentially further delaying Plug’s path to profitability or even pushing the company toward bankruptcy.

Plug stated that it was continuing to “monitor the evolving landscape.” Moreover, the company recently requested shareholder approval for a reverse stock split and an increase in its authorized share count in a bid to stay afloat, as it now faces the risk of being delisted from the Nasdaq Exchange. “Without an increase in the number of authorized shares... we may be constrained in our ability to address ongoing needs and pursue opportunities,” Plug warned in a letter to investors.

“There are going to be some companies that do fall away because they do not have strong fundamentals. But a lot of high-quality companies that do not receive the funding will not scale,” said Amy Duffuor, general partner at Azolla Ventures, a climate-focused venture capital investor. 

Potential Loss of Hydrogen Production Tax Credit Presents Major Headwind for PLUG

The major threat to the company stems not from government funding cuts, but from Trump’s tax-and-spending bill, which contains a provision to eliminate the generous 45V clean hydrogen production tax credit. The tax bill, which passed the House of Representatives along party lines in May with a 215-214 vote, is now under Senate consideration, with a vote on approval expected by August. If finalized, the elimination of the 45V credit would deal a significant blow to nearly all announced green hydrogen projects in the U.S.

The legislation proposes ending 45V eligibility for any hydrogen projects that begin construction after Dec. 31, 2025, effectively stripping it of its long-term, broad-based impact. Under the current Inflation Reduction Act (IRA), the tax credit provides up to $3 per kilogram of hydrogen produced through 2033. Notably, the IRA’s 45V tax credit spurred a 247% increase in planned U.S. hydrogen production capacity between Q2 2022 and Q4 2024, reaching 18.53 million tonnes annually. However, with Republicans aiming to roll back Biden-era clean energy policies, the bill’s passage in the House represents a direct threat to the future of hydrogen development in the U.S.

For Plug Power, the proposed expiration of the hydrogen production tax credit would significantly undermine its business plan, which relies on building a nationwide network of green hydrogen plants. The construction of new plants was planned to be funded by the DOE loan, but with the loan currently under review and its approval increasingly unlikely, the company is facing a double setback. Without new green hydrogen plants and the support of related production tax credits, the company’s hydrogen fueling business is likely to continue incurring significant losses in the foreseeable future. Additionally, without tax credits, most third-party green hydrogen projects in the U.S. would likely be halted, further limiting Plug Power’s ability to sell electrolyzers and liquefaction equipment in the domestic market.

How Did Plug Power Perform in Q1?

On May 12, Plug Power released its earnings results for the first quarter of 2025. The company’s top line grew 11.1% year-over-year to $133.7 million, driven by higher electrolyzer deliveries, sustained demand in material handling, and continued deployments across its cryogenic platform. The result aligned with the company’s guidance and exceeded Wall Street’s consensus estimate by $1.88 million.

The company’s growth was supported by several milestones, including the expansion of its hydrogen production capacity to 40 tons per day across three operational plants. The momentum appeared to continue in Q2, as the company recently reported that its Woodbine, Georgia, hydrogen plant produced 300 metric tons of liquid hydrogen in April — the facility’s highest monthly output to date.

On the profitability front, PLUG narrowed its gross margin loss in Q1, supported by ongoing supply chain optimization, continued cost reductions, price hikes, and progress in scaling its hydrogen platform. With that, gross margin loss improved to -55% from -132% in the year-ago quarter. Still, during the Q1 earnings call, management revised its earlier forecast of reaching positive gross margins in Q4 2025 and is now aiming for breakeven by year-end. Meanwhile, PLUG’s net loss per share stood at $0.21 in Q1, missing expectations by $0.02. Despite some progress, regulatory challenges are expected to heavily affect the company’s path to profitability going forward.

Now, let’s shift focus to another major source of concern, which is liquidity. As of March 31, Plug held $295.8 million in cash and cash equivalents. After the quarter ended, the company secured an expensive debt facility of up to $525 million from its existing lender, Yorkville Advisors. Given the Q1 cash burn of $152.1 million — and assuming it remains at a similar or lower level in the coming quarters due to the cost-saving Project Quantum Leap initiative — PLUG’s liquidity seems adequate for the rest of the year. Still, the outlook for next year remains uncertain, as Plug’s low share price restricts its funding options, particularly its ability to pursue additional equity offerings.

Looking ahead, management projects Q2 revenue to range between $140 million and $180 million, with improvements in gross margin and working capital performance anticipated throughout the rest of 2025.

According to Wall Street estimates, the company’s net loss is expected to narrow by 78% year-over-year to $0.59 per share for fiscal 2025, while revenue is projected to grow 16.69% year-over-year to $733.76 million. Notably, analysts currently expect that the company will remain unprofitable until fiscal 2030.

Options Market Sentiment on PLUG Stock

Examining the option chain for September 19, 2025, the $1.00 CALL option has a bid/ask spread of $0.23/$0.25, while the $1.00 PUT option shows a spread of $0.25/$0.30. Please note that this option strike price is the closest to the current stock price. Now, let’s calculate the expected price movement based on the midpoint prices of these options:

0.2750 (1.00 put) + 0.2400 (1.00 call) = 0.5150/0.9692 = 53.1%

Based on current pricing, the options market implies that PLUG stock could move approximately 53% from the $1.00 strike price by September’s options expiration, utilizing the long straddle strategy. That would place the stock in a trading range of $0.46 to $1.48.

Notably, put options at the $1.00 strike price outnumber call options by a ratio of 1.66 to 1, with 20,664 open puts compared to 12,462 open calls. This reflects a bearish sentiment, suggesting that options traders are betting on PLUG stock underperforming in the coming month, reinforcing the broader bearish case for the company.

What Do Analysts Expect For PLUG Stock?

Overall, Wall Street analysts remain cautious on Plug Power stock, as evidenced by the consensus “Hold” rating. Out of the 23 analysts covering the stock, six recommend a “Strong Buy,” 13 advise holding, and the remaining four have a more bearish outlook with a “Strong Sell” rating.