Document


			Condensed Consolidated Interim Financial Statements (Expressed in U.S. dollars) BALLARD POWER SYSTEMS INC. Three and six months ended June 30, 2025 and 2024

BALLARD POWER SYSTEMS INC.

Condensed Consolidated Interim Statements of Financial Position

Unaudited (Expressed in thousands of U.S. dollars)


	Note	June 30, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents		$	550,035	$	603,948
Short-term investments		2,110		2,104
Trade and other receivables	5	23,421		31,983
Inventories	6	68,872		56,417
Prepaid expenses and other current assets		2,882		4,426
Total current assets		647,320		698,878
Non-current assets:
Property, plant and equipment	7	28,897		30,424
Intangible assets	8	1,765		1,757
Equity-accounted investments	9	7,218		8,238
Long-term financial investments	10	50,149		37,515
Other non-current assets		507		495
Total assets		$	735,856	$	777,307
Liabilities and Equity
Current liabilities:
Trade and other payables	12	$	33,486	$	35,637
Deferred revenue	13	8,578		6,643
Provisions and other current liabilities	14	24,230		30,407
Current lease liabilities	15	3,245		2,899
Total current liabilities		69,539		75,586
Non-current liabilities:
Non-current lease liabilities	15	20,481		20,995
Deferred gain on finance lease liability	15	—		69
Non-current deferred revenue	13	7,058		4,989
Other non-current liabilities and employee future benefits	16	2,832		2,678
Total liabilities		99,910		104,317
Equity:
Share capital	17	2,430,628		2,428,618
Contributed surplus	17	314,007		309,974
Accumulated deficit		(2,106,153)		(2,060,837)
Foreign currency reserve		(2,536)		(4,765)
Total equity		635,946		672,990
Total liabilities and equity		$	735,856	$	777,307

See accompanying notes to condensed consolidated interim financial statements.

Approved on behalf of the Board:


“Kathy Bayless”			“Jim Roche”
Director			Director

BALLARD POWER SYSTEMS INC.

Condensed Consolidated Interim Statements of Loss and Comprehensive Loss

Unaudited (Expressed in thousands of U.S. dollars, except per share amounts and number of shares)


		Three months ended June 30,				Six months ended June 30,
	Note	2025		2024		2025		2024


Revenues:
Product and service revenues	18	$	17,842	$	16,003	$	33,231	$	30,455
Cost of product and service revenues		19,337		21,127		38,334		40,994
Gross margin		(1,495)		(5,124)		(5,103)		(10,539)

Operating expenses:
Research and product development		18,176		25,535		36,281		50,843
General and administrative		4,788		6,092		9,453		12,961
Sales and marketing		2,399		4,419		4,854		7,602
Other expense	19	6,342		182		6,569		1,882
Total operating expenses		31,705		36,228		57,157		73,288

Results from operating activities		(33,200)		(41,352)		(62,260)		(83,827)
Finance income and other	20	10,819		11,015		22,320		13,724
Finance expense	20	(495)		(590)		(1,001)		(1,021)
Net finance income		10,324		10,425		21,319		12,703

Equity in loss of investment in joint venture and associate	9 & 21	(444)		(468)		(1,262)		(1,302)
Impairment charges on property, plant and equipment	7	(939)		—		(3,162)		—
Gain on sale of assets	7	3		—		73		—


Loss before income taxes		(24,256)		(31,395)		(45,292)		(72,426)

Income tax expense		(24)		(68)		(24)		(103)
Net loss for the period from continued operations		$	(24,280)	$	(31,463)	$	(45,316)	$	(72,529)

Net loss for the period from discontinued operations	22	—		(1)		—		(227)
Net loss for the period		$	(24,280)	$	(31,464)	$	(45,316)	$	(72,756)

Other comprehensive loss:

Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences		1,700		(277)		2,229		(1,179)
Total comprehensive loss for the period		$	(22,580)	$	(31,741)	$	(43,087)	$	(73,935)

Basic and diluted loss per share
Loss per share for the period		$	(0.08)	$	(0.11)	$	(0.15)	$	(0.24)
Weighted average number of common shares outstanding		299,844,902		299,392,029		299,682,481		299,201,382


See accompanying notes to condensed consolidated interim financial statements.

BALLARD POWER SYSTEMS INC.

Condensed Consolidated Interim Statements of Changes in Equity

Unaudited (Expressed in thousands of U.S. dollars except number of shares)


								Foreign
	Number of	Share		Contributed		Accumulated		currency		Total
	shares	capital		surplus		deficit		reserve		equity
Balance, December 31, 2024	299,438,116	$	2,428,618	$	309,974	$	(2,060,837)	$	(4,765)	$	672,990

Net loss	—	—		—		(45,316)		—		(45,316)

RSUs redeemed (note 17)	429,960	2,010		(2,540)		—		—		(530)

Share-based compensation (including restructuring) (note 17)	—	—		6,573		—		—		6,573
Other comprehensive loss:
Foreign currency translation for foreign operations	—	—		—		—		2,229		2,229
Balance, June 30, 2025	299,868,076	$	2,430,628	$	314,007	$	(2,106,153)	$	(2,536)	$	635,946


								Foreign
	Number of	Share		Contributed		Accumulated		currency		Total
	shares	capital		surplus		deficit		reserve		equity
Balance, December 31, 2023	298,935,706	$	2,425,641	$	306,042	$	(1,737,505)	$	(2,962)	$	991,216

Net loss	—	—		—		(72,756)		—		(72,756)


RSUs redeemed (note 17)	318,164	2,365		(3,190)		—		—		(825)
Options exercised (note 17)	154,509	472		(164)		—		—		308
Share-based compensation (note 17)	—	—		5,368		—		—		5,368
Other comprehensive income:

Foreign currency translation for foreign operations	—	—		—		—		(1,179)		(1,179)
Balance, June 30, 2024	299,408,379	$	2,428,478	$	308,056	$	(1,810,261)	$	(4,141)	$	922,132

See accompanying notes to condensed consolidated interim financial statements.

BALLARD POWER SYSTEMS INC.

Condensed Consolidated Interim Statements of Cash Flows

Unaudited (Expressed in thousands of U.S. dollars)


		Six months ended June 30,
	Note	2025		2024
Cash provided by (used in):
Operating activities:
Net loss for the period		$	(45,316)	$	(72,756)
Adjustments for:
Depreciation and amortization	7 & 8	1,949		7,339
Deferred gain amortization on finance lease agreement	15	(69)		(208)
Impairment loss on trade receivables		731		1,691
Inventory impairment (reversal) and onerous contracts provision adjustments	6	(2,506)		2,173
Unrealized (gain)/loss on forward contracts		(686)		611
Equity in loss of investment in joint venture and associate	9 & 21	1,262		1,302
Net (increase) decrease in fair value of investments	10, 20 & 25	(7,771)		4,623
Gain on sale of assets	7	(73)		—

Impairment loss on property, plant and equipment	7	3,162		—



Accretion (dilution) on decommissioning liabilities	16	165		(48)

Employee future benefits plan contributions		(11)		(11)
Share-based compensation (including restructuring)	17	6,655		5,368


		(42,508)		(49,916)
Changes in non-cash working capital:
Trade and other receivables		7,715		17,749
Inventories		(13,579)		(16,914)
Prepaid expenses and other current assets		2,218		(356)
Trade and other payables		(3,151)		(8,660)
Deferred revenue		4,004		4,493
Warranty provision		563		(1,491)
		(2,230)		(5,179)
Cash used in operating activities		(44,738)		(55,095)

Investing activities:

Contributions to long-term investments	10	(4,863)		(6,003)

Additions to property, plant and equipment	7	(4,666)		(9,181)
Investment in intangible assets	8	(337)		(887)
Proceeds on sale of assets	7	80		—


Cash used in investing activities		(9,786)		(16,071)

Financing activities:
Principal payments of lease liability	15	(1,486)		(1,799)
Net proceeds on issuance of share capital from stock option exercise	17	—		308
Cash used in financing activities		(1,486)		(1,491)

Effect of exchange rate fluctuations on cash and cash equivalents held		2,097		(441)

Decrease in cash and cash equivalents		(53,913)		(73,098)
Cash and cash equivalents, beginning of period		603,948		751,130
Cash and cash equivalents, end of period		$	550,035	$	678,032

Supplemental disclosure of cash flow information (note 23).

See accompanying notes to condensed consolidated interim financial statements.


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

1. Reporting entity:

The principal business of Ballard Power Systems Inc. (the “Corporation”) is the design, development, manufacture, sale and service of proton exchange membrane ("PEM") fuel cell products for a variety of applications, focusing on power products for bus, truck, rail, marine, stationary and emerging market (material handling, off-road and other) applications, as well as the delivery of services, including technology solutions, after sales service and training. A fuel cell is an environmentally clean electrochemical device that combines hydrogen fuel with oxygen (from the air) to produce electricity.

The Corporation is a company domiciled in Canada and its registered office is located at 9000 Glenlyon Parkway, Burnaby, British Columbia, Canada, V5J 5J8. The condensed consolidated interim financial statements of the Corporation as at and for the three and six months ended June 30, 2025 and 2024 comprise the Corporation and its subsidiaries.

2. Basis of preparation:

(a) Statement of compliance:

These condensed consolidated interim financial statements of the Corporation have been prepared in accordance with International Accounting Standard (“IAS”) 34 Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”), on a basis consistent with those material accounting policies followed in the most recent annual consolidated financial statements, and therefore should be read in conjunction with the December 31, 2024 audited consolidated financial statements and the notes thereto.

The condensed consolidated interim financial statements were authorized for issue by the Audit Committee of the Board of Directors on August 8, 2025.

(b) Basis of measurement:

The condensed consolidated interim financial statements have been prepared on the historical cost basis except for the following material items in the statement of financial position:

•Financial assets classified as measured at fair value through profit or loss (FVTPL)

These condensed consolidated interim financial statements are presented in U.S. dollars, which is the Corporation’s functional currency.

(d) Use of estimates:

The preparation of the condensed consolidated interim financial statements in conformity with IFRS requires the Corporation’s management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

2. Basis of preparation (cont'd):

(d) Use of estimates (cont'd):

Significant areas having estimation uncertainty include revenue recognition, asset impairment (including property, plant, and equipment, intangible assets, and goodwill) and any related recoveries of previously recognized impairment, warranty provision, inventory and onerous contracts provisions, and fair value measurement (including long-term financial investments). These assumptions are unchanged in these condensed consolidated interim financial statements and are the same as those applied in the Corporation’s consolidated financial statements as at and for the year ended December 31, 2024.

(e) Future operations:

The Corporation is required to assess its ability to continue as a going concern or whether substantial doubt exists as to the Corporation’s ability to continue as a going concern into the foreseeable future. The Corporation’s ability to continue as a going concern and realize its assets and discharge its liabilities and commitments in the normal course of business is dependent upon the Corporation having adequate liquidity and achieving profitable operations that are sustainable. The Corporation's liquidity objective to remain a going concern into the foreseeable future is to maintain cash balances sufficient to fund at least six quarters of forecasted cash used by operating activities and contractual commitments.

The Corporation’s strategy to attain this liquidity objective is to continue its drive to attain profitable operations that are sustainable by executing a business plan that continues to focus on revenue growth, improving overall gross margins, maintaining discipline over operating expenses, managing working capital and capital expenditure requirements, and securing additional financing to fund its operations as needed until the Corporation does achieve profitable operations that are sustainable. Failure to implement this plan could have a material adverse effect on the Corporation’s financial condition and or results of operations.

3. Material accounting policies:

Effective January 1, 2025, the Corporation adopted a number of new standards and interpretation, but they did not have a material impact on the Corporation's condensed consolidated interim financial statements.

The accounting policies in these condensed consolidated interim financial statements are the same as those applied in the Corporation’s consolidated financial statements as at and for the year ended December 31, 2024.

4. Critical judgments in applying accounting policies and key sources of estimation uncertainty:

Critical judgments in applying accounting policies:

Critical judgments that management has made in the process of applying the Corporation’s accounting policies and that have the most significant effect on the amounts recognized in the condensed consolidated interim financial statements are limited to management’s assessment of the Corporation’s ability to continue as a going concern (note 2(e)).


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

4. Critical judgments in applying accounting policies and key sources of estimation uncertainty (cont'd):

Key sources of estimation uncertainty:

Key assumptions concerning the future and other key sources of estimation uncertainty that have significant risk of resulting in a material adjustment to the reported amount of assets, liabilities, income and expenses within the next fiscal year include the following: revenue recognition, asset impairment (including property, plant, and equipment, intangible assets, and goodwill) and any related recoveries of previously recognized impairment, warranty provision, inventory and onerous contracts provisions, fair value measurement (including long-term financial investments) and residual fair value of property, plant, and equipment. These assumptions are unchanged in these condensed consolidated interim financial statements and are the same as those applied in the Corporation’s consolidated financial statements as at and for the year ended December 31, 2024.

5. Trade and other receivables:


	June 30,		December 31,
	2025		2024
Trade accounts receivable,gross	$	18,812	$	29,475
Allowance for doubtful accounts	(2,940)		(5,292)
Trade accounts receivable, net	15,872		24,183
Other receivables	4,603		4,654
Contract assets	2,946		3,146
	$	23,421	$	31,983

Contract assets

Contract assets primarily relate to the Corporation's rights to consideration for work completed but not billed as at June 30, 2025 for engineering services and technology transfer services.


	June 30,
Contract assets	2025
January 1, 2025	$	3,146

Invoiced during the period	(200)

At June 30, 2025	$	2,946

Information about the Corporation's exposure to credit and market risks, and impairment losses for trade receivables and contract assets is included in note 25.

6. Inventories:

During the three and six months ended June 30, 2025, the write-down of inventories to net realizable value including onerous contract adjustments amounted to ($1,197,000) and ($1,531,000) (2024 – ($1,418,000) and ($3,451,000)) and the reversal of previously recorded write-downs and onerous contract adjustments amounted to $2,165,000 and $4,037,000 (2024 – $720,000 and $1,278,000), resulting in a net (charge) recovery to cost of product and service revenues of $968,000 and $2,506,000 (2024 – ($698,000) and ($2,173,000)). Write-downs and reversals are included in either cost of product and service revenues or research and product development expense, depending upon the nature of inventory.


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

7. Property, plant and equipment:


	June 30,		December 31,
	2025		2024
Property, plant and equipment owned	$	9,000	$	9,000
Right-of-use assets	19,897		21,424
	$	28,897	$	30,424

Property, plant, and equipment owned:


	June 30,		December 31,
Net carrying amounts	2025		2024
Computer equipment	545		545
Furniture and fixtures	3,300		3,300
Leasehold improvements	3,600		3,600
Production and test equipment	1,555		1,555

	$	9,000	$	9,000

During the three and six months ended June 30, 2025, the Corporation recognized impairment charges on property, plant, and equipment of $939,000 and $3,162,000 (2024 - $nil) related to a net fair value impairment allowance against consolidated capital assets.

During the six months ended June 30, 2025, the Corporation disposed of certain miscellaneous equipment in Denmark for net proceeds of $80,000, resulting in a gain on sale of assets of $73,000.

Right-of-use assets:

The Corporation leases certain assets under lease agreements, comprised primarily of leases of land and buildings, office equipment, and vehicles (note 15).


	June 30,		December 31,
Net carrying amounts	2025		2024
Property	$	19,610	$	21,179
Equipment	105		34
Vehicle	182		211
	$	19,897	$	21,424

Depreciation expense on property, plant, and equipment is allocated to operating expense or cost of goods sold depending upon the nature of the underlying assets. For the three and six months ended June 30, 2025, depreciation expense of $759,000 and $1,620,000 (2024 - $3,598,000 and $6,829,000) was recorded.

Additions to property, plant, and equipment assets for the six months ended June 30, 2025 total $4,666,000 (2024 - $9,181,000).


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

8. Intangible assets:


	June 30,		December 31,
	2025		2024
ERP management reporting software system	$	1,765	$	1,757


			Accumulated		Net carrying
Balance	Cost		amortization		amount
At January 1, 2024	$	59,582	$	58,176	$	1,406
Additions to intangible assets	1,768		—		1,768
Amortization expense	—		759		(759)
Impairment on intangible assets	—		658		(658)

Impaired asset retirement adjustment	(6,269)		(6,269)		—
At December 31, 2024	55,081		53,324		1,757
Additions to intangible assets	337		—		337
Amortization expense	—		329		(329)
At June 30, 2025	$	55,418	$	53,653	$	1,765

Additions to intangible assets for the six months ended June 30, 2025 of $337,000 (2024 - $887,000) consist primarily of costs to expand and enhance the capabilities of the ERP management reporting software system.

Amortization expense on intangible assets is allocated to research and product development expense or general and administration expense depending upon the nature of the underlying assets. For the three and six months ended June 30, 2025, amortization expense of $204,000 and $329,000 (2024 - $255,000 and $510,000) was recorded.

9. Equity-accounted investments:

For the three and six months ended June 30, 2025, the Corporation recorded $444,000 and $1,262,000 (2024 - $468,000 and $1,302,000) in equity loss of investment in joint venture and associate, comprising of equity loss in Weichai Ballard Hy-Energy Technologies Co., Ltd. ("Weichai Ballard JV").

Investment in Weichai Ballard JV


	June 30,		December 31,
Investment in Weichai Ballard JV	2025		2024
Beginning balance	$	8,238	$	13,901
Recognition (deferral) of 49% profit on inventory not yet sold to third party, net	110		(168)
Equity in loss	(1,262)		(4,941)
Cumulative translation adjustment due to foreign exchange	132		(554)
Ending balance	$	7,218	$	8,238

Weichai Ballard JV is an associate in which the Corporation has significant influence and a 49% ownership interest.


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

9. Equity-accounted investments (cont'd):

Investment in Weichai Ballard JV (cont'd)

The following tables summarize the financial information of Weichai Ballard JV as included in its own financial statements as of June 30, 2025, adjusted for foreign exchange differences, the application of the Corporation's accounting policies and the Corporation's incorporation costs.


	June 30,		December 31,
	2025		2024
Percentage ownership interest (49%)
Current assets	$	37,170	$	40,993
Non-current assets	27		50
Current liabilities	(16,813)		(18,398)

Net assets (100%)	20,384		22,645
Corporation's share of net assets (49%)	9,988		11,096
Incorporation costs	324		324
Elimination of unrealized profit on downstream sales, net of sales to third party	(3,094)		(3,182)
Carrying amount of investment in Weichai Ballard JV	$	7,218	$	8,238


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Revenue (100%)	$	531	$	306	$	1,079	$	1,311
Net loss (100%)	906		956		2,574		2,657
Corporation's share of net loss (49%)	$	444	468		$	1,262	$	1,302

10. Long-term financial investments:

In addition to the above equity-accounted investments, the Corporation has also acquired ownership interest in various other investments, which are recognized at fair value (note 25).


	December 31,		Contributions		Change in Fair		June 30,
Net carrying value	2024		(Proceeds)		Value		2025
Long-term investment - HyCap Fund	23,987		4,890		5,490		34,367
Long-term investment - Clean H2 Fund	9,043		—		2,173		11,216
Long-term investment - Forsee Power SA	2,270		—		108		2,378
Long-term investment - Templewater Fund	315		(27)		—		288
Long-term investment - Wisdom Motor	1,900		—		—		1,900
	$	37,515	$	4,863	$	7,771	$	50,149


	December 31,		Contributions		Change in Fair		June 30,
Net carrying value	2023		(Proceeds)		Value		2024
Long-term investment - HyCap Fund	12,801		1,396		5,763		19,960
Long-term investment - Clean H2 Fund	4,075		4,110		(311)		7,874
Long-term investment - Forsee Power SA	14,969		—		(9,937)		5,032
Long-term investment - Templewater Fund	—		496		—		496
Long-term investment - Wisdom Motor	4,100		—		—		4,100
Long-term investment - Quantron AG	4,400		1		(138)		4,263
	$	40,345	$	6,003	$	(4,623)	$	41,725


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

10. Long-term financial investments (cont'd):

During the three and six months ended June 30, 2025, changes in fair value and foreign exchange adjustments for long-term investments totalling $3,325,000 and $7,771,000 (2024 - $1,679,000 and ($4,623,000)) were recognized as unrealized gain (loss) in net loss and included in finance income and other (notes 20 and 25).

Investment in Forsee Power SA

In October 2021, the Corporation acquired a non-controlling 9.8% equity interest in Forsee Power SA ("Forsee Power"), a French company specializing in the design, development, manufacture, commercialization, and financing of smart battery systems for sustainable electric transport.

During the three and six months ended June 30, 2025, changes in fair value and foreign exchange adjustments totalling ($2,713,000) and $108,000 (2024 - ($4,052,000) and ($9,937,000)) were recognized as an unrealized gain (loss) in net loss and included in finance income and other (notes 20 and 25), resulting in net fair value investment in Forsee Power of $2,378,000 as of June 30, 2025 (June 30, 2024 - $5,032,000), now representing a non-controlling 7.3% equity interest.

Investment in Wisdom Group Holdings Ltd.

In June 2022, the Corporation invested $10,000,000 and acquired a non-controlling 7.2% interest in Wisdom Group Holdings Ltd. ("Wisdom Motor"), a privately held Cayman Islands holding company with operating subsidiaries whose business includes the design and manufacture of vehicles, including zero emission fuel cell electric buses, trucks, and battery-electric vehicles. Subsequently, the Corporation assigned its option held to purchase additional Series A Preferred Shares in Wisdom for consideration of $1,000,000, resulting in recovery of contributions of $1,000,000. The exercise of this option by the acquiring counterparties, diluted the Corporation's ownership interest from 7.2% to 6.7% as of June 30, 2025.

During the three and six months ended June 30, 2025, changes in fair value and foreign exchange adjustments totalling $nil and $nil (2024 - $nil and $nil) were recognized as an unrealized gain (loss) in net loss and included in finance income and other (notes 20 and 25), resulting in net fair value investment in Wisdom Motor of $1,900,000 as of June 30, 2025 (June 30, 2024 - $4,100,000).

Investment in Quantron AG

In September 2022, the Corporation invested €5,000,000 ($5,183,000) and acquired a non-controlling 1.9% equity interest in Quantron AG, a global electric vehicle integrator and an emerging specialty OEM to accelerate fuel cell truck adoption. Subsequently in April 2023, the Corporation made a committed additional contribution of €3,000,000 ($3,304,000) to exercise its option to purchase an additional 793 shares, resulting in a non-controlling ownership interest of 3.0% in Quantron AG. In May 2024, the Corporation made a nominal additional contribution of $1,000 to purchase additional shares in order to maintain its non-controlling 3.0% equity interest. During 2024, Quantron AG commenced insolvency proceedings and the Corporation's investment was fully impaired. During 2025, the insolvency proceedings completed and Quantron AG was liquidated.

During the three and six months ended June 30, 2025, changes in fair value and foreign exchange adjustments totalling $nil and $nil (2024 - ($43,000) and ($138,000)) were recognized as an unrealized loss in net loss and included in finance income and other (notes 20 and 25), resulting in net fair value investment in Quantron AG of $nil as of June 30, 2025 (June 30, 2024 - $4,263,000).


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

10. Long-term financial investments (cont'd):

Investment in Hydrogen Funds

HyCap Fund I SCSp

In August 2021, the Corporation invested in HyCap Fund I SCSp (“HyCap”), a special limited partnership registered in Luxembourg. During the three and six months ended June 30, 2025, the Corporation made additional contributions of £3,477,000 and £3,615,000 ($4,711,000 and $4,890,000) (2024 - £821,000 and £1,105,000 ($1,038,000 and $1,396,000)) for total contributions of £19,370,000 ($25,203,000).

During the three and six months ended June 30, 2025, changes in fair value and foreign exchange adjustments totalling $4,692,000 and $5,490,000 (2024 - $5,837,000 and $5,763,000) were recognized as unrealized gain in net loss and included in finance income and other (notes 20 and 25), resulting in net fair value investment in HyCap of $34,367,000 as of June 30, 2025 (June 30, 2024 - $19,960,000).

Clean H2 Infrastructure Fund

In December 2021, the Corporation invested in Clean H2 Infrastructure Fund I ("Clean H2"), a special limited partnership registered in France. During the three and six months ended June 30, 2025, the Corporation made additional contributions of $nil and $nil (2024 - €2,706,000 and €3,804,000 ($2,909,000 and $4,110,000)) for total contributions of €9,663,000 ($10,475,000).

During the three and six months ended June 30, 2025, changes in fair value and foreign exchange adjustments totalling $1,345,000 and $2,173,000 (2024 - ($63,000) and ($311,000)) were recognized as an unrealized gain (loss) in net loss and included in finance income and other (notes 20 and 25), resulting in net fair value investment in Clean H2 of $11,216,000 as of June 30, 2025 (June 30, 2024 - $7,874,000).

Templewater Fund

In February 2024, the Corporation invested in Templewater Decarbonization I, L.P ("Templewater"), a special limited partnership registered in Cayman Islands. During the year ended December 31, 2024, the Corporation made initial contributions of $527,000, on a total commitment of $1,000,000, remainder yet to be paid. During the three and six months ended June 30, 2025, the Corporation received a return of contribution of $nil and ($27,000) (2024 - contribution of $nil and $496,000) in the form of an equalization payment.

During the three and six months ended June 30, 2025, changes in fair value and foreign exchange adjustments totalling $nil and $nil (2024 - $nil and $nil) were recognized as an unrealized gain (loss) in net loss and included in finance income and other (notes 20 and 25), resulting in net fair value investment in Templewater of $288,000 as of June 30, 2025 (June 30, 2024 - $496,000).

11. Bank facilities:

The Corporation has the following bank facilities available to it.

Letter of Guarantee Facility

The Corporation has a Letter of Guarantee Facility (“LG Facility”), enabling the bank to issue letters of guarantees, standby letters of credit, performance bonds, or similar credits on the Corporation's behalf from time to time up to a maximum of $2,000,000. As at June 30, 2025, €979,000 ($1,147,000) (2024 - €979,000 ($1,048,000)) was outstanding on the LG Facility.


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

11. Bank facilities (cont'd):

Letter of Guarantee Facility (cont'd)

The LG Facility also enables the Corporation to enter into foreign exchange contracts (at face value amounts in excess of the LG Facility). As at June 30, 2025, the Corporation had outstanding foreign exchange currency contracts to purchase a total of CDN $1,000,000 (2024 – CDN $35,000,000) at an average rate of 1.36 CDN per U.S. dollar, resulting in an unrealized gain (loss) of CDN $1,000 (2024 – CDN ($201,000)) at June 30, 2025. The unrealized gain on forward foreign exchange contracts is presented in prepaid expenses and other current assets on the statement of financial position and the unrealized loss on forward foreign exchange contracts is presented in trade and other payables.

The Corporation also has a Loan Agreement enabling the bank to issue commercial credit cards, standby letters of credit, or similar credits on the Corporation's behalf from time to time up to a maximum of approximately CDN $13,000,000. As at June 30, 2025, no amounts were outstanding under the Loan Agreement.

12. Trade and other payables:


	June 30,		December 31,
	2025		2024
Trade accounts payable	$	19,214	$	12,300
Compensation payable	9,274		17,111
Other liabilities	4,238		5,579
Taxes payable	760		647
	$	33,486	$	35,637

13. Deferred revenue:

Deferred revenue (i.e. contract liabilities) represents cash received from customers in excess of revenue recognized on uncompleted contracts.


	June 30,		December 31,
Deferred revenue	2025		2024
Beginning balance	$	11,632	$	4,588
Additions to deferred revenue	8,341		17,291
Revenue recognized during the period	(4,337)		(10,247)
Ending balance	$	15,636	$	11,632


	June 30,		December 31,
	2025		2024
Current deferred revenue	$	8,578	$	6,643
Non-current deferred revenue	7,058		4,989
Ending balance	$	15,636	$	11,632


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

14. Provisions:


	June 30,		December 31,
	2025		2024
Restructuring provision	$	4,945	$	8,053
Warranty provision	13,457		12,894
Onerous contracts provision	5,828		9,460


Current	$	24,230	$	30,407

Restructuring Provision

During 2024, the Corporation accrued restructuring expenses in provisions and other current liabilities, related primarily to a global corporate restructuring initiated in September 2024 consisting of cost reduction measures including a reduction in workforce, a rationalization of product development programs, operational consolidation, and a reduction in capital expenditures. This provision is adjusted as actual costs are incurred and expended each quarter.

During 2025, the Corporation accrued additional restructuring expenses in provisions and other current liabilities, consisting primarily of initial amounts incurred related to a July 2025 corporate restructuring including costs related to the Chief Executive Officer ("CEO") transition and other initial workforce reductions and related consulting and advisory services. This provision will be adjusted as actual costs are incurred and expended each quarter.

As at June 30, 2025, restructuring costs totalling $4,945,000 (December 31, 2024 - $8,053,000) remain accrued.

Warranty Provision

The Corporation recorded warranty provisions of $1,970,000 (2024 - $2,758,000) related to new product sales offset by warranty expenditures of $2,118,000 (2024 - $2,268,000) due primarily to costs incurred to satisfy warranty obligations. The warranty provision and cost of revenues for the six months ended June 30, 2025 were adjusted downwards (upwards) by ($750,000) (2024 - $1,957,000) based upon quarterly reviews and changes in estimated costs to repair. As of June 30, 2025, total warranty provision of $13,457,000 (2024 - $13,507,000) has been accrued in provisions and other current liabilities.

Onerous Contracts Provision

Upon completion of a review of the Corporation's "open" contracts as at June 30, 2025, total onerous contract costs of $5,828,000 (December 31, 2024 - $9,460,000) have been accrued in provisions and other current liabilities.

The Corporation will continue to review open contracts on a quarterly basis to determine if any ongoing or new contracts become onerous, and if any of the underlying conditions or assumptions change which would require an adjustment to the accrued provision.

15. Lease liability:

The Corporation leases certain assets under lease agreements. The lease liability consists primarily of leases of land and buildings, office equipment and vehicles. The leases have interest rates ranging from 4.95% to 9.42% per annum and expire between July 2025 and February 2035.


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

15. Lease liability (contd):


	June 30,		December 31,
	2025		2024
Property	$	3,139	$	2,805
Equipment	29		28
Vehicle	77		66
Lease Liability, Current	$	3,245	$	2,899

Property	$	20,278	$	20,847
Equipment	77		2
Vehicle	126		146
Lease Liability, Non-Current	$	20,481	$	20,995

Lease Liability, Total	$	23,726	$	23,894

During the six months ended June 30, 2025, the Corporation made principal payments on lease liabilities totalling $1,486,000 (2024 - $1,799,000). The Corporation is committed to future minimum lease payments (comprising principal and interest) as follows:


Maturity Analysis	June 30,
	2025
Less than one year	$	5,031
Between one and five years	14,538
More than five years	12,995
Total undiscounted lease liabilities	$	32,564

Deferred gains on closing of finance lease agreements are amortized over the lease term. As at June 30, 2025, the outstanding deferred gain was $nil (December 31, 2024 – $69,000).

16. Other non-current liabilities and employee future benefits:


	June 30,		December 31,
	2025		2024
Other non-current liabilities	$	2,745	$	2,580
Employee future benefits	87		98
Other non-current liabilities and employee future benefits	$	2,832	$	2,678

Non-current liabilities: Decommissioning liabilities

A provision for decommissioning liabilities for the Corporation’s head office building is related to estimated site restoration obligations at the end of the lease term. As at June 30, 2025, total decommissioning liabilities amounted to $2,745,000 (December 31, 2024 - $2,580,000), resulting from accretion (dilution) of $165,000 (2024 - ($48,000)).


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

17. Equity:


	Three months ended June 30,				Six months ended June 30,
Share-based compensation	2025		2024		2025		2024
Option Expense	$	15	$	206	$	129	$	657
DSU Expense	91		133		179		249
RSU Expense	2,183		2,229		3,847		4,462
Total share-based compensation (per statement of loss)	$	2,289	$	2,568	$	4,155	$	5,368
Restructuring (accelerated vesting of equity)	2,500		—		2,500		—
Total share-based compensation (per statement of cash flows)	$	4,789	$	2,568	$	6,655	$	5,368
RSUs accrued but not yet granted	(42)		$	—	(82)		$	—
Total share-based compensation (per statement of equity)	$	4,747	$	2,568	$	6,573	$	5,368

(a) Share capital:

As at June 30, 2025, 299,868,076 common shares were issued and outstanding.

(b) Share options:


			Options for common shares
At December 31, 2024			3,763,020


Options cancelled			(679,160)
At June 30, 2025			3,083,860

During the three and six months ended June 30, 2025, compensation expense of $15,000 and $129,000 (2024 – $206,000 and $657,000) was recorded in net loss, based on the grant date fair value of the options recognized over the vesting period.

During the three and six months ended June 30, 2025, nil and nil (2024 – 5,028 and 154,509) options were exercised for an equal amount of common shares for proceeds of $nil and $nil (2024 – $14,000 and $308,000).

As at June 30, 2025, options to purchase 3,083,860 common shares were outstanding (June 30, 2024 - 4,133,995).


			DSUs for common shares
At December 31, 2024			989,668
DSUs granted			135,955

At June 30, 2025			1,125,623

Deferred share units (“DSUs”) are granted to the board of directors and executives. Eligible directors must elect to receive at least half of their annual retainers and executives may elect to receive all or part of their annual bonuses in DSUs. Each DSU is redeemable for one common share, net of statutory tax withholdings, after the director or executive ceases to provide services to the Corporation.


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

17. Equity (cont'd):

During the three and six months ended June 30, 2025, $91,000 and $179,000 (2024 - $133,000 and $249,000) of compensation expense was recorded in net loss relating to 57,340 and 135,955 (2024 - 59,064 and 100,839) DSUs granted during the period.

As at June 30, 2025, 1,125,623 deferred share units were outstanding (June 30, 2024 - 838,208).

(d) Restricted share units:


			RSUs for common shares
At December 31, 2024			4,592,096
RSUs granted			6,447,052

RSUs exercised			(840,905)
RSUs forfeited			(361,449)
At June 30, 2025			9,836,794

Restricted share units (“RSUs”) are granted to certain employees and executives. Eligible directors may elect to receive a portion of their annual retainer as RSUs. Each RSU is convertible into one common share, net of statutory tax withholdings. The RSUs vest after a specified number of years from date of issuance and, under certain circumstances, are contingent on achieving specified performance criteria and/or market criteria. A performance factor adjustment is made if there is an over-achievement (or under-achievement) of specified performance criteria, resulting in additional (or fewer) RSUs being converted.

During the three and six months ended June 30, 2025, compensation expense of $2,183,000 and $3,847,000 (2024 – $2,229,000 and $4,462,000) was recorded in net loss.

During the three and six months ended June 30, 2025, 64,439 and 840,905 RSUs (2024 - 212,282 and 596,421) were exercised, net of applicable taxes, which resulted in the issuance of 34,842 and 429,960 common shares (2024 - 116,716 and 318,164) resulting in an impact on equity of ($42,000) and ($530,000) (2024 - ($308,000) and ($825,000)).

As at June 30, 2025, 9,836,794 restricted share units were outstanding (June 30, 2024 - 5,616,458).

18. Disaggregation of revenue:

The Corporation's operations and main revenue streams are the same as those described in the Corporation's consolidated financial statements as at and for the year ended December 31, 2024. Revenues from the delivery of services, including technology solutions, after sales service and training, are included in each of the respective markets. The Corporation's revenue is derived from contracts with customers.


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

18. Disaggregation of revenue (cont'd):

In the following table, revenue is disaggregated by geographical market (based on location of customer), by market application, and by timing of revenue recognition.


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Geographical markets
Europe	$	10,096	$	10,175	$	19,497	$	21,140
North America	7,441		3,968		12,914		6,099
China	74		1,211		263		2,359
Rest of World	231		649		557		857
	$	17,842	$	16,003	$	33,231	$	30,455
Application
Bus	$	8,832	$	11,036	$	21,299	$	19,904
Truck	82		1,677		392		2,830
Rail	7,165		4		7,276		346
Marine	27		455		29		671
HD Mobility Subtotal	$	16,106	$	13,172	$	28,996	$	23,751
Stationary	541		1,663		1,137		5,314
Emerging Markets and Other	1,195		1,168		3,098		1,390
	$	17,842	$	16,003	$	33,231	$	30,455
Timing of revenue recognition
Products transferred at a point in time	$	15,425	$	13,428	$	28,512	$	25,291
Products and services transferred over time	2,417		2,575		4,719		5,164
	$	17,842	$	16,003	$	33,231	$	30,455

19. Other operating expense:


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Net impairment loss on trade receivables	$	491	$	21	$	490	$	1,691



Restructuring and related costs	5,851		161		6,079		191
	$	6,342	$	182	$	6,569	$	1,882

Impairment loss on trade receivables

During the three and six months ended June 30, 2025, the Corporation recorded a net impairment loss of $491,000 and $490,000 (2024 - $21,000 and $1,691,000) consisting primarily of receivables no longer deemed collectible, net of recoveries. In the event that the Corporation recovers any amounts previously recorded as impairment losses, the recovered amount will be recognized as a reversal of the impairment loss in the period of recovery.


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

19. Other operating expense (cont'd):

Restructuring and related costs

During the three and six months ended June 30, 2025, total restructuring and related charges of $5,851,000 and $6,079,000 consist primarily of initial amounts incurred related to a July 2025 corporate restructuring including costs related to the CEO transition and other initial workforce reductions and related consulting and advisory services.

During the three and six months ended June 30, 2024, total restructuring and related charges of $161,000 and $191,000 consist primarily of certain cost cutting measures and related personnel change costs.

20. Finance income (expense):


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Employee future benefit plan expense	$	(3)	$	(8)	$	(13)	$	(9)
Investment income	6,272		9,797		12,907		20,101
Mark-to-market gain (loss) on financial assets (notes 10 & 25)	3,325		1,679		7,771		(4,623)
Foreign exchange gain (loss)	1,225		(453)		1,475		(1,745)
Government recoveries	—		—		180		—
Finance income and other	$	10,819	$	11,015	$	22,320	$	13,724
Finance expense	$	(495)	$	(590)	$	(1,001)	$	(1,021)

21. Related party transactions:

Related parties include shareholders with a significant ownership interest in the Corporation, including its subsidiaries and affiliates, and the Corporation’s equity accounted investee, Weichai Ballard JV (note 9).

For the three and six months ended June 30, 2025, related party transactions and balances with the Corporation's 49% owned equity accounted investee, Weichai Ballard JV, were as follows:


	June 30,		December 31,
Balances with related party - Weichai Ballard JV	2025		2024
Trade and other receivables	$	1,807	$	3,447
Investments	7,218		8,238
Deferred revenue	1,607		1,831


	Three months ended June 30,				Six months ended June 30,
Transactions during the period with Weichai Ballard JV	2025		2024		2025		2024
Revenues	$	64	$	1,211	$	249	$	2,218
Cost of goods sold and operating expense	47		722		139		1,661


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

22. Discontinued operations:

During the year ended December 31, 2023, the Corporation completed a restructuring of operations at Ballard Motive Solutions and effectively closed the operation. As such, the historic operating results of the Ballard Motive Solutions business for 2024 have been removed from continuing operating results and are instead presented separately in the consolidated statements of loss and comprehensive loss as loss from discontinued operations. The Corporation has commenced the process to formally dissolve Ballard Motive Solutions.

Net loss from discontinued operations for the three and six months ended June 30, 2025 and 2024 were as follows:


	Three months ended June 30,				Six months ended June 30,
	2025		2024		2025		2024
Product and service revenues	$	—	$	—	$	—	$	—
Cost of product and service revenues	—		—		—		—
Gross margin	—		—		—		—

Total operating expenses	—		(1)		—		(235)
Finance income and other	—		—		—		3
Finance expense	—		—		—		5




Net loss from discontinued operations	$	—	$	(1)	$	—	$	(227)

Net cash flows from discontinued operations for the three and six months ended June 30, 2025 and 2024 were as follows:


	Six months ended June 30,
	2025		2024
Cash used in operating activities	$	—	$	(733)


Cash used in discontinued operations	$	—	$	(733)

23. Supplemental disclosure of cash flow information:


	Six months ended June 30,
Non-cash financing and investing activities:		2025		2024

Compensatory shares		$	2,010	$	2,365

24. Operating segments:

The Corporation operates in a single operating segment, Fuel Cell Products and Services, which consists of the design, development, manufacture, sale and service of PEM fuel cell products for a variety of applications, focusing on power products for bus, truck, rail, marine, stationary and emerging market (material handling, off-road and other) applications. The delivery of services, including technology solutions, after sales service and training, are included in each of the respective markets.


BALLARD POWER SYSTEMS INC. Notes to Condensed Consolidated Interim Financial Statements Three and six months ended June 30, 2025 and 2024 Unaudited (Tabular amounts expressed in thousands of U.S. dollars, except number of shares)

25. Financial Instruments:

(a) Fair value:

The Corporation’s financial instruments consist of cash and cash equivalents, short-term investments, trade and other receivables, long-term financial investments, and trade and other payables. The fair values of cash and cash equivalents, short-term investments, trade and other receivables, and trade and other payables approximate their carrying values because of the short-term nature of these instruments.

Long-term financial investments (note 10) comprise investment in hydrogen infrastructure and growth equity funds: HyCap Fund, Clean H2 Fund, investment in a decarbonization and climate technology fund: Templewater, and an investment in Forsee Power, Wisdom Motor and Quantron AG. Changes in fair value and foreign exchange adjustments are recognized as gains or losses in net loss and included in finance income and other (note 20). During the three and six months ended June 30, 2025, the Corporation recognized net mark to market and foreign exchange gains (losses) of $3,325,000 and $7,771,000 (2024 - $1,679,000 and ($4,623,000)).


	Six months ended		Year ended
Increase (decrease) in fair value due to MTM and foreign exchange	June 30, 2025		December 31, 2024
Long-term investment - HyCap Fund	$	5,490	$	5,084
Long-term investment - Clean H2 Fund	2,173		(360)
Long-term investment - Forsee Power	108		(12,699)
Long-term investment - Templewater Fund	—		(212)
Long-term investment - Wisdom Motor	—		(2,200)
Long-term investment - Quantron AG	—		(4,401)
Increase (decrease) in fair value of investments	$	7,771	$	(14,788)

(b) Credit risk:

IFRS 9 Financial Instruments requires impairment losses to be recognized based on “expected losses” that will occur in the future, incorporating forward looking information relating to defaults and applies a single ECL impairment model that applies to all financial assets within scope. ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Corporation in accordance with the contract and the cash flows that the Corporation expects to receive). Under IFRS 9, at each reporting date the Corporation is required to assess whether financial assets carried at amortized cost are credit-impaired.

As a result of this review for the three and six months ended June 30, 2025, the Corporation did not recognize any additional estimated ECL impairment losses, excluding specific impairment losses (note 19). At June 30, 2025, the total amount accrued was $500,000.