The emergence of hybrid electric vehicles as an accepted “bridging technology” between present-day internal combustion engines and fuel cell vehicles of the future is reportedly causing fuel cell developer Ballard Power Systems and its key automotive partners to redefine their alliance.

Ballard president and chief executive Dennis Campbell told Dow Jones Newswires that his company and automotive partners Ford and DaimlerChrysler are discussing a range of possible actions. These reportedly include reviewing the partners’ “roles and responsibilities,” finalising the development plan of the next generation light duty fuel cell programme, and changes that Ballard says would give it more “financial and operational flexibility.”

In the last 12 to 18 months, the emergence of hybrid electric vehicles “has really changed the game,” Campbell reportedly said.

A year or two ago, hybrids were viewed as a technological curiosity, he told Dow Jones. “But it’s now become apparent that the automakers are probably going to have to play in that space. They’re going to have to offer up competitive hybrid vehicles.”

Campbell told the news agency that the “architecture” required for hybrids is essentially identical to that of fuel-cell vehicles and the alliance partners want to combine efforts so they’re not designing and developing separate engine architectures, while the automakers want to be more involved in integration.

“The OEMs view it as very important that they link up the systems integration and the vehicle integration, and do it together,” Campbell reportedly said.

According to Dow Jones, Ballard said it’s also developing a more flexible approach with key customers and non-alliance prospects that might include the sale of fuel cell components or the licensing of technology.

“Our alliance partners are supportive of this more-open approach,” Campbell reportedly said, adding that it should accelerate the acceptance of fuel cells.

Dow Jones said that Ballard projects that total revenues will decline in 2004, due to lower engineering services revenue, and cash consumption from operations is expected to be higher.

For the first time in years, Ballard isn’t providing specific guidance on expected revenues or cash burn for the coming year. “This is a very dynamic and evolving industry and we don’t want to put unnecessary constraints on ourselves,” chief financial officer David Smith told the news agency.

Given the unpredictability of developing markets, the company is taking an approach that gives it “more elbow room” to adopt to changing market conditions, Smith reportedly added. “Whether or not product revenues are up or down is not what’s going to drive value of this business…what we think is important to the market is the type of goals that we outline,” such as demonstrating technology leadership or achieving on-road experience with fuel-cell vehicles.

Dow Jones noted that Ballard lost $US38.8 million or 33 cents a share in the fourth quarter on revenues of $29.2 million, compared with a loss of $35.5 million or 34 cents in the same 2002 period.

For the full year, it lost $125.1 million or $1.07 a share on revenues of $ 119.6 million, down from a 2002 loss of $148.4 million or $1.41 a share on revenues of $90.9 million, Dow Jones added.