Volkswagen has been tinkering with hydrogen for longer than I can remember. Yesterday, CEO Martin Winterkorn said it was all for naught. Hydrogen fuel cells are unlikely to become a cost-effective way to power cars in the near future, Winterkorn told Automotive News at Volkswagen’s press conference in Wolfsburg. He said it’s not Volkswagen’s fault:

“I do not see the infrastructure for fuel cell vehicles, and I do not see how hydrogen can be produced on large scale at reasonable cost. I do not currently see a situation where we can offer fuel cell vehicles at a reasonable cost that consumers would also be willing to pay.”

Automotive News takes that as an indicator that VW won’t join a list of global automakers that want to roll out fuel cell vehicles in the 2015-2020 time-frame, among them Toyota allied with BMW, a Nissan-Renault-Daimler-Ford alliance, Hyundai, Honda, and more.

Instead, VW is seen to embark on a somewhat belated diesel plug-in hybrid strategy, while hybrid pioneer Toyota does not have a problem envisaging fuel cell vehicles at a reasonable cost. Two years ago already, Toyota’s chief engineer Satoshi Ogiso told TTAC that an affordable hydrogen-powered car in this decade is “his job.”

Canadian fuel cell firm Ballard Power inked a deal with Volkswagen that could be worth as much as $100-million and last up to 6 years.

According to the CBC, Ballard will provide fuel cells for VW’s HyMotion hydrogen lineup, which will consist of a demonstrator fleet for now. Long a darling of North America’s clean energy sector, Ballard’s automotive fuel cell business began to turn south over the last decade, and in 2008, Ballard sold its automotive fuel cell assets to Daimler and Ford.

Ballard remained in the fuel cell business for forklifts, buses and stationary electrical generation, though it continued to keep a foothold in the automotive fuel cell business. But a number of advances in hydrogen fuel cells, from the technology itself to the abundance of natural gas used to make hydrogen to innovative fueling projects that use sewage, have spurred renewed interest in hydrogen as an automotive fuel.

Consumers lose interest. Even reporters do.!

A few days ago, we wrote that “EVs run out of juice.” When we did that, we referred to collapsing sales in January only.  Now Reuters says: “Are electric cars running out of juice again?” Reuters means it in a bigger way. Like forever.

In a long article, written by  its best brains, Reuters writes  that electric cars are “still is not ready for prime time – and may never be. In the meantime, the attention of automotive executives in Asia, Europe and North America is beginning to swing toward an unusual but promising new alternate power source: hydrogen.”

Both lovers and haters of electric cars should read the article, written by Reuters’ best automotive reporters around the world, Norihiko Shirouzu, Yoko Kubota, Paul Lienert, Deepa Seetharaman, Bernie Woodall, and their Pulitzer-Prize winning boss Paul Ingrassia.

Executive summary:

• Consumers continue to show little interest in electric vehicles.
• EVs continue to be plagued by many of the problems that eventually scuttled electrics in the 1910s and more recently in the 1990s.
• Problems include high cost, short driving range and lack of charging stations.
• The  Obama administration backed away from its aggressive goal to put 1 million electric cars on U.S. roads by 2015.
• Nissan’s Carlos Ghosn  is backing away from EVs and shifts  toward more mainstream gasoline-electric hybrids.
• Tightening of global fuel-efficiency standards from 2020 on is forcing automakers to assess their options.
• Large OEM back hydrogen.

“The current capabilities of electric vehicles do not meet society’s needs, whether it may be the distance the cars can run, or the costs, or how it takes a long time to charge.”

Long-term TTAC readers will find many of these assessments in past TTAC articles.

There are people, and some of them comment on TTAC, who are convinced that a hydrogen-powered car is an insanity that will never work, but other people who work at the world’s largest carmakers beg to differ. Today, Ford, Daimler, and the Renault-Nissan Alliance signed a tripartite pact for the joint development of a fuel cell system that promises to be implemented faster, and at lower cost, both to automakers and customers.

The plan is to leverage the considerable economies of scale of the three signatories into “the world’s first affordable, mass-market FCEVs as early as 2017,” as a joint communique says.

All three have significant experience in FCEVs. Their FCEVs have logged more than 10 million km in test drives around the world. There is one problem that faces all presumptive makers of FCEVs: How to make them affordable. If they are affordable, they will hopefully be bought. If there are FCEVs on the road, hydrogen fuel stations will hopefully follow.

This ramp-up is too steep for a single automaker, even the biggest one in the world. After Toyota and BMW, Ford, Daimler, and the Renault-Nissan Alliance formed an even bigger pact. The three companies will invest equally into the project, and amount was not disclosed.

Discounting doubts of TTAC commenters, Thomas Weber, a member of Daimler’s management board, said: “We are convinced that fuel cell vehicles will play a central role for zero-emission mobility in the future.”

Expect more alliances (who’s left, Volkswagen and GM?) and an industry-wide push for FCEVs in the 2015-2020 timeframe.

Pretty much most of the world’s large automakers plan a commercial launch of fuel cell vehicles in 2015, Hyundai even earlier. One of the hot spots could be Scandinavia. At the end of a month-long hydrogen-powered tour through Europe, Toyota, Nissan, Honda and Hyundai signed an agreement to jointly promote fuel cell vehicles in Norway, Sweden, Iceland and Denmark.

The Memorandum of Understanding (MoU) provides mostly for moral and promotional support and is hoped to be “a catalyst to begin a dialogue between public and private stakeholders in Norway, Sweden, Iceland and Denmark on securing relevant financing and support mechanisms for accelerating market introduction of FCEVs.” What is interesting is that the three Japanese majors are doing something together, and that they are bringing the Korean juggernaut Hyundai on board.

Japanese makers have big hopes for fuel cell technology. Mitsuhiro Ueno, head of Honda R&D Europe called the fuel cell vehicle “the ultimate green mobility.” FCVs don’t have the drawbacks of pure EVs, namely limited range and long charge time. What is holding them back are price and infrastructure.

Starting in Hamburg, Germany, on September 13, seven Fuel Cell Electric Vehicles (FCEVs) will travel through Hannover, Bolzano, Paris, Cardiff, Bristol, Swindon, London and Copenhagen, and points between. The party is BYOH, bring your own hydrogen: Mobile refueling stations will be set up by H2 Logic Denmark in stopover cities.

Says The Nikkei [sub]:

“While many car companies are already in a fierce battle for a slice of the market for environmentally friendly vehicles such as hybrids and electric cars, they are also in the final stages of developing fuel-cell cars, which are widely expected to be the ultimate eco-cars because they emit no greenhouse gases such as carbon dioxide, or other pollutants.

Leading the charge in fuel-cell development are Toyota Motor Corp. , Honda Motor Co., General Motors Co. of the U.S. and Germany’s Daimler AG. The stakes are high, given the vast sums already spent.”

Roland Berger Strategy Consultants told the Tokyo wire that “the four automakers have already spent a combined 100 billion yen on the technology.” That would be a little over a billion $, and I believe that number is low.

Fuel cell research had been conducted since the last millennium. The 2008 financial crisis slowed it down. Carmakers had to cut R&D even on regular cars. Recently, development revved up again.

Prototypes and test vehicles have been driving around for years without exploding. 2015 is the date several carmakers name for the first commercial launch of fuel cell vehicles. Satoshi Ogiso, Toyota’s man in charge of new technology, thinks that the only challenge is affordability.  During an interview with TTAC last year, he likened the challenge to what had faced him during the launch of the first hybrids in 1995.

Just like hybrid powertrains in the 90s, current fuel cell powertrains are big, bulky, heavy and expensive. Ogiso and his colleagues at other carmakers are working on the problem.

The solution to many ills in the auto industry is scale: Make and sell enough cars with the new technology, and you can spread the price of development over many units. Also, with mass production, the price of components can come down drastically.

Even the largest automakers don’t want to wait until they achieved the necessary scale effects themselves. They forge alliances with other automakers.

• Toyota, usually a company that does it alone and in-house, famously entered an alliance with BMW.
• Nissan and Renault agreed with Daimler to expand the scope of their cooperation to fuel-cell cars.
• Honda appears to be partner-less.
• GM negotiated a fuel cell partnership with BMW. The Bavarians broke off the discussion and are winding down a new energy alliance with GM partner PSA after hooking up with Toyota.

Says The Nikkei:

“One GM executive who has worked on the automaker’s fuel-cell effort for a long time lamented being handed another setback by Toyota.”

Observers familiar with the matter expect more tie-ups. The Roland Berger consultancy predicts that Toyota will enlarge its circle of fuel cell partners.

It will be a few years until fuel cell cars can compete in the marketplace. In the meantime, there is a fierce and sometimes uncivil competition for government grants.

When the U.S. government did bet heavily on EVs in 2009 and decided to shift funding away from fuel cell vehicle research, Secretary of Energy Steven Chu said that fuel cell vehicles “will not be practical over the next 10 to 20 years.” In the meantime, he had a change of heart.

“The development of America’s tremendous shale gas resources is also helping to reduce the costs of producing hydrogen and operating hydrogen fuel cells,” Bill Gibbons, a spokesman for the department, told the New York Times in May.

If an investment into fuel cell vehicles would be successful at last, past investments into EVs would not go to waste. A fuel cell is just another battery. Except that it can be charged in minutes than hours, and except that it lasts 400 miles instead of 100.

Toyota is far ahead with the technology. The company had Fuel Cell Hybrid Vehicles (FCHV) on the roads for ten years. In 2009, it “launched” its FCHV-adv, basically a Highlander with the hybrid synergy drive from the Toyota Prius connected to a 90kW fuel cell stack. A few months ago, editor-at-large Ed Niedermeyer and I had it on a short test ride through the scenic warehouse landscape of Torrance, CA. Except for an eerily quiet drive, the ride was uneventful.

On a full tank of – this time real – gas, we could have taken it all the way to San Francisco and beyond – no range anxiety here. Fuel cell vehicles have all the advantages of a battery-operated vehicle, i.e. no emissions (the fuel stack produces water), and nearly none of its drawbacks.

If you want to drive tailpipe emission free, your choices are battery, or fuel cell. A fuel cell is basically a battery. Fuel cells and batteries use a chemical reaction to make electricity. When the chemicals in a battery are depleted, you must recharge or throw away the battery. The chemicals of a fuel cell are hydrogen and oxygen. You provide the hydrogen. The fuel cell stack uses free-of-charge oxygen from the air and produces electricity plus H2O – water. Proponents of the technology say that well-to-wheel, fuel cells involve much lower emissions than batteries. Refilling the hydrogen tank should not take longer than filling up with unleaded. Next stop after 400+ miles.

The only way to extend the range of a BEV (if you don’t want to add an ICE) is by adding more batteries. This quickly becomes an exercise in futility. Each added battery cell means more weight, heavier brakes, a larger traction motor, a stronger body to carry the mass, and in turn even more batteries. And most of all, it becomes insanely expensive.

Not so with fuel cells. Fuel cells can make electricity at weights that are between eight to 14 times less than current batteries. Extending the range of a fuel cell vehicle has negligible impact on its weight.

Like electricity, hydrogen is not a way to make energy, it is a way to transport energy. Hydrogen can be made in the same number of ways as electricity.

And why aren’t we all driving around in fuel cell vehicles by now? There were a number of technical challenges, but as Toyota Chief Engineer Satoshi Ogiso had told us last year, the challenges have all been mastered. The only real problem Ogiso is facing with hydrogen fuel cell vehicles is money:

“For us, the only remaining real issue that stands in the way of fuel cell electric vehicles is mass production cost.”

Current fuel cell technology is big, bulky, heavy and expensive. With enough scale, package size and price can come down considerably. Toyota plans to launch a commercial FCV in 2015. It still will be expensive, the Nikkei figures 5 million yen, or $62,000. By 2020, Ogiso plans to have an affordable FCV.

Luxury vehicles are much better for early-tech alternative propulsion, because the cars are big enough to hide the heft and expensive enough to mask the price. With their alliance, Toyota and BMW plan to “take the lead in commercializing fuel cell cars,” as The Nikkei [sub] writes. Says The Nikkei:

“Other automakers are forging ties over green technologies. Daimler AG is rushing to develop a fuel cell car with capital partner Nissan Motor Co. Meanwhile, Honda Motor Co. and Hyundai Motor Co. are developing fuel cell cars on their own. General Motors Co. has been considering a fuel cell tie-up with BMW, but it may have to change course now that the German firm has opted to partner with Toyota.”

Regulators are hoping to offer additional incentives and credits to spur sales of the vehicles. Hydrogen re-fueling infrastructure will also be supported, though details of how this would be approached were scant. The new rules would also favor vehicles such as the Chevrolet Volt, as CARB feels that it is closer to an electric vehicle than a conventional plug-in hybrid. The Volt has been dubbed a ”transitional zero-emission vehicle”.

Organizations such as the California New Car Dealers Association say that demand for these types of vehicles has been overestimated, but CARB chair Mary Nichols told a conference call that car manufacturers were in favor of the new rulings. “Probably the most heartening aspect of this whole rulemaking was the level of cooperation that we received from the industry. Overall, the degree of support for the package was just extraordinary.”

The  car industry has high hopes for the young. Automakers have invested and are investing billions into hybrid and electric vehicle, so far with lackluster success. In the U.S., the take rate of hybrid cars is actually coming down from a 2.78 percent peaklet in 2009. The 0.14 percent market share of EVs is too small to move the plotter’s needle. To recoup the investment, new tech vehicles have to be sold in more meaningful numbers. It is the generation Y that is supposed to set the needle in motion. A study of Deloitte Touche Tohmatsu promises that Generation Y will make a humongous difference.

Generation Y could be the “generation that leads us away from traditional gasoline-powered vehicles,” Craig Giffi, who is in charge of  Deloitte’s  annual survey of Gen Y auto consumers, told the L.A. Times. The paper summarizes:

“According to the Deloitte survey, 59% of Gen Y respondents said they preferred an “electrified vehicle” over any other type of car or truck. They generally defined “electrified” as a hybrid gasoline-electric vehicle. Just 2% said they wanted a pure battery electric vehicle, which reflects the very small number of such cars that people are purchasing.  Just 37% of the respondents preferred vehicles with the traditional gasoline-only powertrain.”

Giffi loves the Y generation, so much that he recklessly collides with TTAC’s jargon vigilantes: The enthusiasm for hybrid vehicles turns Gen Y consumers in the U.S. into “game changers,” Giffi said.  And he continued:

“At nearly 80 million strong, they are one of the biggest automobile buying market segments and the largest consumer segment since the baby boomers.“

Sure, once they have a job and make money.

Let’s hope Generation Y sticks more to its principles than previous generations. I have seen study after study where customers announced their environmentally responsible intentions, only to reneg on their promise once they were in the showroom.

At the Tokyo Motor Show, the announcement that Toyota and BMW are in cahoots over batteries, diesel engines and possibly more was the talk of the show. Back in Bavaria, BMW displays a promiscuous bent. BMW will cooperate with GM, yes GM, on fuel cells. This at least if the German magazine Wirtschaftswoche is correctly informed.

Sources told Wirtschaftswoche that a cooperation between BMW and GM is as good as done. A MOU will be signed with great fanfare at the Detroit motor show in January, says the magazine.

BMW has no comment, but confirms that there are negotiations with GM. BMW is not known for its fuel cell prowess. According to the information of Wirtschaftswoche, highly profitable BMW will share the cost of fuel cell development with GM, and will be supplied with hydrogen-powered fuel cells by GM.

The on-again, off-again hydrogen fuel cell is definitely on again.  In our interview a month ago, Toyota’s chief for new technologies, Satoshi Ogiso, confirmed that the technology is ready for prime time, the only remaining problem is cost. Toyota will launch a mass produced fuel cell car in 2015. Ogiso promised it will be affordable by 2020. GM is looking back at a long history of fuel cell development and will also sell a hydrogen-powered car by 2015. So will Hyundai. Nissan (cooperating with hydrogen-pioneer Daimler)  likewise signaled that it will not place a single bet on EVs, and that fuel cell cars are in the cards.  BMW once had planned to launch an ICE that runs on hydrogen (see above), but that idea, well, bombed.

Think hybrid and electric cars are expensive? Wait until automakers start selling hydrogen fuel cell cars. Toyota tells Automotive News [sub] that it’s targeting global sales of a “few thousand” fuel cell vehicles by 2015. But because the technology will be rolled out due to emissions standards rather than widespread market demand, expect the price for the hydrogen Toyotas to be breathtakingly high. Says Toyota Europe’s Vice President for Product Planning & Marketing Alain Uyttenhoven

We could expect a fuel cell vehicle to retail at about 100,000 euros in Europe.

Phew! All of a sudden those EVs aren’t looking so overpriced, are they? Which might be why Uyttenhoven adds

We see pure battery-powered vehicles to be just a solution for small trips in the city, while a plug-in gasoline-electric hybrid is the best solution both for weekday urban commuting and weekend trips. Our research shows that more than 80 percent of urban daily trips are less than the 20km.

In an extended interview with Fareed Zakaria this weekend, GM CEO Dan Akerson repudiated a lot of GM’s previous optimism about hydrogen fuel cell cars, saying

We’re looking at hydrogen fuel cells, which have no carbon emissions, zero. They’re very expensive now, but we’ve, just in the last two years, reduced the price of that technology by $100,000. The car is still too expensive and probably won’t be practical until the 2020-plus period, I don’t know. And then there’s the issue of infrastructure

The DetN points out that GM had previously said that it would have anywhere from 1,000 to “hundreds of thousands” of fuel cell cars on the road by 2010, and most recently said (in 2009) that the technology would be “commercialized” by 2015 and “cost-competitive” by 2020. So, if hydrogen is moving to the back burner, what’s moving up? Akerson revealed that

soon we’ll be introducing “bi-fuel” engines which can burn both compressed natural gas and liquid gasoline.

We’ve seen GM take early steps towards bringing a natural gas-powered car to the road, but this is the first sign from a top executive that a dual-fuel car is a certainty in GM’s near future. By talking down hugely expensive hydrogen cars and talking up cheap natural gas powerplants, Akerson sends a strong message that GM’s green car efforts are moving in a more pragmatic direction. Hit the jump for part two of the interview, in which Akerson talks gas tax and green cars.

With Opel planning to pull itself into the black within the year, the brand’s thoughts are turning from survival to “luxuries” like a flagship model planned for around 20k units starting in the 2016-2017 timeframe. Codenamed “TOL” for “Top Of Line,” the sedan will be designed to highlight one of GM’s many alt-drivetrain technologies, but according to Automotive News [sub], nobody yet seems sure which. Opel labor rep and recent champion of the brand’s forthcoming products Klaus Franz explains:

Already with the our Ampera electric vehicle, we have shown what we are able to do and enjoy an advantage of two to three years compared to the competition

But with the TOL is planned for 2016, Opel may have to dig deep to jump out ahead of the market, which is why a fuel cell-powered electric drivetrain is being considered (also, after decades of FCV research, GM has to build a production model someday). And if the eventual product has a truly ahead-of-its-time drivetrain, and looks as good as last year’s Flextreme Concept (above), this flagship could be an exclamation point on Opel’s turnaround. Unfortunately, neither of these things are a given…

Let’s start with the looks: according to AN [sub]:

In May, Opel CEO Karl-Friedrich Stracke said the company was mulling a new flagship model that would improve the brand’s image. He told a Germany’s Welt am Sonntag newspaper that the car would be a crossover between SUV and station wagon, with an attractive design, high functionality and premium features.

Which means the flagship could come out looking like the 2007 Flextreme concept instead of the low, sleek, coupe-ish looks of the 2010 Flextreme.  Don’t the Opel boys remember what happened to Renault when it tried to build flagships in the shape of vans and station wagons? The Avantime and Vel Satis were wild and funky looking cars, but even the French understand that the luxury market is wildly conservative.

And speaking of wildly conservative, Franz’s comment that the TOL’s drivetrain would be “years” ahead of the competition should probably be taken with a grain of salt, especially in light of another comment he made:

The workers representatives will support this project to the fullest. A flagship like this can only be built on the Epsilon 2 architecture with long wheelbase. We will do everything to build this car at our headquarters in Ruesselsheim, rather than Mexico or elsewhere

An alt-drivetrain “flagship” based on a stretched version of the Epsilon II platform? Where have I heard of that before? Oh right, Cadillac’s XTS “phantom flagship,” a stretched Epsi-II sedan with a plug-in hybrid V6 drivetrain (at least eventually). But the XTS is going to market next year as a 2013 model… and if the Opel were just a re-skin of the Cadillac, there would be no reason to wait until 2016. Not only would an XTS derivative not be “years ahead of the competition” if it launched in 2016, it would be three years behind Cadillac, which (like Chevy) GM is pushing in Europe.

So, will the TOL end up an XTS rebadge or will the three extra years go into developing a legitimately unique drivetrain, possibly a fuel-cell job? It’s too early to tell yet, but one thing is certain: either way, Opel’s stretched Epsilon-II “flagship” won’t come to the US as a Buick for fear of cannibalizing the XTS. Which will just go to show that the XTS should have been born a Buick in the first place.

The ominous Hydrogen Year 2015 is popping up again.  Last year, Byung Ki Ahn, general manager of Hyundai-Kia’s Fuel Cell Group said: “There are already agreements between car makers such as ourselves and legislators in Europe, North America and Japan to build up to the mass production of fuel cell cars by 2015.” Going  through the many files produced in Brussels, you find that in Europe “car manufacturers are getting ready for the commercial production of hydrogen vehicles by 2015.”

Now Daimler will begin series production of hydrogen fuel cell cars in 2014. This is what Daimler CEO Dieter Zetsche told Das Autohaus. Together with Linde, a manufacturer of industry gases, Daimler wants to build a small network of hydrogen fuel stations. By 2014, the n umber of hydrogen stations in Germany will rise to 50. Germany alone would need around 1,000 hydrogen stations for a nationwide supply.  And then, motorists will complain that they won’t find any in Italy if they decide to drive to Italy.

A bevy of industry figures and politicos congregated yesterday in Torrance, CA, to celebrate the grand opening of a new gas station. But it wasn’t just any new gas station …

As a collaborative effort between Toyota, Air Products, Shell, South Coast Air Quality Management District (SCAQMD) and the Department of Energy (DOE), the first hydrogen fueling station in the U.S. that is fed directly from an active industrial hydrogen pipeline was opened.

Don’t drive down yet to fill up your hydrogen car (which you are unlikely to have): The station will provide hydrogen for Toyota fuel cell hybrid demonstration program vehicles as well as other manufacturers’ fuel cell vehicle fleets in the Los Angeles area.

The word “hydrogen” triggers associations of “bomb” in some people. Toyota puts that to rest by placing the hydrogen gas station right next to their U.S. HQ in Torrance. Toyota leases the land “for a nominal fee” to Shell, which owns and operates the station. The gas is supplied by Air Products via a pipeline from its plants in Wilmington and Carson, CA. There is some tax payer’s money involved: “SCAQMD and DOE provided project funding assistance,” says Toyota’s press release.

At the inauguration of the gas station, Chris Hostetter, group vice president of product and strategic planning at Toyota U.S. said: “Toyota plans to bring a fuel cell vehicle to market in 2015, or sooner, and we will not be alone in the marketplace.” Let’s see …

Last year, we had picked up signs of a revival  of  the hydrogen fuel cell technology. There was a lot of renewed excitement in the industry about the technology, especially on the Asian and European side of the globe. Everybody seemed to be gearing up to make 2015 the year of hydrogen. Daimler sent a fleet of hydrogen-powered cars around the world.

They are still at it. Forgotten by the fickle media, the hydrogen-powered Benzes are making their long way back from China to Europe, live-blogged by an intrepid reporter of Auto, Motor und Sport who just posted issue #52. Judging from the comments, only a few bother to read.

A few months ago, the hydrogen euphoria seemed to suddenly run out of fuel – around the world. Even the Obama administration cut $70 million from hydrogen funding. That’s not what killed the mood, carmakers in Europe, Korea or Japan never harbored great hopes to get a lot out of U.S. coffers. From repeated talks with insiders at major automakers, I am given the impression that there is not big breakthrough with the hurdles that stand in the way of wholesale hydrogenification of the universe. As there are the problems of polar bear-friendly hydrogen production, efficient distribution and escape-proof storage, only to name a few.

A spokesman of a usually straightforward German automaker said: “If we have a breakthrough in any of these areas, we’ll call you.”  I’m not sitting by the phone.

At the same time, as hydrogen-disillusion sank in (for the umpteenth time), interest in EVs started to rise, even at the formerly most electricity-insulated companies.

The EPA’s National Clean Diesel Campaign and the Department of Energy’s Hydrogen Energy Program have both been defunded in President Obama’s proposed 2012 budget, as the White House focuses on the much-debated goal of putting one million electric cars on the road by 2015. Bloomberg reports The NCDC budget was cut from $80m in 2010 to zero, even though Obama only just reauthorized $100m per year of grants through the program ten days ago. According to Senator Tom Carper, one of the  sponsors of that re-authorization, the program

leverages federal dollars so efficiently that for every $1 invested, we get over $13 in health and economic benefits in return

Oh well. Meanwhile, fans of the oil-burners imported by the German brands can relax: the NCDC focused on improving diesel emissions from freight, ports and fleets rather than subsidizing Euro-phile sports sedans. Besides, diesel isn’t the only loser in the rush to push plug-in cars to market: hydrogen is also losing out.

The Office of Energy Efficiency and Renewable Energy’s hydrogen technology program is another loser in the proposed budget, losing some $70m in funding according to DOE’s budget briefing. It’s not clear yet what portions of that program will be affected, but it represents a huge shift away from the Bush-era proposal for over a billion dollars in hydrogen fuel cell research.

Needless to say, the pro-clean diesel and pro-hydrogen lobbies are livid over these cuts. The hydrogen crowd took the big-picture approach, arguing

Even the President acknowledged the need for a portfolio approach in his State of the Union address. Just as American leadership in microprocessor technology led to the greatest economic expansion in the U.S. since post-World War II, fuel cells and hydrogen technologies have the transformative power to drive similar economic growth in the Energy Age.

We look to Congress for leadership to ensure the position of fuel cells and hydrogen in America’s clean energy future

The diesel dudes, meanwhile, take a more common-sense approach, arguing

It’s great to invest in something that’s a moon shot, 15 or 20 years from now, but what are you going to do until then? Modest sums to help modernize and upgrade some of these older engines would be dollars well spent.

But the forces of diesel and hydrogen face an uphill battle, as the Obama budget does include $588m in EV funding, the main feature of which would make $7,500 plug-in car consumer tax credits available as a discount at the point of purchase. This proposal will be hugely popular with GM, Nissan and other firms that are ahead of the game on the plug-in front, and could well squelch any opposition from within the auto industry. But this is also merely the first step in the budget process… twists and turns could well lie ahead.

So, what really happened when two of the three hydrogen fuel-cell cars on Mercedes’s F-Cell World Tour ran out of fuel on an early leg? Previously we’d only heard the German perspective on events (not to mention Daimler’s non-telling of the story in the video above), but now TTAC Alum Jonny Lieberman has posted his extended take on the trip over at Motor Trend. Yes, you’ll have to give MT ten page-clicks to read the whole thing, but Lieberman goes into far more detail than any account of the mini PR fiasco yet published. Do give it a look.

Hydrogen Fuel Cell vehicles (FCVs) are enjoying something of a comeback lately, as everyone from Hyundai and Honda to GM and Daimler are talking about forthcoming production versions of test-fleet FCVs. And with EVs poised to both dominate the short-term green-car game and inevitably disappoint consumers, it’s no surprise that the perennial “fuel of the future” is enjoying a fresh look from automakers. But if high cost and range anxiety are the flies in the EV ointment, the FCV-boosters are finding their hydrogen cars tend to suffer from the same problems. Daimler says

By 2015, we think a fuel cell car will not cost more than a four-cylinder diesel hybrid that meets the Euro 6 emissions standard.

but that by no means guarantees its Mercedes FCV will be truly “affordable” by any reasonable standard, as diesel-electrics are considered one of the most expensive applications of internal combustion power. And then there’s the whole range issue. Yes, FCVs refuel faster than EVs, but even the most ambitious of Hydrogen-boosters, Daimler, are only pushing vehicles with a 250-mile range. Which is why we puzzled a bit over The Globe And Mail‘s assesment that

Three Mercedes-Benz B-Class F-CELL models will make [a 125-day] global trek, which will seek to highlight the real-world benefits of fuel cells versus EVs – mainly their much further range

Flipping over to AutoMotorundSport, we find that the irony which completely escaped the G&M is threatening to overwhelm Daimler’s entire demonstration. And, as is only natural when things like this occur, there’s a bizarre TTAC connection…

So, I’m reading the AMundS write-up on the leg of the F-Cell world tour from Stuttgart to Reims, France, and both German writers start stuck in the F-Cell’s none-to-commodious back seat. Up front, two Americans seem to be trying to set a new speed record, as “Michael” of “Auto Blog” (presumabely Michael Harley of Autoblog) “stared, transfixed, at the speedo and passed the record numbers to his navigator, Jonny.” This “Jonny,” as it turns out, is none other than TTAC Alum and “Auto Trend” scribe Jonny Lieberman, who (literally) had a front-seat ticket for Daimler’s fuel-cell fiasco.

Apparently, even after reaching the F-Cell’s electronically-limited 178 KPH VMax, “The man from ‘Auto Blog’” did not want to give up “a single meter of “Unlimited German Autobahn” (NB: capitalization is a sign of German humor). According to the backseat Germans, the ride flew by thanks to both the velocity and the “extensive ravings” about previous trips to Germany with wives and Porsches.

The pace was only interrupted when a cell phone rang, and “Mission Control” asked the four journos to report when they’d consumed a quarter and half of their hydrogen tank. “Houston, we have a problem,” came the reply from inside the F-Cell, “our tank is already half-empty.”  The journalists are told not to exceed 100 KPH for the rest of the trip, and (counter-inuitively) “Michael” moved over to let least-likely hypermiler in recent memory, Mr Jonny Lieberman, behind the wheel.

The narrative continues:

The crossing of the Rhine has echoes of Apollo 13. “I have turned off all systems” says Mike… The pace now rests at 80 KPH. It doesn’t help. With almost 200 grams of hydrogen after 227 kilometers, the engine is turned off. “How much is that converted?” asks Mike. “Less than a Quarter-Pounder” reckons Jonny.

Inevitable reference here. Professional restraint here.

American stereotype-mongery aside, the real lesson here is that the first two F-Cell vehicles on the world tour didn’t even make it to the first refueling station, a temporary operation that was set up by the several internal-combustion-powered trucks that follow the world tour. Instead, both had to ride in the back of ICE-powered trucks to get to the fueling station, which itself was set up by trucks. Needless to say, part of Daimler’s goal with the Tour is to highlight the need for hydrogen refueling stations… but with enough infrastructure investment, EVs could do everything the F-Cell can. Absent a convincing advantage in range, the head-start in electrical infrastructure (as well as other efficiency considerations) seems to make EVs more practical as a wide-scale zero-emissions solution than FCVs… and the F-Cell World Tour doesn’t seem likely to change that perception. Especially if they keep letting lead-footed American writers do the driving.

Surf over to AMundS for more photos and German-language coverage of the F-Cell world tour

More little steps on the hydrogen fuel cell front, part of the walk-up to the big 2015 launch: Hyundai signed a memorandum of understanding with Norway, Sweden, Denmark and Iceland to supply hydrogen fuel cell electric vehicles to public organizations in a pilot program, The Nikkei [sub] reports.

Hyundai will supply the cars gratis. “The initial agreement will help Hyundai Motor Group to take the lead in the hydrogen fuel cell car market in Europe,” says a slightly optimistic statement. Be it as it may, there is definitely something afoot with Hydrogen in Europe, Korea and Japan.

Yesterday, I changed my base of operations to Tokyo for a month to escape the Chinese New Year festivities (i.e. one month of WW III worthy fireworks, combined with closed shops and restaurants.) If I would have stuck it out a few days longer, I could have enjoyed a ride in a fuel cell vehicle.

Starting on January 29, Toyota Motor will provide “TOYOTA FCHV-adv” (as in “fuel cell hybrid vehicle-advanced”) vehicles to a new car service from Tokyo’s Narita Airport. Toyota is acting upon a request from the Research Association of Hydrogen Supply/Utilization Technology (HySUT), a participant in the Hydrogen Highway Project run by Japan’s Ministry of Economy, Trade and Industry (METI).

Toyota has already provided a hydrogen-powered bus for use on a commercial route between central Tokyo and Tokyo’s Haneda Airport. The idea is to gather data for the big hydrogen roll-out in 2015.

Detailed data of the still experimental FCHV-adv can be found in the Toyota press release. The car uses the same core hybrid synergy drive as the Toyota Prius, except that the power is delivered by a hydrogen-fed fuel cell. What is most impressive: Despite the definite SUV-like characteristics of the vehicle (the FCHV-adv is based on a Toyota Highlander), there will be not even the slightest pang of range anxiety in this car. With a full high-pressure tank of hydrogen, it can go for 830km (515 miles) before it needs a fill-up.

No, there is no on-board toilet.

EVs are the darling of the media. In Europe, the Leaf is the COTY. In the U.S. and Canada, the range extended Volt is the COTY. Then why are most big European manufacturers (except Renault) and most Japanese manufacturers (except Nissan) dragging their heels when it comes to wholesale electrification of their fleets? Maybe because they are working on wholesale adoption of hydrogen. As previously reported, there are agreements between automakers and governments in Europe, North America, Korea and Japan to prepare for the mass introduction of fuel cell cars by 2015. Japan is ahead of the game.

Thirteen Japanese companies (no bad omen in Asia, nine would be bad, four would be really bad) got together to move ahead with hydrogen: Toyota, ,Nissan, Honda on the manufacturer side teamed up with supplier-side companies JX Nippon Oil & Energy, Idemitsu Kosan, Iwatani, Osaka Gas, Cosmo Oil, Saibu Gas, Showa Shell, Taiyo Nippon Sanso, Tokyo Gas, and Toho Gas. Note the presence of gas and gasoline companies. Note the presence of Nissan.

Today, these 13 companies jointly announced:

1. As development of fuel-cell systems progresses, Japanese automakers are continuing to drastically reduce the cost of manufacturing such systems and are aiming to launch FCVs in the Japanese market—mainly in the country’s four major metropolitan areas—in 2015. The automobile industry hopes to popularize the use of FCVs after their initial introduction as a way of tackling energy and environmental issues.
2. Hydrogen fuel suppliers are aiming to construct approximately 100 hydrogen fueling stations by 2015, based on the number of FCVs expected to initially enter the market, to ensure a smooth launch and to create initial market.
3. With an aim to significantly reduce the amount of CO2 emitted by the transportation sector, automakers and hydrogen fuel suppliers will work together to expand the introduction of FCVs and develop the hydrogen supply network throughout Japan. The two groups are looking to the government to join them in forming various strategies to support their joint efforts and to gain greater consumer acceptance.

Nevertheless, most automakers think that research and investment in this category is important, almost 90 percent are planning to invest in hybrid systems, battery electric power or hydrogen fuel-cell technologies over the next five years.

These are, in a nutshell, the sobering results of the KPMG 2011 Global Automotive Executive Survey, which asked over 200 global automakers, suppliers and dealers where they think their business will be going over the coming five to 10 years.

Here are the main insights:

• Fuel-efficiency remains the biggest consideration when purchasing a car.
• The growth (but not the volume) will be in hybrid and electric vehicles over the next five years.
• A two-tier global market evolves: Mature countries struggle to cope with changing mobility behavior. Up-and-coming regions push to deliver a variety of cars to populations eager for greater mobility.
• Population growth and urbanization is driving a significant change across the entire automotive landscape.
• While the world waits for affordable electric vehicles, ‘mobility service solutions’ (short-term rental of a car, or various modes of transport) are what some respondents believe may be game-changing. Only nine percent of respondents believe that mobility solutions will represent a significant part of their strategy. However, some automakers like Daimler, Peugeot, BMW and others are already investing in this area. Says KPMG: “Those who own the mobility grid could well be the same as those who own the market.”
• Development of alternative fuels and powertrain technologies is risky and costly. 68 percent of major players are opting to enter into strategic alliances or joint ventures with suppliers rather than seek capital and go it alone.
• Overcapacity continues to be a chief concern in both mature and emerging markets. Almost two-thirds of respondents believe the US is the most overbuilt, with Japan and Germany following. China and India are expected to reach overcapacity within five years.

Two hundred automotive executives participated in the survey. Over half were business unit heads or higher.

We are picking up more and more signs of an impending revival  of  assumed dead fuel cell technology.

Here is another one:  The Nikkei [sub] says that the Japanese government is supporting an initiative to draw a hydrogen from a surprising source: Oil refining. And they need to be ready by 2015.

One of the many uses of hydrogen is in oil refining. In this case, to remove sulfur from oil. The hydrogen used in this process doesn’t have to be high quality, 90 percent pure suffices.

Fuel cells expect 99.9 percent pure hydrogen. The sponsored project aims to produce high purity hydrogen, based on the “industrial” hydrogen technology, “with an eye toward creating a new source of income,” as The Nikkei says.

The Japanese government will bear half the cots of a cheap project. It is estimated to cost 500 million yen ($ 6.15 million) over a three-year period.  It wants to be ready in time before 2015. Why 2015?

Japan’s Ministry of Economy, Trade and Industry expects a “wide adoption of fuel cell vehicles by fiscal 2015” and “seeks to secure a steady supply of high-purity hydrogen.” Again: Why 2015?

It just so happens that Toyota is dead set on selling its first mass produced fuel cell car by 2015. In Korea, Byung Ki Ahn, general manager of Hyundai-Kia’s Fuel Cell Group, said recently: “There are already agreements between car makers such as ourselves and legislators in Europe, North America and Japan to build up to the mass production of fuel cell cars by 2015.” Indeed, if you go through the many files produced in Brussels, you find that also in Europe “car manufacturers are getting ready for the commercial production of hydrogen vehicles by 2015.” In those many files was the EU master plan, as shown above.

What is this, a hydrogen conspiracy?

Major players in the industry think that EVs are a stopgap measure at best. Volkswagen declared that nobody wants EVs, except governments. In Japan, Toyota and Honda are talking louder and louder about hydrogen. There must be something better than plugins: A revolutionary technology that powers the car from a renewable energy source in an environmentally responsible fashion.

BMW just found what the world needs.

BMW’s CEO Norbert Reithofer said today that automakers, especially German automakers, need to look beyond electricity as the only renewable energy source. He thinks it’s foolish to focus on a single technology, reports Associated Press via Canada’s CTV.

Ok, ok, what is it? You’ve heard it here first:

Reithofer said Germany’s leading automakers “have to come up with something new.”

No kidding, really? You bet. Reithofer predicted that future cars will be based on “a new concept, new construction.”

It’s that simple. German ingenuity at its best.