The End Run Of The Fuel Cell Race
The excitement about battery electric vehicles seems to die down amidst disappointing uptake. Range, weight and cost are in the way. At the same time, dormant interest in fuel cell vehicles is being rekindled . A month ago, we had a new look at the technology from the perspective of the Toyota/BMW linkup. Today, The Nikkei [sub] takes a broader view and says that carmakers are in the final lap of the fuel cell race. Let’s have a look at the contestants and where they stand.
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.
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