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Japanese Automakers: It’s Time to Let Hydrogen Cars Go

SNA (San Diego) — Despite the continued efforts of Japanese automakers, the notion that hydrogen cars are the vehicle of the future is a pipe dream.

On May 25, 2005, then-US President George W. Bush stopped at a Shell Oil gas station to inspect the first-ever retail hydrogen filling station in Washington DC. There he spoke of the exciting future of hydrogen vehicles. America, he said, was “too dependent on foreign sources of energy today, and one way to diversify away from hydrocarbons is to use hydrogen, the byproduct of which will be water and not exhausts which pollute the air.” However, more than a decade and billions of dollars later, that optimism has not resulted in a hydrogen vehicle revolution. While American companies such as General Motors first pioneered the Fuel Cell Vehicle (FCV) technology with concept cars such as the 1966 Electrovan, it was Japanese automakers that ultimately took this technology and attempted to commercialize it.

On paper, fuel cells are the ideal technology for future vehicles. FCVs are clean—using only the hydrogen fuel and oxygen in the air to move electrons, producing water as a byproduct. Energy efficiency is at around 50% percent, better than conventional Internal Combustion Engine (ICE) vehicles, which hovers at around 40%. Refueling time is quick, comparable to traditional gas pumps. This results in a vehicle that seems both environmentally sound and consumer friendly. Unfortunately, this is where the argument for FCVs falls apart.

While many focus on the vehicle, others have started to question the economic and environmental viability of its fuel. 95% of hydrogen is produced from a process called steam methane reforming, with the rest from electrolysis. Steam methane reforming uses Liquid Natural Gas (LNG), exposing the methane to steam until it separates into carbon dioxide and hydrogen. The carbon dioxide byproduct and the emissions from producing the heat needed for the steam adds up. As a result, the emissions of FCVs are roughly the same as ICE cars.

Electrolysis is comparatively more benign, using electricity to separate the hydrogen and oxygen in water. However, the latter process is also much more expensive at more than four times the cost. These challenges, coupled with the environmental cost of transporting the fuel and installing new fueling stations, make the fuel little better than burning gasoline, doing nothing for energy independence.

In comparison, Battery Electric Vehicles (BEVs) powered by lithium ion batteries offer a much better prospect. Because of their high energy efficiency (more than 90%), they are much more environmentally friendly even when using electricity from grids that are highly dependent on fossil fuels. Adding to this, dirty power generators are becoming less common as solar prices drop rapidly. According to the International Renewable Energy Agency, photovoltaic module prices have dropped more than 70% since 2010. Solar energy is already cheaper than coal-generated electricity in many regions in the world and is projected to be “consistently cheaper” by 2020. The most significant emissions by a BEV in its lifetime is the creation of the lithium ion batteries, which adds anywhere from 15% to 70% more emissions to the manufacturing process. That amount quickly becomes insignificant however, when the cars hit the road.

From the consumer’s standpoint, significant advantages of FCVs over BEVs were the range, cost, and refueling times. The Toyota Mirai (selling for US$57,500) has a range of 500 kilometers and much faster refueling. A similarly ranged BEV costed close to US$100,000 (Tesla Model S) until a couple years ago. However, the introduction of the long range Tesla Model 3 last year cut the price to US$49,000. Lower tier BEVs can also be found, such as the Nissan Leaf (US$29,990) and the Volkswagen e-Golf (US$30,495) with a more limited range. As more car manufacturers introduces BEVs and improve their battery technology, prices can only be expected to fall. Additionally, the faster refuel times that are often touted as a major selling point for FCVs have also became less attractive, since the vast majority of customers charge BEVs overnight at home. BEV chargers have also seen more investment, with hundreds of thousands of charging points compared to just a handful of hydrogen charging locations clustered in California.

With cost challenges and inferior practicality, the future of FCVs is not bright. Even as most car manufacturers see the potential market and large-scale manufacturing feasibility of BEVs, Japanese manufacturers (namely Toyota and Honda) are funneling cash into FCV projects with little hope of seeing a return on that investment.

With major markets such as China and India announcing electrification mandates and more BEV incentives introduced around the world, most major manufacturers will be releasing expansive BEV lineups as soon as 2019. Even as Toyota belatedly announces BEVs due in 2020 late last year, it was apparent that upper management seems to be reluctant to abandon their FCV technology, promising continued funding into the doomed project. Indeed, Japan is the clear leader in fuel cell technology, but perhaps only because they are the only player left in this increasingly empty arena.

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