(Bloomberg) -- After losing money for 20 years, Johnson Matthey Plc’s fuel-cell components are making money on the back of China’s policies boosting the stuttering hydrogen-powered auto industry.
A new order from China for membranes -- -- the key fuel-cell component for the flow of fuel and oxygen across catalysts -- is spurring investments in the U.K. and China of the British chemicals maker, Chief Executive Officer Robert MacLeod said in an interview. So far, the long-standing technology is playing an increasingly distant second fiddle to vehicles powered by lithium-ion batteries.
“It’s moving forward much quicker than we had anticipated,” MacLeod said. “It’s always been tantalizingly close when this market will develop. It’s paying its way now after 20 years of not paying its way.”
China, the world’s biggest car market, is putting its manufacturing and policy might behind hydrogen fuel cells, just as it has with battery-electric vehicles. The government wants one million fuel-cell vehicles, with a focus on trucks and buses, on the roads in a decade and is seeding that plan with hundreds of millions of yuan to spur research and development, and to subsidize purchases.
| What’s the difference between fuel-cell vehicles and electric cars? |
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| In typical EVs, lithium-ion batteries store electrical energy produced away from the car and use that to power the vehicle. Hydrogen fuel cells use a chemical reaction to produce energy, converting hydrogen stored in the vehicle into electricity, while emitting only water vapor. Hydrogen’s superior energy-to-weight ratio over a lithium-ion battery lends itself to longer trips. |
The 201-year-old company is investing 20 million-pounds ($25 million) in the expansion, amid a costly bet on battery materials. Johnson Matthey is spending 500 million pounds on building up a facility making lithium nickel oxide cathode, the key component in a battery.
“We’ve had this exuberance before -- it’s always been tantalizingly close as to when this market will take off,” MacLeod said. “It does feel like you’re at the point where it could be exciting.”
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