Audi, Hyundai to Join Forces to Push Fuel-Cell Technology

(Bloomberg) -- Tesla Inc.’s CEO Elon Musk has called it “mind-bogglingly stupid” and carmakers have gravitated away from it in recent years. Yet fuel-cell technology -- the science behind hydrogen cars that emit only water vapor -- is getting fresh impetus.

Hyundai Motor Co. and Volkswagen AG’s Audi unit plan to team up on vehicle development and share patent licenses to “lead industry standards” on fuel cells, Hyundai said in a statement Wednesday. The multi-year agreement covers joint work on a broad range of components.

The technology has fallen behind electric cars powered by lithium-ion batteries as costs have dropped and more charging stations come online. Advocates say fuel-cell cars have longer driving ranges and shorter fill-up times that make them worth the investment.

The partnership between one of the world’s biggest automakers and Audi, the third-biggest luxury carmaker, will help boost interest among policy makers, Hyundai’s head of fuel cell research Kim Sae-hoon said in an interview. This will help drive investment in infrastructure and broaden appeal.

Limited Run

Audi, which has led fuel-cell development within Volkswagen, said in March it planned to unveil a model by 2020, albeit for a limited production run. Pairing up with Hyundai, among the first automakers to mass-produce fuel-cell powered vehicles with models including the ix35 compact crossover, forges an alliance at a time carmakers are under pressure to keep record investment in new technologies under control. Audi is investing 40 billion euros ($46 billion) in electric and self-driving cars by 2025.

“The fuel cell is the most systematic form of electric driving and thus a potent asset in our technology portfolio,” Peter Mertens, an Audi board of management member, said in a statement. Rivals to the Hyundai and Audi push include Toyota Motor Corp. and Honda Motor Co. Ltd.

Support from policy-makers is vital because fuel-cell cars won’t hit the mainstream without investment in hydrogen filling stations. California has spent roughly $100 million to build the stations in the past several years, and the French government said this month it would spend 100 million euros on vehicle subsidies and cleaner production of the fuel by 2023.

To contact the reporters on this story: Kaye Wiggins in London at kwiggins4@bloomberg.net;Sohee Kim in Seoul at skim847@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Elisabeth Behrmann, Tara Patel

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