The Fuel Musk Called Stupid Seeks Another Shot at Green-Car Race
(Bloomberg) -- It’s lighter, abundant and finally ready to take on Tesla.
Hydrogen-powered vehicles are gearing up to challenge electric vehicles again in the race for mass-market clean cars. This week, a much larger group of companies signed on to a global coalition aimed at drumming up government support for the technology that Tesla Inc. Chief Executive Officer Elon Musk has derided as “mind-bogglingly stupid” for cars. The firms also pledged to find a cleaner way to produce the gas.
“Hydrogen has been talked about as the ultimate solution for zero emissions in the auto industry for decades,” Hyundai Motor Co. Vice Chairman Yang Woong-chul said on the sidelines of the Global Climate Action Summit in San Francisco. "There was reluctance because the technology of fuel-cell vehicles wasn’t mature enough, but now it is."
What the hydrogen believers need next is scale. The South Korean carmaker, the first to mass-produce fuel-cell vehicles back in 2013, is doubling down on its efforts and this year announced plans to join forces with Volkswagen AG’s Audi unit to “lead industry standards.” The concept of hydrogen cars -- that emit only water vapor -- has failed to gain popularity after declining costs of lithium-ion batteries and more charging stations made EVs more affordable.
In the past five years, Hyundai has seen the cost of fuel-cell systems halve and it expects it to decline by at least another 50 percent in the next five years, said Yang. He is also a co-chair of the Hydrogen Council, whose size has quadrupled since it was formed 18 months ago to 53 energy and auto firms.
The Council is betting 2030 will be a tipping point when millions of transport vehicles, including 1.5 million autonomous taxis and 3.6 million delivery trucks, will grow the use of fuel cells to 6.4 million. The group expects hydrogen could be used to provide up to 18 percent of the world’s energy by 2050, even outside of transportation, if the world is to meet the Paris Agreement’s goal of containing global warming to 2 degrees Celsius.
Toyota Motor Corp. unveiled the Mirai, a four-door family sedan powered by hydrogen and fuel-cell technology about four years ago. However, sales of the $59,000 car available in Japan, California and some parts of Europe, reached only a little over 5,000 as of end-2017. Hyundai has moved about 1,000 of its Tucson Fuel Cell since 2013. Honda Motor Co. hasn’t seen much success with its Clarity Fuel Cell model either since its debut in late 2016.
“With scale, the price goes down dramatically," Yang said, adding Hyundai sees opportunity for fuel cells powering long-distance trucks, refrigerated transport and autonomous vehicles.
Advocates say hydrogen has a long-term advantage over lithium-ion batteries in cars, not just because it weighs less and readily available, but it also offers longer driving ranges and shorter fill-up times, making the investment worthwhile.
Japan, Germany, Denmark, California, South Korea and Australia already have programs built to address the infrastructure needed to support hydrogen cars, and the group aims to have similar investments made around the world. California has spent roughly $100 million to build charging stations in the past several years, and the French government said in June that it would spend 100 million euros on vehicle subsidies and cleaner production of the fuel by 2023.
"We cannot be as competitive as the combustion engine today, but we have a road map that includes technologies, emissions reductions and regulations," said Benoit Potier, chairman and CEO of Air Liquide SA and a co-chair of the Hydrogen Council. "If we want to achieve the 2 degree scenario in 2050 we have to join forces to make it happen -- it’s our job to make it competitive."
Although the market share of hydrogen cars will be stuck at less than 2 percent of automobile sales through 2030, fuel-cell car sales should reach 10 percent of that market by 2035 and 26 percent by 2050, according to forecasts by the European Climate Foundation.
As part of the plan to make hydrogen more competitive the group also aims to find a cleaner way to produce it. Most of the hydrogen produced for fuel cells today uses natural gas, but it could be rapidly decarbonized through use of renewable energy, biogas and carbon capture and storage technology, Potier said.
©2018 Bloomberg L.P.