Right after personal jetpacks, we were promised hydrogen fuel cell vehicles. The future has been slow to meet either promise, but it appears that may soon change regarding the latter.
At least three of the major automobile manufacturers – Toyota, Honda and Hyundai – have or soon will be selling hydrogen fuel vehicles commercially. Toyota is leading the pack with the Mirai, with the 2017 model selling for $57,500. Honda has countered with the Clarity Fuel Cell, the first of three in a line of alternative fuel vehicles that will include electric and plug-in hybrid models. Right now, Honda is offering only a lease option, about $20 cheaper than Toyota ($369 vs $349) but with more due up front when you sign that 36-month lease. Meanwhile, Hyundai knows how much Americans like their super-sized vehicles, so it’s mass-producing the Tucson Fuel Cell, the first-ever SUV hydrogen fuel cell vehicle, something we noted with some interest a couple of years ago.
The future has arrived, right? Strap on your jetpack, fuel up the Mirai and let’s fly. A most definitive “maybe.”
A new type of electric vehicle
You may recall from high school science class (when you weren’t skipping to smoke cigarettes before gym class) that fuel cells (at least the ones we’re talking about here) is a type of technology that uses compressed hydrogen and air to produce clean electricity. The most common type of fuel cell for vehicle applications is the polymer electrolyte membrane fuel cell. You can look at the graph below for an illustration of the technology or geek out further over the details from the Department of Energy.
Hydrogen fuel cell vehicles use a completely different propulsion system than conventional automobiles, making them to two to three times more efficient. And, unlike conventional vehicles, they produce no harmful exhaust emissions – only water and a little heat. They basically fall into the category of electric vehicles, except they swap out a hood full of heavy batteries for a fuel cell stack that combines hydrogen gas with oxygen to generate electricity for the motor.
Smooth driving ahead?
First, let’s take a look at the positives. In this case, we’ll start with one of those optimistic market reports. One from Information Trends caught the attention of news sites like ComputerWorld and others. The report, “Global Market for Hydrogen Fuel Cell Vehicles,” claims that by the year 2032, more than five million hydrogen fuel cell vehicles will be sold, with projected revenues of more than $250 billion. Sales would generate cumulative revenues upwards of $1.2 trillion for the auto industry in the next 15 years, it said.
Hydrogen fuel cell vehicles do hold an edge over other electric vehicles in terms of the time it takes to fuel. Drivers can pull up to a hydrogen fuel cell station and top up the tanks like any other vehicle in about five minutes. In contrast, even the most efficient all-electric vehicles require nearly an hour to charge fully. Hydrogen fuel cell vehicles also hold a slight advantage in range. The Toyota Mirai gets about 316 miles on a tank while the Honda Clarity reputedly does even better, with a range of 366 miles. However, Tesla Motors continues to push the boundaries with its electric vehicles. The Model S P100D with “Ludicrous” mode can drive 315 miles on one charge.
Information Trends says that by 2020 there will be sufficient hydrogen fueling infrastructure in place in several regions of the world, including California, to give “an initial boost to the market for hydrogen fuel cell vehicles.” This sounds a bit optimistic to us, but there is some evidence to support such prognostications. Toyota opened up licensing of more than 5,000 hydrogen fuel cell vehicle patents through 2020. Apparently, as some experts have speculated, this is one way to encourage growth of the needed infrastructure. A spokesperson told ComputerWorld that Japan would have a network of hydrogen filling stations by 2020, in time for the Olympic games. Denmark is reportedly ahead of the curve in terms of hydrogen fuel cell infrastructure, and Germany and the U.K. are moving forward as well.
Some bumps in the road
However, as you know, we haven’t exactly been bullish on the fuel cell market to date. And we’re not finding a lot of reasons to change our attitude when it comes to hydrogen fuel cell vehicles.
We’re partly taking our cue from Tesla Motors CEO and astronaut wannabe Elon Musk, who once called hydrogen fuel cell vehicles “bull***t during a talk in Munich, saying that “hydrogen is suitable for rockets but not for cars.” Of course, Musk has his own reasons for being biased. But there are other red flags.
Hydrogen fuel cell vehicles might burn clean but current technologies to produce hydrogen can be pretty dirty. Today, 95 percent of the hydrogen produced in the United States is made by a process known as natural gas reforming in large central plants, which comes from the fossil fuel industry, according to the Department of Energy. A much cleaner, but much more cost-prohibitive process, involves water electrolysis technology. Electrolysis uses a chemical reaction using electricity to remove hydrogen molecules from oxygen in water. No one expects fossil fuel production of hydrogen to go away any time soon.
Infrastructure for hydrogen fuel cell vehicles is clearly another roadblock. Building a network of fueling stations across a country like the United States would be the equivalent of constructing the transcontinental railroad. Economically daunting, to say the least.
Public still not charged over electric vehicles
There is a much bigger issue to consider outside of just the challenges with hydrogen fuel cell vehicles. Electric vehicles themselves aren’t exactly driving off the showroom floors in large numbers, so an investment in an even riskier and pricier technology doesn’t seem warranted at this time.
In an interview with Bloomberg News, Ford Motor Co. CEO Mark Fields said that in 2008 there were 12 electric vehicles offered on the U.S. market, representing 2.3 percent of the industry. In 2016, there are 55 models, representing just 2.8 percent of the industry. Not encouraging. Forbes also recently reported on bearish comments by automobile executives concerning electric vehicles. Toshiyuki Mizushima, president of Toyota’s new Power Train Company, said that “safety concerns, long charging time, short range and high price will limit the market for battery electric cars for a while.”
Keep on truckin’
At least one startup is betting big that hydrogen fuel cell technology is the road to the future and not a dead-end street, Wired reported this month. The Nikola Motor Company just unveiled the Nikola One, an 18-wheeler with a fully electric drivetrain powered by high-density lithium batteries. The energy will be supplied a hydrogen fuel cell, giving the Nikola One a range of 800 to 1,200 miles while delivering more than 1,000 horsepower and 2,000 ft. lbs. of torque – nearly double that of any semi-truck on the road, according to the company.
And what do we know about the company, other than it has stolen a page (and name) from the playbook of Tesla and Musk? It was founded by Trevor Milton, former CEO of dHybrid Systems, a natural gas storage technology company that was acquired in October 2014 by steel company Worthington Industries. Nikola already completed a seed round for an undisclosed amount of money, according to its own press release, and is working on funding a $300 million Series A round to be completed this month. Before the big unveiling on Dec. 1, Nikola announced earlier this summer that it had already raised $2.3 billion in reservations in the first month of its leasing program, totaling more than 7,000 truck reservations with deposits. Leases reportedly run between $5,000 and $7,000 a month.
Nikola has plans for the Nikola One to hit the road by 2020, Wired reported. Truckers will be able to fill up with all the hydrogen they need – free! – for the first seven years or million miles at refueling stations that Nikola plans to build across the nation.
We wonder if that comes with a free cup of coffee.
If you pay more than $4.95 a trade, you're paying too much. Ally Invest is one of the lowest-fee brokers around so you spend less money on transaction fees and more on stocks. With more than 30 trades a quarter it drops even lower to $3.95 a trade. Open an account and begin trading today.