For reasons that mostly defy logic, the otherwise shrewd car company, Toyota, is placing a large bet on hydrogen fuel cell cars, starting with the Mirai. At the same time, it has backed away from its partnership with Tesla to build an all-electric vehicle.
Toyota is going to lose this bet. There is little reason to believe hydrogen fuel-cell vehicles (FCVs) will ever beat electric vehicles in the car market. There is even less reason to believe they will ever be a cost-effective carbon-reducing strategy (as EVs already are close to being) as I discussed in Part 1, Part 2, and Part 3.
To be clear, this isn’t FCVs versus Tesla. This is FCVs versus every other car, including electric vehicles (EVs). The series has the “Tesla Trumps Toyota” headline since it was inspired by an article titled “Toyota Bets Against Tesla With New Hydrogen Car,” which also discussed their broken partnership.
I believe we now know enough about EVs, the global car market, the world’s growing response to the threat of unrestricted carbon pollution, and the steady advances being made in battery technology to know with confidence that EVs will be a major player in the global car market in the coming years. That is true even if Tesla doesn’t succeed. And it has been clear for a decade, at least, that if electric cars can succeed in the marketplace that leaves very little room for hydrogen cars, as the links above make clear.
As an aside, FCV advocates have often responded by saying, well, EVs may be better for cars, but FCVs are better for bigger vehicles like minivans, SUVs and light trucks. That is essentially the point both Honda and Toyota made in their response to several serious questions about hydrogen cars posed last fall by “Green Car Reports.” The point is entirely moot until FCVs actually solve all seven problems they face, some of which get bigger for bigger vehicles. It also bears noting that Toyota’s first FCV is a sedan!
In any case, after looking into hydrogen cars for the umpteenth time in my career, I seriously doubt they hold any prospect for either marketplace success — or contributing to the climate solution — for decades (if ever). They simply have too many barriers to success as a mass-market alternative fuel vehicle car. Indeed, they have every barrier there is!
I was first briefed on advances in transportation fuel cells within days of my arrival at the Department of Energy in mid-1993. One of DOE’s national labs, Los Alamos, had recently figured out how to reduce the amount of platinum in the best fuel cells for vehicles, proton exchange membrane (PEM) fuel cells (as had researchers elsewhere). This did not make them affordable in cars — we are still a long way from that — but a time when they might be had become imaginable. I (and others at DOE) quickly began pushing for increases in the budget for both hydrogen research and fuel cell research. Then, in the mid-1990s, when I helped oversee the hydrogen and fuel cell and alternative vehicle programs at DOE’s Office of Energy Efficiency and Renewable Energy, I worked to keep the budgets up even as the Gingrich Congress tried to slash all of DOE’s clean tech funding.
With that funding — and partnerships with the big U.S. automakers — advances were made, slowly. But the FCV research did not pan out as expected — some key technologies proved impractical and others remained stubbornly expensive.
Even so, in 2003 President George W. Bush announced in the State of the Union that he was calling on the nation’s scientists and engineers to work on FCVs “so that the first car driven by a child born today could be powered by hydrogen and pollution free.” That set off another massive increase of spending by the federal government and investments by private companies in hydrogen and fuel cells.
I began researching what was to be a hydrogen primer. But as I read the literature, talked to the experts in and out of government, and did my own analysis, my views on both the green-ness of hydrogen cars and their practicality changed. It became increasingly clear that hydrogen cars were a very difficult proposition. My 2004 book, “The Hype About Hydrogen: Fact and Fiction in the Race to Save the Climate” came out in 2004, just as the National Academy of Sciences came out with a study that was also sobering (as did the American Physical Society).
My conclusion in 2004 was that “hydrogen vehicles are unlikely to achieve even a 5% market penetration by 2030.” And that in turn meant hydrogen fuel cell cars were not going to be a major contributor to addressing climate change for a very long time.
What has changed since then? Less than Toyota and other FCV advocates would have you believe. A 2013 study by independent research and advisory firm Lux Research concluded even more pessimistically that despite billions in research and development spent in the past decade, “The dream of a hydrogen economy envisioned for decades by politicians, economists, and environmentalists is no nearer, with hydrogen fuel cells turning a modest $3 billion market of about 5.9 GW in 2030.” The lead author explains, “High capital costs and the low costs of incumbents provide a nearly insurmountable barrier to adoption, except in niche applications.”
To understand why this is true, you need to understand why, until very recently, alternative fuel vehicles (AFVs) of all kinds haven’t had much success. A significant literature emerged to explain that lack of success by AFVs — as I discussed in my book and a 2005 journal article, “The car and fuel of the future”
There have historically been seven major (interrelated) barriers to AFV success in the U.S. market:
1. High first cost for vehicle: Can the AFV be built at an affordable price for consumers? Can that affordable AFV be built profitably?
2. On-board fuel storage issues (i.e. limited range): Can enough alternative fuel be stored onboard to give the car the kind of range consumers expect — without compromising passenger or cargo space? Can the AFV be refueled fast enough to satisfy consumer expectations?
3. Safety and liability concerns: Is the alternative fuel safe, something typical users can easily handle with special training?
4. High fueling cost (compared to gasoline): Is the alternative fuel’s cost (per mile) similar to (or cheaper than) gasoline? If not, how much more expensive is it to use?
5. Limited fuel stations (the chicken and egg problem): On the one hand, who will build and buy the AFVs in large quantity if a broad fueling infrastructure is not in place to service them? On the other, who will build that fueling infrastructure — taking the risk of a massive stranded investment — before a large quantity of AFVs are built and bought, that is, before these particular AFVs have been proven to be winners in the marketplace?
6. Improvements in the competition: If the AFV still needs years of improvement to be a viable car, are the competitors — including fuel-efficient gasoline cars — likely to improve as much or more during this time? In short, is it likely competitors will still be superior vehicles in 2020 or 2030?
7. Problems delivering cost-effective emissions reductions: Is the low-emission or emission-free version of the alternative fuel affordable? Are fueling stations for that version of the fuel affordable and practical?
Every AFV introduced in the past three decades has suffered from at least three of those problems. Besides the tough competition (like the Prius), EVs have suffered most from #1 (high first cost) and #2 (limited range and slow speed of recharging). But major progress is being made in both areas.
FCVs suffer from all of them — and still do! It is very safe to say that FCVs are the most difficult and expensive kind of alternative fuel vehicle imaginable. While R&D into FCVs remains worthwhile, massive investment for near-term deployment makes no sense until multiple R&D breakthroughs have occurred. They are literally the last alternative fuel vehicle you would make such investments in — and only after all the others failed.
As an aside, if you think FCVs have solved #2, the onboard storage issue, they have not — even though this is considered their big advantage over electric vehicles. In fact, they are probably a breakthrough away from doing so, as Ford Motor Company has acknowledged. Infrastructure (#5) remains the most intractable barrier for FCVs. It is far less of a problem for EVs (as I noted here).
For governments and climate hawks, problem #7 may be the most important. As of today, it remains entirely possible that hydrogen fuel cell cars will never solve the problem of delivering cost-effective emissions reductions in the transportation sector — a problem EVs do not have. I discussed that in Part 1 and Part 2.
But the United States, Japan, and other countries — and many automakers — continue to misallocate funds toward near-term deployment of deeply flawed hydrogen fuel cell vehicles. Because of that, and because after 25 years of dawdling on climate action we lack the time to keep making such multi-billion dollar mistakes, I will discuss the 7 barriers FCVs still face today in more detail in subsequent posts. I will also discuss how EVs have been tearing down the few remaining barriers to their marketplace success.
NOTE: Nothing I write here should be taken as a recommendation for or against investing in Tesla (or Toyota or any company, for that matter).