Sunday, March 8, 2015

Coming Soon to an Auto Mall Near You!

Over the years we’ve discussed a number of the emerging technologies that promise to one day produce cars that don’t require gasoline or other fossil fuels in order to run – including some which are already in use, like the biofuel diesel projects and the Tesla Motors all-electric vehicles. There’s one I keep bringing up which has, so far, failed to produce any street-legal production cars, despite its popularity in science fiction and the fact that the actual technology has been around since the 1960s: the fuel-cell power plant. This is the same device that was used to generate electricity onboard the Apollo missions; a relatively simple device that uses compressed hydrogen and a catalytic reaction to generate power, leaving water as the only by-product. They also have the advantage of not needing large batteries filled with lead and other heavy metals like the electric cars, or using food crops to make fuel, like the E85 projects…

From a technical standpoint, the big problems with fuel cell vehicles have always been the weight and bulk of the units, the difficulty in storing and dispensing pure hydrogen safely, and the cost of making the cells in the first place. From a business standpoint, the much larger issue has always been that no company with the resources to mass-produce such a vehicle has ever been interested in making one, which means there has also never been a financial incentive for anyone to produce service stations capable of refueling one. Tesla Motors has experienced some of the same issues with its electric cars; while they are still developing a network of charging stations, unless there are enough customers to keep such stations in business, no one is going to operate one. So far, there are only a handful of stations that can provide hydrogen for fuel-cell vehicles, all of them in California – but that could be about to change…

A story last week in the Washington Post describes a new offering from Toyota called the Mirai, which is being described as the first production car to use a fuel-cell power plant. This may be a bit of an exaggeration, in that the Mirai is only going to be produced in limited numbers (700 this year and 2,000 next year), but the same Post story mentions that Hyundai has already started producing a fuel-cell version of the Tucson-class SUV, and Honda’s first fuel-cell type will be available next year. If these vehicles perform as well in a business sense as they perform in the physical sense it seems likely that we will gradually see production increase, as it did in the case of the Prius-class hybrid and as it is starting to with the Tesla electric products. And there is reason to believe that these vehicles will take off and sell, given their advantages over all previous technologies…

Some of the advantages are practical, of course. A fuel-cell type like the Mirai will have significantly greater range than the Tesla electric cars, and will require three minutes to recharge, rather than the 30 to 60 needed by an electric vehicle. Toyota is also pricing them at about 70% of what the primary Tesla car is selling for. But the big difference should come in terms of industrial base and infrastructure. I will yield to no one in my respect for Elon Musk and the folks at Tesla Motors, but for all of their technical and financial brilliance, they do not begin to have the industrial resources of Toyota, let alone the Honda and Hyundai corporations, and who’s even mentioned access to capital or distribution channels yet? Toyota has the ability to build up the number of fuel-cell vehicles gradually over time, exporting them to more and more states as the fueling stations to support them come on line. If two or three major competitors are also dumping hydrogen-powered vehicles into the US market, it will very rapidly become economically viable to support and fuel these cars, and the whole cycle will begin to pick up speed…

There are still problems to work out, of course. It remains to be seen if the oil companies will pick up on the opportunity to sell hydrogen through their existing infrastructure (at the moment, most of the hydrogen is being delivered in various hydrocarbon storage media, and could be distributed through slightly-modified gas stations), or how long it will take to educate the public about the potential of hydrogen-powered vehicles. But if production volume starts to rise, and the price continues to drop, fuel cell vehicles might take off in exactly the same way gasoline-powered cars did a century earlier, and for almost exactly the same reasons…


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