How to make fuels cells in cars happen

Summary of notes taken during strategy workshops in the automotive business

Travelling with an electric car propelled by hydrogen is one the ways the politicians propose sustainable mobility. Shortly after the first electric car from Tesla entered the market the first FCEVs were sold, too – the Toyota Mirai, followed by the Honda Clarity. All these cars were built in semi-automated factories with much manufacturing and therefore they were expensive. But the market loved them, particularly by the Californians striving for sustainability. When the Prius Hybrid entered the market the famous ones in California instead of showing off with their luxury vehicles, they liked to be seen inside the Prius since it was perceived very sustainable at the time

Systems change for energy

The Prius’ advantage is the ICE-like fueling. No need to adapt the behavior since nothing besides consumption changes for the users. Which, besides the comfort of the pure electric rides over short distances, is part of its success. In contrast, the other propulsion systems, like the first electric car with and without fuel cell, have a tougher fight to get the required energy on board – but they are much more environmentally friendly compared to ICEs and hybrids. BEVs easily can be charged at home for instance at night and if the car is not in use. However, back in 2013 charging the car on a long-distance trip using some kind of quick chargers did not exist. And owners not living in a house and without charging option aside could not buy such a car. FCEVs got an easier start with a number fueling stations being available from the start at least in the two regions – some areas at the East Coast of Japan and California in the LA and SF areas.

It was obvious both types of cars needed a network of station to obtain the required energy. These networks have to be established on the whole continent the cars are sold.

Energy for driving

In contrast to Tesla – which has established its own charging network with the beginning of the sale of their cars – the hydrogen fueling network wasn’t established by the FCEV manufacturers. Today, the global and dedicated Tesla Supercharger network is one of the brands huge benefits and USP. Several energy providers and enterprises have erected their own fast charging networks, too. However, there exists no hydrogen fueling network on any continent. Today, there are many more hydrogen fueling stations in Japan and California but besides these regions it is close to impossible to fueling-up a FCEV. Meanwhile, there are some fueling station in Germany and the Netherlands as well as some in neighboring countries. This patchwork is a huge hurdle for the worldwide use of FCEVs since neither Toyota nor Honda or Hyundai wants to build a hydrogen fueling station network. All other manufacturers with some ambitions in the area of hydrogen for cars (and trucks) like Audi, BMW, and Mercedes as well do not understand it as their job to erect a hydrogen fueling stations network.

They all trust and count on their traditionally good relationships with oil companies and fueling stations owners. This becomes quite a challenge since the introduction of a new technology and a new energy carrier first generates huge losses – and who shall swallow these? All involved are public limited companies, thus ROI is an important indicator for the fate of the CEO and the management. Massive and risky investments into innovative projects aside of the core business were and cannot be expected – neither by the management of the car companies nor by the oil companies and fueling stations companies. And the boards of directors equally are reluctant. While Tesla finances their Superchargers via a fee on the sales price of the cars and with the help of investors such or similar financing concepts are missing with the manufacturers of FCEVs.

Meanwhile, the original idea using hydrogen from fossil sources no longer works out due to the massive environmental impacts within the processes: FCEVs certainly have no local emissions but by looking at the total environmental impacts caused by the production of hydrogen the owners of Euro 5 Diesel cars ask themselves where the benefits of hydrogen can be found compared to their own vehicles. Many but not every hydrogen fueling station gets hydrogen produced using renewable energies. But due to the low overall efficiency and losses in production, distribution, and use, lots of energy is needed. This is vastly inefficient and the high energy costs makes such cars expensive to own and run. There are, however, new ways to produce hydrogen from fossil sources being much less harmful to the environment. Again, the overall ecological valuation and particularly the threats caused by using methane (28 times more harmful to the climate compared to CO2) and the spill of it leaves open questions.

Scaling effects make business interesting

The cooperating partners in the fossil industries and the fueling station companies are reluctant – this as well since one hydrogen fueling station with one pump costs around 1.5 million Euros (approx. 1.8 million USD). The same amount is good for several locations with multiple high-power chargers for electric cars. Despite governmental grants for hydrogen fueling stations, they will not make any money if they sell hydrogen produced from renewable energies. And even with hydrogen from fossil sources profitability is uncertain.

There’s a sensible number of cars in the daily traffic needed for making profit with a hydrogen fueling station. Some years ago, it was defined the minimal market penetration (share of cars) with FCEVs in Germany must be at 3% in the year 2025. 3% of 42 million cars are around 1,25 million electric cars running on hydrogen, used daily in traffic. This figure of 3% would allow the erection of a hydrogen fueling network running economically sound – and would be the perfect base for the further expansions.

To reach the 1,25 million cars the Germans would need to buy a quarter of a million FCEVs every year until 2025. The root problem: all car manufacturers together plan to produce not more than 100’000 FCEVs for all markets worldwide. Even if the Germans really wanted there is not enough supply by far. In comparison: Tesla sells more BEVs per week than all manufacturers combined have sold FCEVs worldwide since 2013.

Based on these insights a number of companies in the automotive field began to question their strategies: it is unlikely to have enough FCEVs on the streets by the end of this decade for proper businesses with sustainable business models. As a result, many companies in the automotive sector begin to ask profound questions, discussing how their company strategy should look like and where opportunities can be found.

Fueling or charging

Hydrogen comes over long distances transported by trucks to the fueling station while the power comes through cables, the grid, to the charging station. In a world of networks such a mechanical, expensive, and inflexible construct is not future proof, not even talking about the aspects of security when hundreds of trucks filled up with hydrogen are commuting on German roads. The wretched supply situation of the hydrogen fueling stations in California tells the story about how it does not work. In addition, spot samples in the time between summer 2019 and summer 2020 revealed an average of 13% of all hydrogen fueling stations in Europe were out of order, per day. This is a real problem since many stations have one pump only and other stations are 10, more likely 20 to 50 km away.

Fast chargers, in contrast, can be found in groups of four or more units at one location. Large charging stations have 8 to 24 fast chargers and there are a Tesla Supercharger stations in Oslo with 44 Stalls and in Shenzhen with 50 Stalls. In case a charger cannot be used people can switch to another at the same location. Besides this, the failure rate seems to be below 5% and even lower with Superchargers.

There are comprehensive networks with fast chargers in many countries making travelling with a BEV in Europe and the USA easy. Of course, the net of fast chargers must be significantly extended, and in certain regions in Europe fast chargers are a rarity and the failure rate is higher. Therefore, it makes full sense when Ola K?llenius in early September 2021 urgently reminded to establish a European strategy for fast chargers.

Besides the fast chargers there still are countless “snail chargers” (up to 22 kW, particularly in Europe) and in the case of emergency the wall socket at the next restaurant is a solution and the lengthy break can be spent at the friendly people of the restaurant. Most welcome the fact most fast chargers get their energy from renewable sources making driving a car environmentally friendly, at least regarding the energy used. Depending on the country up to 50% of the BEV owners charge their cars ecologically sound through their own photovoltaic system – comfortably and cheap. Making your own hydrogen at home using the sun is technically feasible but very costly and therefore no option for the foreseeable future.

Hydrogen needs a vision

Politicians and many media unveiled their love for hydrogen resulting often in improper statements, verbiage, and questionable media reports. This chitter-chatter is no help for hydrogen since fake news do not sell FCEVs. This prattle reproduces the marketing of the companies involved and is very theoretical. Reality is a different animal as the situation in California sadly depicts. Many prospects are aware of the problems, thus the overly sweetened communications harm the hydrogen community.

A clear strategy in the area of hydrogen and mobility in missing – but wait, at least with Hyundai and their first large project with fuel cell trucks in Switzerland there is something tangible. The project addresses the biggest problem of this technology: the hydrogen fueling infrastructure. This infrastructure has been and will be erected by the clients themselves as part of the project. The first fuel cell trucks arrived late 2020 and until 2025 a total of 1'600 Hyundai trucks with fuel cells will be on the Swiss roads – a remarkable success. This was made possible by several even competing companies but all with the same idea and interests to erect collectively a hydrogen fueling infrastructure. Furthermore, the hydrogen comes form a local company producing the gas using renewable energies. This project makes sense on so many levels. Furthermore, Hyundai provides a flexible solution for use and payment: the trucks come with a pay-per-use-lease. This pragmatic, even visionary project fits into this evolving market. ???

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The vision of hydrogen and fuel cells in cars

By the end of August 2021 Toyota and Mazda announced their new hydrogen propelled cars – surprisingly with internal combustion engines, too: Mazda wants to build a sleek grand turismo incorporating a Wankel engine and Toyota a more down-to-earth four cylinder in the Corolla. Along this, Toyota wants to equip the Prius with a fuel cell. All this isn’t certain but at least a small sign hydrogen not being cancelled, yet. However, BMW, Stellantis and JLR plan to build small batch series only and Honda even has withdrawn from the hydrogen and fuel cell market. This isn’t convincing at all regarding the +150 BEVs in many variants from a small convertible to top luxurious cars with a wide choice of cars and models for about any family, company, craftspeople and different budgets.

With the exception of Hyundai, cautiousness is present in the truck business, too. Mercedes seems to have cancelled several models of the GenH2 truck in favor of the battery-electric eActros – they come quicker to the market and seem to have a higher demand. Except for the long-haul fuel cell electric trucks for the United States Volvo seems to have cancelled other fuel cell models, too. Like Mercedes, Volvo seems to have discovered more potential with battery electric trucks. However, there are some good news for fuel cell trucks. Nikola and Iveco together with further partners have signed an agreement to erect a hydrogen fueling infrastructure for trucks in Europe – which could not be used by Mercedes trucks for technical reasons: in contrast to the commonly provided compressed hydrogen Mercedes needs liquified hydrogen. Whether the Swabian separatists build as many GenH2 to make this a sensible choice can be doubted. Furthermore, Nikola and Iveco have signed a MOI only, a similar project by Nikola in the States encounters delays, some big clients have cancelled their orders at Nikola and Nikola must buy technology instead of having it developed by themselves – thus the announcement of the MOI was perceived with a grain of salt. Which is sad because due the lack of a fueling infrastructure there will be no synergies for fuel cell passenger cars.

Hydrogen and Fuel Cells in Cars from 2030

• Maybe we should give FCEVs some time until 2030, for instance.
• Maybe technologies of FCEVs develop much further and fuel cost will be much cheaper.
• Maybe there will be more manufacturers going into FCEVs.
• Maybe we have to urgently go into FCEVs due to the climate crisis.
• Maybe many manufacturers will put a wide choice od interesting FCEVs into the market offering a wide choice and even can deliver in quantities.
• Maybe there will be more than 100'000 FCEVs built and until 2030 we will see many millions on the roads.
• Maybe the governments can be convinced to massively intervene in the free market and will erect a governmental hydrogen fueling stations network.
• Maybe the development of the batteries will not make any progress anymore, will not reach 500 kW charging speed, no solid-state batteries will be built, cost of batteries will not reach $80/kWh, higher energy densities and all other announced developments will be vaporware.
• Maybe there will be a fueling station infrastructure for hydrogen similar to the charging stations network.
• Maybe there will be further huge governmental grants and subsidies for hydrogen.

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Maybe all this happen in another universe and hydrogen in mobility and FCEVs simply are terrible mistakes.

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The term “terrible mistakes” comes from the findings emotionally commented by a manager during a strategy development workshop led by me and was part of the conclusion of the workshop.