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Why 'mind-bogglingly stupid' hydrogen-powered cars are not going away

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The Toyota Mirai, what the company claims is the world's first mass-produced hydrogen fuel cell vehicle.
Source: S&P Global Market Intelligence

The cars cost a bomb, and the fuel is explosive too. For some, hydrogen-powered vehicles are a pointless distraction as momentum builds behind zero-emission road transport through battery-electric powertrains.

Tesla Inc. CEO Elon Musk, whose cars have thrust electric mobility into the mainstream, says "fool cells" are "mind-bogglingly stupid," while Volkswagen AG has dismissed the concept as impractical, for now at least.

Undeterred, a handful of automakers are dipping their toes into this water-derived energy form, which has become one of the most hotly debated topics in the automotive industry. Renault SA is the latest, announcing in October plans to produce some small hydrogen-powered commercial vehicles. These will join passenger car offerings from Toyota Motor Corp. (the Mirai), Hyundai Motor Co. (the Nexo) and Honda Motor Co. Ltd. (the Clarity.)

"The technology is proven and it's on sale. You can buy or lease it," said Jon Hunt, Toyota U.K.'s manager for alternative fuels, during a test drive of the Mirai. "There is no constraint on the use of the car itself except for infrastructure."

Infrastructure and price. While the smooth and speedy Mirai launched in 2015 demonstrates beyond any doubt that hydrogen cars are a road-ready technology, their Achilles' heel is cost. A new one in the U.K. renders little change out of £70,000 and the fuel is more expensive per mile than gasoline in the few locations it is on sale.

But there is much potential to slash these costs, chiefly through manufacturing scale and design improvements, and to create an appealing commercial proposition from a technology the industry has experimented with since the 1990s, developers say. In that scenario, hydrogen could play its two trump cards: refueling times of just a few minutes, much lower than for battery-electric cars, and much lower weight. This attribute is so important in trucks that hydrogen is now seen as the only credible means of cutting gargantuan CO2 emissions from road freight.

"We can bring the market with us without compromising and we can give them low cost," Hunt said. "Today the Mirai costs £66,000 but that is because we only make 3,000 a year. We have announced that by 2025 we see price parity with the internal combustion engine."

Fundamentally, this is not a battle for supremacy as automakers see distinct roles for batteries and hydrogen. Even longtime hydrogen advocate Toyota sees battery electric as a better option for smaller cars. Plus, with the likelihood of supply bottlenecks as the mining industry tries to keep up with the demand for battery packs, hydrogen could smooth over such bumps on the path to zero-emissions transport.

"You will end up with a mixture. They will compete, and you will see improvements in both technologies," Hunt said.

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Water and electricity

Hydrogen, the earth's most abundant element, is made by using electricity to separate it from oxygen in water molecules, a process known as electrolysis. When hydrogen and oxygen bond again inside a fuel cell, the energy they release is converted to electricity to drive the car's motor.

So far so good. But 70% of the electricity directly and indirectly consumed by hydrogen cars is lost in the process of making, distributing and spending the fuel in the cell before a wheel has turned. By comparison, only 33% of the power is lost between the generation source and the wheels of a battery-electric car.

That inefficiency is still far superior to gasoline engines, which produce more heat than motion from fuel, but implies a reliance on renewable energy that is abundant, cheap and green enough to make such energy losses economically and environmentally inconsequential. With wind and solar power beginning to proliferate amid dramatic falls in cost, that is starting to look a less daunting feat.

"Basically, the target is to get the full-tank price at parity with gasoline in Europe," said Pierre-Etienne Franc, vice president of hydrogen energy at France's Air Liquide SA, which has been in the hydrogen field since beginning to supply it for Ariane rocket launches in the 1980s. "Then the target is to have it with completely zero carbon."

Franc, who is also co-secretary of the Hydrogen Council advocacy group, said the 60-member body that includes energy and technology companies was preparing a study looking at every link in the hydrogen production and distribution chain to evaluate the potential to strip out costs. The report, which foresees hydrogen's use in as many as 35 different applications, including transport, will not be completed until 2020. But Franc said hydrogen would be competitive with alternatives by or before 2030.

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Stumping up the cash to develop virtually nonexistent distribution infrastructure is another hurdle to clear. The options are either high-pressure storage tanks or lower-capacity, stand-alone units that can make the fuel on the spot from water. Both are specialized and expensive, designed to store fuel at high pressures to reduce its bulk, but would fall in price with scale.

Hydrogen has been branded the "Swiss army knife of the energy transition" because of its versatility, and governments and utilities are looking into how it can be mixed with natural gas for heating buildings and even replacing diesel in powering trains. On the hardware side, researchers have already achieved savings by reducing fuel cells' platinum content.

Franc cited consultancy McKinsey's forecast that the hydrogen market could reach annual sales worth $2.5 trillion by 2050 as an indication of its potential.

"If we only get 1% of that, it is double the size of Air Liquide," he said.

The Hydrogen Council envisions some 400 million cars, plus 15 million to 20 million trucks and 5 million buses running on hydrogen by midcentury. This would represent 25% of the total number of each category on the roads.

The Hydrogen Council said in 2017 when it launched that members expected to collectively invest $1.9 billion per year over the 2018-2022 period. But the entity's quadrupling in size since then is likely to have added to that. BMW plans to launch its i Hydrogen Next SUV in 2022, the product of an association it established in 2019 with Toyota to work together on fuel cell technology. Mercedes-Benz parent Daimler will deliver 200 fuel-cell equipped B-Class cars to customers in the U.S. and Europe in 2020.

Lisa Ruf of U.K.-based low-carbon energy consultancy Element Energy said she was observing an uptick in the number of companies partnering through joint ventures to split the cost of creating hydrogen refueling infrastructure.

"The trend on the heavy-duty side is clear already and has been keeping the sector busy. The passenger car is challenging because the investment needed is large, takes a lot of time and is slightly riskier," Ruf said.

"A lot of this interest comes from the European targets being imposed," she said, referring to requirements for automakers to reduce CO2 emissions from their cars incrementally in 2020, 2025 and 2030. "They are not able to achieve these [targets] any other way than through a different model [to combustion engines]."

Hydrogen boom

A few serious accidents, some fatal, have highlighted the risks involved in handling and storing this energy-dense fuel, which is readily ignitable and highly explosive.

In South Korea, where hydrogen has strong backing from the state, a leaking storage tank exploded in May at a research complex, killing two and injuring another six, Reuters reported. In June, two people were injured at a filling station in Norway when hydrogen leaked from a faulty bulk storage tank valve, exploded and detonated the airbags in the car they sat in nearby, according to various media reports.

Backers of hydrogen and battery cars, which also have been linked to spontaneous blazes, say intense media scrutiny of these incidents papers over the regularity of fires in gasoline and diesel vehicles, which are rarely reported. The International Energy Agency also notes that more than 100 million tonnes are distributed and consumed each year, mostly by the chemical and oil industries.

"It isn't safer or more dangerous [than gasoline]. It's a huge energy carrier so it's as dangerous. It is a different animal and people are not used to it. The big advantage it has because it is very light and very small is that it disperses very rapidly into the air," Air Liquide's Franc said. "We should be careful, but also careful about being afraid," he said.

Toyota's Mirai features carbon fiber storage tanks that it only managed to rupture using an armored piercing bullet and says it has been designed to withstand the most severe collisions. This claim has already been tested — there have been four moderate to severe impacts among the 137 Mirais in circulation in the U.K., most of which are driven by police officers and taxi drivers who have clocked up 3 million kilometers so far.

It is also in the U.K. that you will find arguably one of hydrogen fuel's bravest proponents — Hugo Spowers, CEO of the River Simple Movement. The hydrogen-car maker has plans to put thousands of its Rasa two-seat coupes on to the roads despite swimming against almost every conceivable tide: an undeveloped hydrogen car market, a quirky, if cool, product and a leasing-only model, all amid a host of industrywide challenges, including Brexit.

The car has been designed to be lightweight so that a smaller hydrogen fuel cell powertrain can be fitted and both price and fuel consumption are kept down. With close to £30 million invested in the project already, the first two cars on the road and 20 more in the pipeline, Spowers aims to establish by 2022 a plant to produce 5,000 cars per year and expand into last-mile delivery vehicles.

Spowers argues that while less electric energy is lost charging a battery than making hydrogen, battery cars waste a lot lugging their energy supply around in a 1-ton pack.

"Hydrogen is very light and batteries are very heavy. For long-range driving, batteries can become ludicrously inefficient, though for short ranges, they really make sense," Spowers said.

"We don't argue about which will win. We need both."