The fuel cell follies: are they just around the corner or a perennial pipedream?

Chief Executive, The, July, 2005 by Herbert Shuldiner

Standing beside a hydrogen-powered Chevrolet pickup truck built for the Army at a research facility near Rochester, Sen. Hillary Clinton of New York has the ear of a GM official, urging him to build a fuel cell vehicle plant at the site. "Upstate New York is uniquely positioned to develop this technology," she says. With a frozen smile, Byron McCormick, GM's director of fuel cell development, patiently deflects the suggestion, insisting that a decision on building a fuel cell plant isn't imminent.

Clinton may be well into her third or fourth term before the first factories to mass-produce fuel cell vehicles are built. Automakers are quick to say that hydrogen fuel cells will allow them to build genuine zero emissions vehicles, removing cars and trucks from the environmental equation. Ford, GM, DaimlerChrysler and Toyota, among others, have invested more than $1 billion each in fuel cell programs: BMW is also pursuing a hydrogen future and hopes to use the fuel in conventional internal combustion engines.

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However, questions persist about whether the expenditures are part of a dedicated effort to eventually market fuel cell vehicles, or part of a clever public relations ploy designed to distract the government from imposing more stringent fuel economy and auto emissions limits. The industry has repeatedly announced dates that fuel cells would be available, only to postpone actual rollouts. DaimlerChrysler, for example, predicted the industry would be selling 100,000 fuel cell vehicles (FCVs) by 2004. Obviously, that did not happen.

Skeptics include Joseph J. Romm, author of The Hype About Hydrogen, who supervised transportation fuel cell research at the Department of Energy during former President Clinton's tenure. "Switching our vehicles to a gas doesn't make sense," he says. "The benefits of hydrogen can drop dramatically when hybrids are considered, and it's going to cost a lot more than gasoline." He predicts fuel cell vehicles will never have less than a $10,000 price premium over internal combustion vehicles. "Never in our lifetime," he says.

Romm, who drives a Toyota Prius hybrid, is reluctant to label the push toward fuel cells a publicity ploy. "Part of the reason they're doing this is to undermine the case for fuel economy." Romm says. "I don't think it's a conspiracy, but it's a major business mistake."

Hope and Hype

While it's true that hydrogen promises to reduce America's ravenous appetite for imported petroleum, numerous obstacles remain. For starters, fuel cells are still too cost-prohibitive for conventional, commercial applications, despite the billion-dollar investments by global vehicle manufacturers. Hydrogen is the lightest and most abundant element in the universe, yet is difficult and expensive to extract from hydrocarbons or water, requiring more energy to unlock than can be obtained from it.

Assuming the costs of fuel were lower, someone would need to create a hydrogen distribution infrastructure, and that still wouldn't address the fact that fuel cell performance currently pales in comparison to that of the internal combustion engine.

Hydrogen is also very difficult to store; as a gas it must be kept in a tank under very high pressure, and as a liquid it must be cryogenically stored in expensive insulated tanks. Toyota recently unveiled a new high-pressure hydrogen tank that stores 1.7 times more hydrogen than what is currently available. The new tank would give Toyota's fuel cell vehicles a 375-mile cruise range, making it comparable to cars with internal combustion engines.

While Romm questions the direction many automakers are heading in with regard to their commitment to FCVs, he readily concedes that some people at GM are "true believers" in the technology. Larry Burns, GM's vice president of R & D and one of the industry's greatest champions of fuel-cell vehicles, is one of those believers. "Why would we spend so much money on a PR program?" Burns asks. GM's fuel cell R & D budget is running at $150 million annually, and according to Burns' estimates, GM will have invested $2 billion by the time its prototype fuel cell vehicle debuts in 2010. But he won't say when GM might have a fuel cell ready for sale.

Such a vehicle must also be affordable at scale volume, he says. "We won't start building such vehicles until there is a compelling business case that they can earn a profit. That's Rick Wagoner's assignment to me." However, Burns forecasts that GM will be the first carmaker to sell 1 million fuel cell vehicles profitably.

GM's current experimental 40-vehicle fuel cell test fleet, like those of its competitors, is based on serial production cars that have been modified to run on fuel cell stacks rather than internal combustion engines. They are based on the Opel Zafira, a non-U.S. minivan.

Later this year, GM plans to test the Sequel, its latest in a series of fuel cell concept cars that's about the size of a Cadillac SRX. It's built on a "skateboard" chassis that Burns argues will reinvent the automobile because it can be scaled up or down to accommodate any size, from compact car to pickup. The Sequel is designed to have a cruise range of 300 miles and accelerate from 0 to 60 mph in under 10 seconds.