Fuel Cell Vehicles – on a Path to Nowhere? All Major OEMs Still Committed

Since governments around the world have pledged their support for chargeable electric vehicles (EVs), market observers and the media have pronounced fuel cell vehicles (FCVs) to be obsolete. Toyota in particular has been heavily criticised for pursuing the fuel cell path; investments into this technology are seen as a waste of money. In this report, we outline the positioning and strategies of the major auto manufacturers with regard to FCVs. We also assess the involvement of other interested parties in fuel cell systems and hydrogen production.  Criticisms of FCVs mainly focus on the issues of the FCVs’ price and the lack of supporting infrastructure, and cite the difficulties surrounding hydrogen production. After careful consideration of these issues, PSA concludes that FCVs do have a future - as we discuss, in the last part of this report.

Main Points:

·         While Toyota and Honda are flying the flag for FCVs, all other major automakers remain committed to this new technology, with new models under development. However, these projects are less talked about, as the time horizon is longer than for EVs.

·         Outside the auto industry, other interest groups, such as oil and gas companies, support fuel cell technologies via investments and lobbying. These efforts should help automakers with the introduction of FCVs.

·         The lack of infrastructure is a major obstacle for the adoption of FCVs. Supporters of FCVs are taking a localised approach; installing hydrogen fuelling stations in a select number of regions to increase the FCV penetration there. Also, an initial focus on FC buses and trucks should support a hydrogen fuelling network. This step-by-step introduction should lead to a better coverage in the future. Given the high mileage of the next generation FCVs (e.g. over 600 miles), fewer fuelling stations are needed compared to EV charging points.

·         Even including the energy used to produce hydrogen, FCVs are more environmentally friendly than petrol powered cars. While EVs can be charged directly without the additional step of producing hydrogen, hydrogen’s quality of being an energy carrier (storage capability) could become immensely important in the future, as more renewable energy needs to be stored. An overly heavy reliance on batteries for storage has numerous disadvantages.

·         FCV prices are likely to fall thanks to new materials (substitutes for platinum) and higher volumes.

·         As it will take time to overcome the obstacles mentioned, sales are not likely to take off before the middle of the next decade. Still, we believe that FCVs and EVs can and will co-exist.