Behind the Fuel Cell Hype
by Drew Winter with Peter Robinson, Eric Mayne and Herb Shuldiner Ward's AutoWorld, Aug 1, 2002 12:00 PM

During the fuel-crunch years of the 1970s, angry consumers waited in gas lines and mumbled about a new type of carburetor that allowed cars to go 100 miles on a gallon of gas. The carburetor was a fantasy, of course, but many believed the 100-mpg (2.35L/100 km) carburetor never saw the light of day because of a giant conspiracy by auto makers, oil companies and the U.S. government to keep it all top secret in order to hang onto billions in corporate profits.

Right now, quite the opposite scenario is playing out. A tantalizing and very real technology looms on the horizon that has the potential to produce vehicles with zero emissions and eliminate the auto industry's dependence on fossil fuels. And, in an alarming display of good intentions, auto makers, the world's major governments and oil companies like ExxonMobil Corp. are desperately trying to convince the public they can make it happen.

There are no secrets here. The technology is the fuel cell — a device that creates electricity from a chemical reaction between hydrogen and oxygen. Fuel cells have been used for decades in exotic applications such as powering space capsules, but now they are being developed as batteries to power electric cars that can be “gassed up” in a few minutes, rather than needing up to eight hours to recharge like conventional batteries. Proponents such as Larry Burns, General Motors Corp. vice president of Research & Development and Planning, say that by the end of the decade there will be thousands and — eventually — millions of affordable, fun-to-drive FCVs that burn hydrogen instead of gasoline, emitting only a little harmless water vapor from their tailpipes, and it will lead to a new, environmentally friendly “hydrogen economy.” That's not a prediction, he says, it's a promise. GM is spending hundreds of millions of its own dollars to “create the future.”

All around the world, rival auto makers are joining hands to develop and test hydrogen-powered “clean energy” solutions.

In the new hydrogen economy, smog will become a thing of the past, and so will battles between auto makers, governments and environmentalists over emissions and issues such as corporate average fuel economy.

If you think all this sounds too good to be true, you're not alone. A growing number of engineers, executives and Wall Street analysts say that even though FCVs offer enormous potential and will start entering the marketplace in the U.S., Japan and Europe as early as this year, the technology won't be ready for true mass production even 10 years from now, and neither will a hydrogen refueling infrastructure.

In an interview earlier this year with Ward's, Ulrich Eichhorn, the head of research at Volkswagen AG, said he remains skeptical of the hydrogen fuel cell's potential.

“Juergen Schrempp (DaimlerChrysler AG chairman) says he'll have a 0-L (zero fuel consumption) car by 2004,” says Eichhorn. “I want you to ask him these three questions: How will they generate hydrogen? How will the hydrogen be distributed? How will they solve the question of hydrogen storage?”

“When he's answered these, ask how the car starts when the temperature drops below freezing. Then, how much the car is going to cost and where it will be refueled.

“I think they are getting desperate, trying to live up to their promises,” Eichhorn says.

DaimlerChrysler had no comment on Eichhorn's statements, but sources say Eichhorn is trashing fuel cells because he's spending most of VW's research dollars on new-generation diesel engines.

GM's Burns brushes off Eichhorn's concerns. He says there are many ways to generate hydrogen. GM also has developed a reforming process where hydrogen can be generated from gasoline, opening up two possibilities: Either vehicle could fill up with gas and turn it into hydrogen onboard, or perhaps a more likely scenario, today's filling stations could start reforming gasoline and dispensing hydrogen.

The cold-start issue also is being solved, Burns says. GM's fuel cells now can start at temperatures below -20°F (-29°C) after a 20-second warm-up. And he insists GM's FCVs will be fun, affordable and compelling. The biggest technology issue GM is struggling with, he says, is storage. Right now, GM is looking at storing hydrogen on board at very high pressures, (around 10,000 psi, or 690 bar) in metal hydrides, which essentially are porous metal sponges, giving vehicles a 300-mile (483-km) range. Driving around in a vehicle with hydrogen under such high pressure does create safety “perception issues” Burns admits, but he's seen the technology advance so fast in the past three years that he's convinced virtually every issue is solvable. Backed by GM's industrial might and growing credibility, Burns is probably the fuel cell's most persuasive salesman.

Most other top executives are more cautious. Ford Motor Co. plans low-volume, “limited-application development production” of fuel cell vehicles in 2004, with an incremental increase in 2005, and a “step up in volume” in 2006 and 2007, says Richard Parry-Jones, Ford's chief of global product development. “That may provide the springboard for what I call a viable entry, although not very high volume, in 2010,” he says. Even though Honda Motor Co. Ltd. is racing rival Toyota Motor Corp. to be the first to bring a production FCV to the marketplace in Japan and the U.S., fuel cell project leader Yozo Kami splashes cold water on the idea of soon seeing large numbers of FCVs on the road.

“Unless there is a major technological breakthrough, fuel cell vehicles won't be ready for large-scale marketing until 2015 at the earliest, and probably not until 2020,” he says, adding: “If ‘large-scale’ means the same sales volume as the Civic or the Accord (about 600,000 units annually), it could take another 30 years to reach that level.”

Also, Wall Street is losing interest in fuel cells, in part because analysts don't see a big payoff anytime soon. The stock of Ballard Power Systems Inc., the fuel cell supplier to Ford Motor Co., DaimlerChrysler AG, Toyota and others, dropped 17% in mid-July following a story in Barron's Online that also raised issues about storing and distributing hydrogen, and how fast Ballard was burning investment cash.

Despite the dose of healthy skepticism, don't expect fuel cell cars to fade from public view like last-decade's boondoggle: electric cars powered by conventional batteries. Instead, it looks like a knock-down drag out is starting among the world's auto makers. They're choosing up sides on the fuel cell issue, based on how much they're spending on FCV research and development.

On the negative side are companies such as Volkswagen and BMW AG, while the biggest proponents are GM, Ford and DaimlerChrysler. Toyota and Honda also are racing to be seen as technology leaders, but insiders say they likely will be less aggressive in mass-producing FCVs because they now have a huge investment in hybrid electric vehicle (HEV) technology. Because of this investment, some say Japanese OEMs don't want the market to migrate to fuel cells too fast, before they can recoup their investment in hybrids.

Rather than touting fuel cells, BMW is offering cars with internal combustion engines that can run on hydrogen beginning in the '08 model year (see WAW — July '02, p.26). Christoph Huss, BMW senior vice president-science and traffic policy, says, “We don't believe the fuel cell will work as a drivetrain within the next few years. The internal combustion engine is well known, and it is easier to redevelop the engine,” he says.

Some speculate that BMW's position runs deeper than that. Perhaps more than any other auto maker, building flawless internal combustion engines is a central part of BMW's brand character. Its logo, after all, is a symbolic airplane propeller that honors BMW's origin as an aircraft-engine producer.

Making fuel cell powerplants that are full of tubes and filters and gurgle like a fish tank would not be an easy transition.

It likely will not be an easy transition for drivers who love the internal combustion engine, either, but GM's Burns says FCVs can, and will, be fun to drive. He's promising to back up his claims by bringing out a driveable prototype of the Autonomy, a radically designed modular FCV “platform,” later this year.

How big has the fuel cell hype gotten? Here's a sample:

• GM rolled out its Autonomy fuel-cell-powered concept amid great fanfare at the Detroit Auto Show in early January. GM's Burns says that because it is designed specifically to employ fuel cell technology, rather than trying to merely replace a traditional internal combustion engine, the concept can take advantage of numerous cost savings.

• DaimlerChrysler's “Natrium,” a fuel-cell-powered minivan that extracts hydrogen from sodium borohydride, a compound derived from borax, made a huge splash earlier this year. Like all other fuel cell cars, the Natrium uses hydrogen for fuel, and sodium borohydride, a caustic chemical you'd never want near your clothes. Headline writers had no use for such facts. Instead there were lots of headlines in major news outlets like: “Is Soap and Water the Fuel of the Future?”

• DC also recently drove another type of FCV, a NECAR 5 that extracts hydrogen from methanol, in a highly publicized trip across the country. Less publicized was the fact that special methanol fueling stops had to be set up the entire length of the trip, and the vehicle was followed closely by a repair van.

• In a move a competitor labeled “a blatant publicity stunt” Toyota Motor Corp. announced last month that it will market a fuel cell hybrid passenger car in Japan and the U.S. by the end of this year, making it the first auto maker to commercialize a fuel cell vehicle. Actually, it will be making only about 20 vehicles available worldwide.

The U.S. government has jumped on the fuel cell bandwagon, too. In early January, the Bush Admin. announced plans to foster the development of hydrogen fuel technology with a program called Freedom Co-operative Automotive Research, or FreedomCAR, which replaces the Clinton-era Partnership for a New Generation of Vehicles. But a director of a technical team for FreedomCAR, Patrick B. Davis, also is cautious when he says it will take more than a decade before mass-produced FCVs hit dealer showrooms. Davis says it will be 2012 before about 50,000 fuel cell vehicles are on the road, and 2015 before 500,000 to 1 million go on sale.

He adds that commitments by auto makers to have fleets on the road by 2004 will amount to tens or perhaps hundreds of vehicles for demonstration fleets in two or three states and he forecasts only some 5,000 FCVs will be in service for taxis and buses in the 2008 to 2012 timeframe, to allow car makers to gauge consumer acceptance before going into mass production.

Americans are more likely to buy into advanced powertrains that the government backs with generous tax credits. That's an idea consumers don't have to wait for. There's talk today in Washington of up to an $8,000 credit for FCVs. Better yet, the idea has partisan support in both houses of Congress.

But hydrogen fuel isn't the only powertrain technology being discussed by engineers. There are many in the auto industry who advocate the use of clean-running, small-displacement turbocharged diesel engines to address fuel efficiency and environmental issues.

Converting to diesel engines could be accomplished sooner and cost less, they say, because it wouldn't require new infrastructure, numerous changes to vehicle architecture, a lot of government support or a broad consumer education campaign about new fuels. Close to 40% of all cars sold in Western Europe now are diesel-powered. Ford just announced it plans to sell a diesel-powered Focus in the U.S. within five years. Company engineers seem convinced new emissions-control advances will see diesels meeting strict future emissions mandates. Such advances could steal even more momentum from the fuel cell push.

Who's right? That likely will be determined by outside factors like Mideast politics, the feistiness of California legislators and possible terrorist attacks. One thing is certain: In the fuel-cell race, it's easier to slow down than speed up.