Why hydrogen cars in the US are going to fail
The Mirai is about $60,000. It is about as slow as a Prius. The fueling on the road takes longer than a gasoline car, but less time than an EV. It is rated on paper for achieving about 70 miles per kg H2 cost about 8 cents per mile for fuel.
Why do people buy cars? People may say that they bought the car to be “green”, but in reality, that is just some internal justification. Why do most people by Teslas, is it to be green? Probably not, they want a quick car with certain amenities that looks nice. Elon Musk said it best when he said he wanted to make the best car which just so happens to be green. Why do people buy a Leaf? Greeness, fueling cost, fueling at home, peppiness, and they don’t perceive that they’ll need to travel outside of that range.
Greeness of H2 cars dissected:
The main selling point for the Mirai is because “it’s green”, “breathes in air”, “only emits water vapor”, etc. Do people in general care about environmental “greeness”, not really, hence why they still sell the old model light bulbs and all cars are not hybrids, but let us say that you could sell cars based on one selling point, such as greeness.
Well, let us look at how H2 is made. Most likely, and the cheapest way is via this process called steam reforming. Essentially you take methane (natural gas) heat it up and react it with steam (water). This is a very energy intensive process and emits quite a lot of CO2 and would put a Mirai with emissions worse than a well driven Corolla- so can’t use steam reforming and say it’s green.
How about electrolysis- yeah, that’s the ticket, I’m sure we all saw this in high school chemistry, right? Pass electricity through pure water and get out hydrogen and oxygen. Some issues with this doing it on large scale in an industrial process. If everything was 100% efficient, you need 33.33 kwhr to make 1 kg of H2. Problem is that it’s not 100% efficient. You need pure water, can’t have any salts in there. When you use pure water the efficient drops to around 80% and you now need 41.5 kwhr of energy. You need to compress it though which is another 3-5 kwhr of energy. When all is said and done the energy to “make” one kg of “green” H2 is around 46-50 kwhr. That’s A LOT of energy, and typically it will be coming from electricity grid (see the criticism for EVs not being green, but this is far worse).Now let’s look at the price of this “green” H2, electricity is around 12 cents per kwhr, so you better sell your H2 for more than it cost to make (~$6).
I’m going to put up off-grid solar and could power it that way… yeah… I’ll show you! Ok, so to provide enough H2 to make a Mirai to go 40 miles a day for just the solar set up will run you around $10,000. Ok, those panels last 25 years, so paying $400/yr; assuming you don’t care about interest and whatnot. That excludes the compressor, any thermal management, batteries, and storage of the H2. Sounds good right? Well, here’s the issue, you COULD do that and save $400 OR be grid tied and avoid paying electricity worth over $800. If you have two investments, for $10,000 and one pays $400/yr and the other pays $800/yr, which one do you choose? Electrolysis via solar is out due to economics.
There’s another option that is greener than just using fracked natural gas, that is using decaying matter and then doing steam reforming. Sounds good and is relatively green, except it does not scale to industrial levels nor is it economical vs fracked natural gas.
Value of car
Now that “greenness” is out of the way, let’s look at the value of the car. For around $60,000 you are getting essentially a Prius. For Prius like performance, you want a Prius like price. Quite frankly, if I had $60 K, I’m buying a Hellcat, Corvette, or even a fully loaded Camaro. Even less money I would buy a Mustang, a Genesis, or an MKZ. Sure there will be one or two cars that perform better in that given price range, that’s expected, but when all do, that is a huge problem for sales. This is the same reason why the Tesla Model S is selling so well compared to its competitors (A7, A8, Panamera, etc); the performance (quickness) matches what you expect from a car in that price range. For the Mirai, it should sell for $25-30 K. That would put it on par, or slightly worse than cars in the same price range. $60 K is just an obscene price.
Cost of fueling
Currently the fuel is free, but that will be going away since that is an unsustainable business model when you have to $24-$30/week in fuel. A more sustainable model is “offering” free fuel at a low marginal cost and charging a premium for that service; Let’s say they charge $2000 up front and your are only going to utilize that service for a total of $20/year- that’s a good deal for the company. Charging a $2000 premium for free fuel and having to pay $1500 in fuel costs/year is a horrible idea for a company.
Back to the fueling- Gasoline is $2.70/gallon, Hydrogen is $6/kg. For those to be equal you have to have a 23 mpg per car vs a Mirai. Comparing dissimilar vehicles at that point and the gasoline car has many more advantages vs the H2 car. I had a car that got 23 mpg and was as slow as a Prius and that cost me $500 (an 81 V6 firebird with the gears meant for cruising not quickness), not $60,000 and the first thing I did was replace the engine and the transmission to make it faster at a minor cost to mpg. Sometimes you have to take a hit to make the car quicker, but in this case you are on par with a car 3 decades old, which is just bad. Your competition in terms of running cost and performance should not be a car 3 decades old that was the econo-pony car.
Hydrogen will go down in price if we get 10,000 or 100,000 H2 cars on the road though? You would think so, but there are other industries that use hydrogen to a greater extent. Unless you are an organic farmer who has an EV, my guess is that today you have used something that has been touched by elemental hydrogen. The fertilizer industry and the gasoline refiners use these and it's a $100 bilion dollar industry, yes you read that right, BILLION. So how much money is 100,000 cars @ 4 kg/wk @ 52 weeks @ $6 per kg really going to bring in? 124 million dollars give or take; or about 0.12% of the total H2 industry. Not much at all.
Wait, but how about if we can make the hydrogen super cheap and sell it to the fueling stations? Commondities don't work like that, specifically in small volumes. Economics at work, if you have two companies, CarH2 is making H2 and bootling it up for sale for cars at $1/kg at the pump and Haber-Kellogg Inc (fictional fertilizer manufacturer) is making it for $3 per kg do you know what Haber is is going to do? They'd send a tanker truck over there and buy up all of CarH2 hydrogen.
Conversely, which breakthrough is Toyota or anyone else going to make that has not been thought of in the past 100 or so years in H2 generation to significantly drop the cost? Remember, there is tremendous pressure on the ammonia makers already. You want food, the the big food stores are squeezing big agriculutre for cheap food (so they can make a profit), big agriculture is squeezing the farmers to make cheaper food, to make cheap food they in turn squeeze the fertilizer makers for cheap fertilizer. Fertilizer needs H2 and as such there is pressure to try to decrease the costs as there has been for close to a century.
There's also pressure on oil refiners to make H2 cheap too. They use it to scrub out the sulfur from the oil- it's a sunk cost so they are also looking for ways to make it cheaper and have been for almost a century also.
There have been reports that it takes 10 minutes to fuel up using H2. Not bad, but not as good as gasoline. What about EVs? One the surface it looks much better, BUT most EV owners charge at home or when they have their car sitting for extended periods so it’s a dissimilar comparison.
How about refueling from home for the H2 car? Well, sure there are some systems offered, but they take over night to get you 40 miles AND you need a quite loud compressor AND you need natural gas lines. Only 50% of homes have natural gas, and out of those many can not utilize such systems due to their home configurations. Just as an example, I checked 10 different homes with natural gas, only two had potential to place the natural gas lines in the garage without major renovation. There's also the splitting of a line and piping it to another area. Whenever you had piping, fittings, elbows, etc, you run an increased chance of leakage. May be a small increase, but there's always a risk, so that's why I would avoid it, could be fine, but the risk is still there, you don't want to run flammable piping unless you have to and you want as short runs as possible.
Number of stations
The number of stations is a huge sticking point. This is the chicken or the egg problem. There are about 20 stations, with 300 total slated to be open in CA only. Sounds like a lot, BUT there’s a whole host of issues and these go back to economics. The stations are quite costly to set up, anywhere from $500 K to $2,000,000. Let us fast forward to 2017. There’s let us say 10,000 H2 cars on the road in CA and 200 stations (easy math). That means each station gets 50 cars per week. That’s insanely low foot traffic and justifying investing in a new private station, not with those numbers. Even if you make $10 off each customer and the station, paid cash for the station, has no insurance and no workers, you only make $500/week your payback period would be 20 years. I’m certain that you need to pay property taxes and insurance though, so I would wager the payback period is much, much longer. I should note when you are doing an economic analysis, they payback period SHOULD be less than 8 years. Anything more than 10 years is a substantial risk anything above 15 is a no-go.
Can't we just retrofit gas stations? It's not that simple or easy. You need cryogenic storage tanks- that's doable, a pain to install, but still can be done. The sticking point is that hydrogen needs unique metals and tends to embrittle (rot) most types of piping. There was an incident in CA where they used the wrong type of metal on just one valve and the the station exploded.
The Mirai could go either way, as a collector’s item or a regular car, but let us assume that it gets used and gets resold and used more. What is the resale value going to look like? It does have a good thing going for it- There is intrinsic value within the proton exchange membrane so it’ll be at minimum worth ~$1,800. That’s your lower limit, scrapped, destroyed, totaled, etc- if you sell it for less, you are getting ripped off. The high limit is a little tricky. Limited number of stations (limited demographic), higher cost of fueling, and poor performance. Let us table the limited stations and demographics. Higher fuel costs and poor performance that's a horrible combination in itself. To put in perspective, which car would you pick, same acceleration, a car that gets 46 mpg or a car that gets 23 mpg? There's no reason to ever pick the 23 mpg car, ever. It makes 0 sense unless you are buying a car just for looks and how many people buy a used car just for looks?