Daniel Fichana's picture

Why hydrogen cars in the US are going to fail

There has been a lot of hoopla about hydrogen cars recently and how they are the alternative to both gasoline and battery cars. Let us look at a sample H2 car, the Mirai. This is the poster child for the H2 car, it’s the best of the best in terms of being a hydrogen sipper.

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.

Fueling time
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.

Resale value
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?

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Comments

ok, regardless of whether you agree with the author, this is a terribly written article. Are there editors at torquenews? I am no english major but even i was put off by run on sentences, incorrect punctuation, and please don't write in the second person, it detracts from credibility.

Nice article Daniel F. I'm not a English major either so no trivial complaints about grammar from me. My spelling skills leave a lot to be desired also. Otherwise I agree 100% with your assessment of Hydrogen as a fuel for cars. Batteries are way more efficient. Over night charging at home is oh so convenient.And yes electricity is everywhere and cheap.

Point taken. I'll try to correct future articles to make them flow better.

You are spot on. Yet so was IBM no one will buy a PC. Too slow, cost too much and just not sexy.

Good day Joseph. I think you make a good analogy and a valid point. When I was in college, we were playing with, "Punch cards". Now the typical smart phone has more computing power than the computers used in the Space program when it was in it's infancy, not to mention going from several tons to ounces, if that. The advancement in technology is growing exponentially and 20-30 years from now, what is thought to be an impossibility today, or at least a far stretch, will be common place. Have a nice evening.

Good day 2 U Daniel. I agree with much of your assessment as it relates to the state of Fuel cell technology TODAY. When developing new technologies you have to start somewhere and Toyota is obviously willing to take the gamble. The development costs on the Mirai were/are staggering. A good part of the 60,000.00 one will pay 2Day, is to help offset those costs. As the technology develops and more focus is spent on the development of manufacturing processes and the economics of bringing costs down, so too will the price. It is not inconceivable that 10 years from now a fuel cell powered car will cost in the same range to purchase and operate as other, more conventional offerings and provide the same type of performance and efficiency within the niche, (maybe better than conventional gas, depending on where gas prices go, and I think it's safe to say, will be going up sooner, more likely than later) . As a side note, most all other Car companies are invested heavily in development of this technology, they would not be doing so if they did not envision a strong market, eventually. Honda, for example looks to be getting close to entering the Market place. Also, keep in mind the Auto industry is not the only one interested in fuel cell technology. For example, the military is investing heavily in development, so are the Energy companies. Fuel cell tech is not a new idea by any means. Serious development has been going on for decades and just approaching the stage where, "practical" usage can start to be realized. So to sum it up, the jury is still out on the practical and economic viability of this Tech., which is still in its infancy. I suspect that just as with traditional, hybrid and EV tech., Hydrogen will also get more and more efficient and practical. Wasn't that long ago that many felt the same about hybrid and EV cars, as you do about Fuel-cell, "An interesting concept without much practical value". Look at how far that technology has come since its infancy, more than likely Fuel-cell will follow that same road. Be Well.

"When developing new technologies you have to start somewhere and Toyota is obviously willing to take the gamble."

No. Toyota is just playing out this failed approach while Prius sales are good, and they future develop their BEV platform. There is no justification anymore for hydrogen as an intermediate fuel source. Future transportation will be powered by stored electrons, and biofuels where high energy densities are needed.

Doesn't explain why other companies are spending a fortune on developing their version of a fuel cell car. They would not be doing so if they did not see a profit, if not now, in the future. They have better things to do with their money than to throw it away on a whim. Bottom line, all speculation, time will tell whether fuel cell will be become a viable tech. for the auto industry, or just an exercise in futility.

Hi Jeff S
I agree that part of the price of the Mirai is due to the development costs, but when the price is set that high there are few buyers willing to purchase a car with that type of performance at that price point. If it was 20 K, it would get more buyers.

Yes, there are military applications, but those are unique, costly, and do not lend the applications to the automotive field. One such application is portable field operations with back-up for solar. The military has different design specifications than the general public, they want easy of movement, lightweight, and easy of set-up. Same reason why batteries are not used in NASA for deep space. Light weight takes priority over anything else (plus the electrolytes in batteries do not fare too well at low deep space temps).

Forklifts are a different story. In 24/7 confined warehouses H2 fuel cells excel. This again is not reflective of the automotive sector, at least for cars.

Also hydrogen cars will not have huge efficiency gains in the future. You need to expend between 0.30 to 0.40 kwhr per mile to move a car at a reasonable highway speed- that is the physics of cars. Within the H2 car there are 3 separate systems at work. The first is the conversion to water; typically 85% efficient. This energy does not go to spin the wheels, but to charge a battery. This charging is around 80% efficient. It's very difficult to push those efficiencies up. The reason why it's not just a proton exchange membrane without a battery is due to the reaction and transport of hydrogen at the PEM. This is a function presure, catalyst activity, surface area, and temperature. Pressure can not increase, that will rupture the PEM. Catalyst, platinum is the best at breaking H2 bonds, already they are micronizing the platinum and cannot increase the actvity. Increasing the PEM thickness does allow for increased pressure, but decreases the rate of transport of H2 across the membrane. The only ways to increase the surface area is to make them thinner (see the pressure problem) or to make them larger. With temperature, that is playing the chasing game. Ideally you want the fuel cells warm or hot. The issue with this is when depressurizing a gas this is soaking up any heat. Hence chasing temeratures. It's a law of physics; PV= nRT.

With EVs there were percieved benefits. While an EV may not be able to do a Cannonball run in 24 hrs, the fueling cost, pick-up, and easy of fueling at home were all compelling reasons.
It comes down to finding the obvious motivation besides a percieved "greeness" for purchasing an alternative fuel automobile.
In the EV world the floor is littered with companies who thought just because it was an EV it will sell. Fisker comes to mind. The car was a "green" car, it even had a solar roof, but did not sell well because the performance did not justify the price, which is the same issue with the Mirai.

Will make this quick. I respectfully beg to differ with your assessment. Yes there are still nuts to crack, including the Physics involved, but I do not see it as an impossible task. Just as with Fusion technology,
the economics and physical laws given are still being researched, to make it a viable energy source. Fuel Cell Tech also is still in the research and development stage. As far as applications outside the auto industry, even though not directly related, technology from one market or application to another often gets shared and modified to fit that specific application. How much technology came out of the space program and trickled into our daily lives, when it too was considered, "Rocket science" without much practical value at the time. It's too early to, "write it off". With regards to the comment you make regarding the Fisker, it just is a terrible car. I counter with the Tesla. Regarding the Mirai, no doubt it is going to be far from a good seller, but I'm guessing that there are enough, "eccentrics" with enough money that it will sell. I worked my entire career in Tech based companies, and owned a tech based company dealing with Hazardous waste handling systems, long enough to know, when it comes to the future of Technology, "never say never". Have a nice weekend.

Thought provoking! However, I believe that fuel processing technologies will catch up with the vehicle.

Hey Parks. Honda's fuel cell concept is intriguing. Actually, I find the Mirai intriguing as well, if nothing more than from an, "oddity" point of view. "Oddity today, practical and commonplace tomorrow". That holds true for about every technological advancement ever made. All Best

Steam reforming is very efficient and does not emit "tons" of carbon, though in some cases people are now building co-generation reformers that use the carbon for other products.

Methane is plentiful and cheap. Reforming can be done close to the source and clean hydrogen shipped via pipeline. We are already producing enough hydrogen to fuel 20 million fuel cell cars. (The issue of stations is just a last mile one, and really sort of trivial).

Good day John. The matter of stations is well on its way. If I recall correctly there is an agreement in the works among 4-5 Mfgs. to start building them. As to CO2, (and it's effect on the environment), that's a debate that goes on and on and on. Regardless of which side of the fence you sit on, regarding that issue, it looks as if, (in the not so distant future), we will, be weaning ourselves off Fossil fuels in earnest. Fuel cell technology is a step in that direction, one that is being rather aggressively pursued by the Auto Mfgs. from across the world, including here in the US. There is really no debate about the Car manufacturers point of view. They see it as a profitable market and the US is the biggest car market of them all. Be Well

Intrinsically, there is nothing wrong with fuel cells. However step into the real world & they are & have been plagued with problems of limited lifespan. The proton membrane, system which current generation fuel cells utilise, just isn't upto the job of providing a fuel cell which will last the current lifetime of an ICE car.

To make things even more depressing, even with economies of scale provided due to mass production, motor manufacturers are going to take a huge hit on the profitability of any EV, that contains a fuel cell. Toyota are faced with selling the fuel cell Mirai model at quite a big loss, to bring the fuel cell EV into line with cost expectations of current ICE, drivers.

Another stumbling block on the hydrogen highway, concept is that hydrogen isn't really a very good energy carrier. Lets remember that hydrogen isn't a fuel. In reality we would probably be better off using any of the current generation of fossil fuel energy carriers, diesel, petrol, natural gas etc, as the energy capacity of these is far higher than hydrogen & the infrastructure is already in place.

Conceptually, there is nothing wrong with providing hydrogen, natural gas & petrol / diesel fuel cell vehicles, as bridge vehicles until we reach that golden future of 100% battery powered vehcles. But as stated earlier, real world problems of limited lifetime proton membrane fuel cells, & the expense of providing hydrogen refuelling infrastructure means we probably won't be seeing these vehcles in mass production any time soon....