Elon Musk says the tech is 'mind-bogglingly stupid,' but hydrogen cars may yet threaten Tesla

Key Points
  • Tesla CEO Elon Musk has said of hydrogen fuel cell vehicles, 'Success is simply not possible.'
  • A 2017 survey of 1,000 global auto executives concluded hydrogen fuel cell technology will ultimately outperform battery-powered electric vehicles.
A customer fills a car with hydrogen at a TrueZero fueling station in Mill Valley, California. The state is spending more than $2.5 billion in clean energy funds to accelerate sales of hydrogen and battery vehicles. That includes $900 million earmarked to complete 200 hydrogen stations and 250,000 charging stations by 2025.
Bloomberg | Bloomberg | Getty Images

Tesla and its competitors in the battery-powered electric vehicle market dominate debate over who will control the future of cars, but there's another kind of green transportation technology making inroads in the United States, and it is based on the most abundant resource in the universe.

Fuel cell electric vehicles (FCEVs) combine hydrogen stored in a tank with oxygen from the air to produce electricity, with water vapor as the by-product. Unlike more common battery-powered electric vehicles, fuel cell vehicles don't need to be plugged in, and current models all exceed 300 miles of range on a full tank. They're filled up with a nozzle almost as quickly as traditional gas and diesel vehicles. While fuel cell vehicles themselves only emit water vapor from their tailpipes, the Union of Concerned Scientists notes that producing hydrogen can lead to pollution. Though renewable sources of hydrogen, such as agricultural and waste sites, are increasing, the majority of the hydrogen sourced for fuel comes from traditional natural gas extraction. Still, the impact is still less than gasoline-powered counterparts.

Hydrogen power has been on the market for years but in an extremely limited capacity. There are currently 39 public hydrogen fueling stations in California (with another 25 in development), along with a couple in Hawaii. Now the East Coast is getting its own infrastructure. A handful of stations are up and running, and more are in the works in New York, New Jersey, Massachusetts, Connecticut and Rhode Island.

Commercial success, consumer challenges

Hydrogen is more established in the commercial market. There are more than 23,000 fuel cell-powered forklifts in operation at warehouses and distribution centers across the U.S. in more than 40 states, including at Amazon and Walmart facilities. There are dozens of fuel cell buses in use or planned in Ohio, Michigan, Illinois and Massachusetts, as well as California.

Consumer hydrogen refueling stations are increasing throughout the world. Toyota and Honda are teaming up with the government in Quebec to build hydrogen infrastructure in Montreal this year, and even oil-rich Saudi Arabia is getting its first station.

Toyota, the world's second-largest automaker, is the largest player in the U.S. consumer market for hydrogen fuel cell cars. Its Mirai – a hydrogen fuel cell family car – has found 5,000 buyers since it was introduced in the fall of 2015. Russ Koble, a spokesman in Toyota's environmental and advanced technology group, said the company expects sales to increase as more fueling stations open.

"Toyota has long maintained that hydrogen fuel cell technology could be a zero-emission solution across a broad spectrum of vehicle types," he said.

Toyota says the scalability of hydrogen fuel cell technology also has led to two applications for California feasibility studies in another area of interest to Tesla: semi-trailer trucks.

Toyota Motor's hydrogen fuel cell powered semi-truck is displayed at AutoMobility LA ahead of the Los Angeles Auto Show
Patrick T. Fallon | Bloomberg | Getty Images

Honda also has made a big commitment to hydrogen. There are currently nearly 1,100 Honda Clarity Fuel Cell vehicles on the road in the U.S., said Natalie Kumaratne, a Honda spokeswoman. Honda only offers the Clarity Fuel Cell in California for lease — it offers battery electric power and hybrid versions of the car for lease or sale. Out of the 20,174 total Claritys sold or leased in 2018, 624 were fuel cell variants, 948 were battery-electrics, and 18,602 were the plug-in hybrid.

Honda and Toyota have teamed up with a subsidiary of Shell Oil to build new hydrogen fueling stations in California. Two have been built thus far, and five are in the works, Kumaratne said. The company is advocating for stations in the Northeastern United States, with several in development. "Partnering with other hydrogen fuel cell manufacturers and industry influencers makes sense. We all have skin in the game," she said.

Hyundai, which currently has 220 hydrogen fuel cell vehicles on the road in the U.S., also sees sales increasing. "We expect the Northeast to be the next big region of hydrogen infrastructure growth," said Derek Joyce, spokesman for the Korean manufacturer's product and advanced powertrain group. The company just introduced the Nexo to the U.S. The EPA rates the midsize crossover's range up to 380 miles, longer than any battery-powered EV on the market.

As of Feb.1, just over 6,000 fuel cell electric vehicles had been sold and leased in the U.S., double Japan, the next biggest market.

Musk on hydrogen 'fool cells'

Tesla co-founder and CEO Elon Musk has dismissed hydrogen fuel cells as "mind-bogglingly stupid," and that is not the only negative thing he has had to say about the technology. He has called them "fool cells," a "load of rubbish," and told Tesla shareholders at an annual meeting years ago that "success is simply not possible."

Musk found a surprising source of support in 2017, when Yoshikazu Tanaka, chief engineer in charge of the Mirai, told Reuters, "Elon Musk is right — it's better to charge the electric car directly by plugging in." But the Toyota executive added that hydrogen is a viable alternative to gasoline. Toyota chairman Takeshi Uchiyamada told Reuters at the same Tokyo auto show in 2017, "We don't really see an adversary 'zero-sum' relationship between the EV (battery powered electric vehicle) and the hydrogen car. We're not about to give up on hydrogen electric fuel-cell technology at all."

The auto industry as a whole has not embraced Musk's battery-or-bust vision of the future. A 2017 survey of 1,000 senior auto executives conducted by KPMG found they believe hydrogen fuel cells have a better long-term future than electric cars and will represent "the real breakthrough" (78 percent), with the auto executives citing the short refueling time of just a few minutes as a major advantage. Sixty-two percent told KPMG that infrastructure challenges will result in the battery-powered electric vehicle market's undoing.

In California, debate continues over whether the subsidies offered by the state to jump-start the fuel cell market have paid back the investment as judged by the limited use of refueling stations and lack of profits. California is committed to the effort begun under former Gov. Jerry Brown to fund renewable energy initiatives, which included a $900 million zero-emissions vehicles plan and funding for electric vehicle charging infrastructure, including 200 hydrogen stations by 2025.

We could see hydrogen fuel cell systems that cost four times less than lithium-ion batteries, as well as providing a much longer range.
David Antonelli
chair of physical chemistry at Lancaster University

GM has not released a fuel cell vehicle for the consumer market, but it has a joint venture with Honda to produce fuel cell stacks at a Michigan plant, a deal that started in 2013 and expanded in 2017, when both companies said the Michigan plant where the fuel stacks are being made could produce vehicles starting in 2020.

Ford has experimented with fuel cell variants of its Focus and Fusion cars, as well as the Edge crossover, but does not offer any such vehicles for sale.

"With a steadily growing share of renewable energies, hydrogen fuel cells could play a role in the future," said a Ford spokesman. "In terms of a widespread market launch, however, the battery is currently in a superior position to the fuel cell – not least because of the cost situation and the available infrastructure. Our work will continue to focus on electrification as we monitor hydrogen's progress. We have no current plans to offer hydrogen fuel cell vehicles."

Fiat Chrysler does not have a fuel cell vehicle on sale in the U.S., but for 15 years it has supported research led by Professor David Antonelli, the chair of physical chemistry at Lancaster University in the U.K., that could bring costs down for the technology. His team is working with a material that enables fuel tanks to be smaller, cheaper and more energy-dense than existing hydrogen fuel technologies as well as battery-powered vehicles.

"The cost of manufacturing our material is so low, and the energy density it can store is so much higher than a lithium-ion battery, that we could see hydrogen fuel cell systems that cost four times less than lithium-ion batteries, as well as providing a much longer range," said Antonelli. The technology has been licensed to a for-profit company called Kubagen, set up by Antonelli.

VIDEO4:4504:45
How America fell back in love with trucks and SUVs
Car model and refueling prices remain big issues

Safety is a concern, as hydrogen is flammable, but so is gasoline and lithium-ion batteries. The transportation of hydrogen for use at refueling stations poses additional safety risks — stations use sensors to monitor for leaks. There have not been serious incidents reported in California, and the industrial sector has been transporting hydrogen for decades.

According to the National Fire Protection Association, alternative-fueled vehicles, a category that includes both hydrogen fuel cell and battery-powered electric, are not more hazardous than traditional internal combustion engines. The NFPA's statistics reveal that approximately every 3 minutes there is a car fire in the U.S. from an internal combustion engine vehicle.

The biggest hurdle, however, may be cost.

The average price for hydrogen fuel in California is about $16/kg — gasoline is sold by the gallon (volume) and hydrogen by the kilogram (weight). To put that in perspective, 1 gal of gasoline has about the same amount of energy as 1 kg of hydrogen. Most fuel cell electric cars carry about 5 kg to 6 kg of hydrogen but go twice the distance of a modern internal combustion engine car with equivalent gas in the tank, which works out to a gasoline-per-gallon equivalent between $5 and $6.

Hydrogen fuel cell cars now average between 312 miles and 380 miles in range, according to the EPA. They will cost about $80 to refuel from empty (most drivers don't let the tank run down to empty before they refuel, so end up refueling at a cost of $55 to $65). That cost is currently being paid for by automakers, who provide lessees with prepaid cards for three years of fueling, up to $15,000. In California, which has the nation's highest gas prices, filling up a conventional car with a large gas tank can cost $40 or more.

Kelley Blue Book estimates annual fuel costs for the Toyota Mirai, Honda Clarity Fuel Cell and Hyundai Nexo at $4,495, which is three to four times the cost of gas-powered alternatives.

"We recognize the automakers can't keep paying for fuel, and we see the line of sight to get there, but it is a volume game and we need to hit a critical mass," said Shane Stephens, principal and chief development officer at FirstElement Fuel, which runs 19 of the 39 hydrogen refueling stations in California and is developing 12 of the 25 additional stations for the state. His company's near-term target is $10/kg, which would equate to roughly $4/gal of gas. "That is a good near-term acceptable number to hit in the next three to five years and get people off automaker-subsidized fuel," Stephens said.

The biggest problem: The cars remain expensive. Nexo, for instance, is the most expensive Hyundai on sale in the U.S., with a starting price of $59,345 (starting prices for the brand's comparably-sized Santa Fe start at $24,250). The Toyota Mirai and Honda Clarity fuel cell models have a similar MSRP in the $59,000 range. These car purchases are eligible for government rebates — in California there is a $5,000 tax rebate available.

Leasing has been a popular consumer choice for fuel cell and battery electric cars because the technology is new and early adopters don't want to be tied into a current model for a long time as the technology advances and efficiency improves.

As with any new technology, fuel cell costs should come down if the market grows and achieves economies of scale in manufacturing and infrastructure. "Honda has a long-term commitment to hydrogen, but you can't sell vehicles without infrastructure," Kumaratne said.

Stephens said if the market can reach "a few hundred thousand cars" in California, it can be cost-competitive with gasoline. That represents a big jump from the 6,000 cars sold so far, but most new auto markets start with limited production runs. Toyota has said it plans to increase production from 3,000 Mirai units per year to 30,000 cars by 2021. "That is a tenfold magnitude increase."

"A few hundred thousand cars in California is not that far off. And that is just Toyota," Stephens said. "This is not about subsidizing the entire growth of the infrastructure but just helping us get over the hump, and that is on the horizon. If we get to a few hundred thousand cars, we can really start to sunset government subsidies and be self-sustaining."

VIDEO5:1605:16
Tesla owner frustrated so fixes his own Model S: easy as 'Legos'

Correction: Hydrogen is the most abundant resource in the universe. Due to an editing error, an earlier version of this article misstated that fact.

Next Article
Key Points
  • Rep. Alexandria Ocasio-Cortez wants to tackle climate change with her proposed Green New Deal.
  • The plans calls for generating 100 percent of the nation's electric power from renewable sources and building a national "smart grid" in just 10 years.
  • Analysts caution such quick action could have unintended consequences and undermine the goal of eliminating carbon emissions.