APAS e-Newsletter June 2014

Hydrogen Cars – a technology threat to battery Electric Cars  

Tesla Motorsand Toyota Co are well known to most people as suppliers of Green Vehicles.

Tesla's sleek electric vehicles fueled the stock's meteoric 300% rally over the past 12 months, while Toyota's Prius remains the best-selling hybrid vehicle in the market. However, Tesla and Toyota are also the top names to watch in a critical new battle over the future of green vehicles -- battery-powered vs. hydrogen-powered cars.

Tesla CEO Elon Musk in Munich October 2013 has dismissed the idea of hydrogen power for vehicles. He stated there was "no way" for hydrogen cells to be a "workable technology," and that it was "suitable for the upper stage of rockets, but not for cars." When Musk -- also the CEO of SpaceX -- talks about rockets, people listen.

Yet major automakers like Toyota, Honda, and Hyundai continued investing heavily in hydrogen fuel cell vehicles (FCVs) instead of battery electric ones. Last November, Toyota showcased its stunning concept FCV at the Toyota Motor Show in Tokyo and at CES 2014 in Las Vegas in January.

Two other FCVs -- Hyundai's Tucson SUV and Honda's FCX Clarity sedan -- are also scheduled to arrive soon.

Given that California requires at least 15% of all new vehicles sold in the state to produce zero emissions by 2025, it is where the battle for the future of green vehicles will take place.
So who will be right – Tesla from California or some of the biggest automakers in the world? Let's take a closer look at three key considerations facing the adoption of both battery electric and hydrogen vehicles today.

Consideration #1: The cost
The biggest hurdle in making green vehicles mainstream is the price. The average purchase price for light vehicles in America is currently a little less than $30,000, according to Cars.com. A new Toyota Prius currently costs $24,000 to $30,000.

The cheapest Tesla vehicle, the Model S, costs $85,000. A cheaper vehicle, codenamed BlueStar, could cost $40,000 when it arrives in 2016 or 2017. Customers can claim a maximum tax credit of $7,500 for each electric vehicle purchased. President Obama recently proposed boosting that limit to $10,000.

On the other hand, Toyota expects its hydrogen-powered FCV-R to cost a little less than $100,000 when it arrives in 2015. That's still a hefty price tag, but it represents a huge discount from earlier fuel cell prototypes, which reportedly cost nearly $1 million to develop. Hydrogen-powered vehicles are eligible for federal tax credits up to $4,000 as "qualified light-duty fuel cell vehicles," but that limit could be lifted to the same level as electric cars as more hydrogen cars reach the market.

Consideration #2: The infrastructure
The second main question on consumers' minds is the distance that these vehicles can travel on a single charge. The lack of a national infrastructure for battery electric charging and hydrogen fueling stations makes these vehicles impractical for long road trips outside certain regions.

There are currently 121,000 gas stations across America. Electric charging stations are quickly catching up with over 22,000 locations, a number that's growing rapidly because it's simple to set up these stations on top of existing power grids.

One of the broadest efforts was NRG Energy's eVgo, a $39 per month unlimited electric charging service, which was established via partnerships with gas stations, restaurants, and convenience stores. Each electric charging station is estimated to cost between $100,000 and $250,000 to install.

Hydrogen fueling (L) vs. electric charging (R). Source: Flickr, Wikimedia Commons.

Hydrogen fuel cells, however, are a different story. Since there's no pre-existing hydrogen cell infrastructure for most commercial or residential buildings, charging stations have to be built from the ground up at a whopping cost of approximately $2 million each. That's why there are only 55 hydrogen fueling stations in the U.S. -- most of them in Southern California -- even though the technology has been around since the dawn of the millennium.

Toyota by providing financial assistance has collaborated with FirstElement to facilitate a Hydrogen Refueling Network in selected California locations.

The actual amount of financial assistance will be based on an analysis of the grant award to FirstElement by the California Energy Commission’s (CEC) Notice of Proposed Awards (NOPA) announced on Thursday, May 1, and final approval of the NOPA, anticipated in June.

FirstElement will work to develop an integrated and reliable network of fueling stations across California in target market locations approved by Toyota, and consistent with the California Fuel Cell Partnership Road Map.

California has stepped up with the offer to invest $200 million dollars to build 100 stations, and through this financial arrangement with FirstElement and Toyota.  Perhaps most importantly, the infrastructure is to ensure that hydrogen refueling will be available all car brands.

Consideration #3: Fuel efficiency
Infrastructure growth seems to definitely favor battery electric vehicles at the moment, but what about fueling costs compared to regular gasoline and hybrid vehicles? Electric charging services like eVgo charge monthly subscriptions for unlimited charging, so they might be the cheapest option if the owner travels a lot during the month.

But to get a better idea of where hydrogen cars stand, let's compare the cost efficiency of three vehicles -- an average, gas-powered 25 MPG vehicle, the Toyota's Prius, and the hydrogen-powered Honda FCX Clarity, which can travel 67 miles per kilogram of hydrogen. Let's assume that water -- a radical new process -- was used to create the hydrogen at a discounted cost of $1.00 to $1.80 per kilogram.

Based on those numbers, it's easy to see why companies continue backing hydrogen as an alternative fuel source. More importantly, it shows that a $39 per month fee for unlimited electric charging might not be worth it after all -- by comparison, $39 in hydrogen could possibly fuel the Clarity for 1,400 to 1,500 miles. However, the cost of hydrogen production still varies widely -- using natural gas to produce hydrogen, for example, costs $3 to $4 per kilogram, invalidating the Clarity's advantage!

Core advantages by to hydrogen vehicles
Regardless of the hydrogen production cost, hydrogen cars have one key advantage -- the fact that they can be refueled in three minutes, compared to an hour for Tesla's vehicles and longer time for others.

Toyota has turned away from a 20-year effort to create a viable battery-electric vehicle. It claims that hydrogen fuel cells are cheaper on a cost-per-vehicle basis and are more efficient on a well-to-wheel basis.

$6.4 million testing project for Automated technologies

The University of Michigan’s (U-M) Mobility Transformation Center (MTC), along with key partners from a variety of industries, is to begin construction of “simulated urban environment” in the campus. It is for testing of connected and automated vehicles. The project represents the second phase of the Transportation Department’s connected-vehicle safety program.

The off-road, 5-mile test site, to be located on 32 acres of U-M’s North Campus Research Complex in Ann Arbor, Mich., is being designed and built in cooperation with the Michigan Department of Transportation. It will include a network of about three lane miles of concrete and asphalt roads with intersections, traffic signs and signals, sidewalks, roundabouts, benches and simulated buildings. The “test site” will look more like a movie set complete with fake buildings, intersections, streetlights and other obstacles like construction barriers specially tested for automated technology.

Technology with huge potential commercial benefits
Industry partners of the privately funded project will each donate $1 million over the course of three years to support the MTC and its programs. Ford, General Motors and Toyota are among the industry partners, as well as Bosch, Econolite and Xerox.

Systems of connected and automated vehicles could dramatically reduce crashes; relieve urban congestion; and cut pollution and energy use. These add up to opening up broad opportunities in the emerging marketplace.

Last year, as part of a study conducted by the Transportation Research Institute, the department fitted 2,800 cars, trucks, buses and motorcycles with wireless devices that track other vehicles' speed and location and alert drivers to congestion. The goal is to lay the foundations of a commercially viable system of “connected and automated vehicles” -- vehicles that communicate wirelessly with one another and with infrastructure to warn of potential hazards and allow increasing automation of vehicle functions.

Within the next two years, U-M plans to have 9,000 intelligent vehicles operating in Ann Arbor. By 2021, plans call for demonstrating a working system, adding up to 20,000 vehicles across highways in southeastern Michigan.

Challenges to overcome by connected vehicles technology

They must be put together in a way that meets varied consumer demand. Technical issues associated with driver distraction, app integration, and a growing number of inputs must be made in ways that infer the needs of customers who want to carry their technology from the home to the car.

The key is to integrate more features and functions into cabins, while maintaining ease of use without impacting safety.

Developing a connected car involves solving a number of technical challenges.