Automakers have been pouring billions of dollars into developing fuel cell technology. But, it will be at least another decade before they begin mass production.
Automakers such as Daimler, General Motors and Honda have been pouring billions of dollars into developing fuel cell technology. After a slow start, demand for fuel cell electric vehicles (FCEVs) is expected to grow during the next decade. Frost & Sullivan Inc. (San Antonio) predicts there will be 120,000 vehicles on the road by 2015, despite the lack of a widespread refueling infrastructure.
The FCEV market kicked off last summer when Honda began leasing its FCX Clarity sedan to a handful of high-profile individuals. But, fuel cell vehicle demand during the next decade will be limited to regions that are rich in hydrogen infrastructure.
“Hydrogen-fuelling stations, which are expected to expand around 2015, will trigger pre commercial technology refinement and low-volume production around that time,” says Anjan Kumar, a senior research analyst at Frost & Sullivan Inc. (San Antonio). “Only post-2016 can we expect a ramp up of production, leading to mass commercialization.”
According to Kumar, stringent environmental regulations, increased environmental concerns among consumers, and growing tax incentives are major factors that will accelerate the development of fuel cell technology. “On the incentive front, various producer and consumer tax incentives are developed for FCEVs in Japan and Europe,” Kumar points out. “The U.S government offers fuel cell vehicle credit of $8,000 for light-duty vehicles until 2009 and $4,000 thereafter. Tax credits are to be introduced when fuel cell passenger vehicles are made [widely] available.
“However, the high cost of FCEV technology, due to stacks, battery and electric drive train, remains a significant restraint to its development,” warns Kumar. “The platinum-based catalyst employed in the stacks is mainly responsible for the high material costs of fuel cell vehicles. Consumers will initially have to pay a premium on the FCEV to cover the high production cost and the capital on R&D.”
Another hurdle to widespread deployment of the technology is the fact that there is still no viable means of economical hydrogen production. “Hydrogen can be compressed to one-tenth of its volume in a cryogenic liquid state, but there are boil-off issues at a temperature of -250 C or at a pressure of 700 bars in gaseous state,” says Kumar.