Long the next big advancement in green transportation, hydrogen may have missed its chance to become a major fuel for light vehicles.
Even as technology advances, battery-electric vehicles have quickly become the green vehicle of choice for most U.S. consumers.
Tesla, which offers only electric vehicles, sold nearly 187,000 cars in California last year, trailing only Toyota’s gasoline autos in market share in the state. During that same period, Toyota sold just 2,094 of its Mirai hydrogen fuel cell cars nationally.
Automakers offer just two hydrogen fuel cell options, the Mirai and the Hyundai NEXO Fuel Cell. Honda said it will sell a hydrogen fuel cell CR-V crossover starting in 2024. It would replace the poorly selling hydrogen Honda Clarity discontinued in 2021.
Contrast that with more than 50 EV models Automotive News estimates are for sale or will come on the market this year. That represents a staggering gap in options — and a finite number of engineers and investment dollars to develop them.
Regarding fuel cell light vehicles, “I think the ship has sailed,” said Brian Collie, a managing director for automotive research at Boston Consulting. “Focus matters, and the reality is that manufacturers operate in a resource-constrained environment.”
By almost every measure, hydrogen is falling behind EVs.
Nearly 2.3 million electric passenger vehicles, but just 15,000 fuel cell light vehicles, were registered in the U.S. since January 2013, according to S&P Global Mobility.
There are just 55 public hydrogen fueling stations in the U.S., according to the Department of Energy. That compares to a federal government estimate of nearly 51,000 public EV charging stations offering more than 130,000 charge ports. That doesn’t include many thousands more home chargers.
Hydrogen also is expensive, especially when it’s generated as a sustainable fuel. Right now, green hydrogen costs about $4.40 per kilogram to manufacture.
The price translates to a fuel cost of 21.6 cents a mile, according to Platts Analytics.
According to a MarketWatch analysis, that’s roughly equivalent to an internal combustion vehicle cost when gasoline is at $4.50 a gallon.
Toyota is addressing that expense by providing a $15,000 fuel card for the Mirai.
And like the problems EV owners have experienced with public chargers, fuel cell drivers find that the hydrogen stations are often unexpectedly offline. The difference is that there are often other EV chargers nearby in urban areas, but it could be a significant distance to the next hydrogen station. Moreover, the federal government has earmarked more than $4 billion in funding to help states build extensive EV charging stations over the next five years.
Still, the broader hope that green hydrogen fuel could provide a powerful decarbonization alternative has attracted massive investments in its development. Green is produced using electrolysis that is clean but it accounts for a tiny percentage of total hydrogen production today. Most hydrogen is generated from methane or natural gas in a process called steam reforming that does not capture greenhouse gases.
Significant resources are already focused on lowering green hydrogen production costs. In its 2021 infrastructure legislation, the Biden administration dedicated $7 billion for four regional hydrogen hubs and an additional $750 million to accelerate clean hydrogen technologies.
The Department of Energy’s Hydrogen Shot research project has created price reduction targets for green hydrogen of $2/kg by 2025 and $1/kg by 2030.
And that, combined with concerns about the electric grid, could make it an option down the road for passenger cars, according to Bernd Heid, a senior partner in climate technologies at McKinsey Consulting.
“With every ton of hydrogen we deploy, the cost comes down,” Heid said. “When the cost is cheap enough, there will be a massive hydrogen infrastructure buildup, mainly for trucks but also for cars.”
Heid expects the massive transition to EVs will “bottleneck” electricity infrastructure and that a mix of EVs and hydrogen vehicles will end up being less expensive than electrifying every last vehicle.
Heid and others have yet to write off hydrogen, noting that it is a good fit for heavy-duty trucks.
In a long-haul Class 8 truck, the heavy batteries take up too much weight and reduce load. Moreover, long charging times defeat their ability to transport goods nimbly. Filling a hydrogen vehicle takes about the same time as a diesel truck.
Toyota is working with Kenworth to create a fuel cell Class 8 truck and already has prototypes operating in Southern California. Daimler Truck Group — the owner of Freightliner — and Volvo Trucks are working together to create a fuel cell powertrain. Other hydrogen truck developers include Hyundai Motor Group and Nikola Corp.
One advantage of trucking is that it requires fewer fueling stations. A network of hydrogen stations, scattered at intervals across the major trucking routes, would allow the long-haul freight industry to use fuel cells.
However, Toyota, Honda and Hyundai still believe there is a role for fuel cell light vehicles and are pushing forward.
Japan and South Korea have long supported hydrogen infrastructure development, and in turn, Toyota and Honda have already spent three decades developing fuel cell technology.
Honda said the design of its hydrogen CR-V will help build confidence in the technology. The new model will include a plug-in aspect, allowing electric charging.
“Electric works for daily usage and provides convenient overnight charging,” said Ryan Harty, the head of energy business development at American Honda Motor Co.
“Hydrogen provides that additional long range and enables the customer to have fast refueling at a public station.”
Honda’s hybrid approach also underlines the philosophy it shares with Toyota: that hydrogen fuel cell technology will complement and augment, rather than displace, EV vehicles.
“There is a completely different use case for hydrogen,” said Jackie Birdsall, the Fuel Cell Ingration Group senior engineering manager at Toyota Motor North America Research and Development.
It could become a good alternative for drivers “who don’t own their own homes, live in apartment buildings in cities where heat and air is a problem, juggle kids and jobs, and don’t have the luxury of sitting at a charger.”
And even if hydrogen car sales take years to enter the U.S., Toyota, Honda and other automakers have established global standards for a universal design.
That significantly lowers market entry barriers, even at a later date.
But even hydrogen enthusiasts admit that hydrogen fuel cell light vehicles remain the solution of the future. McKinsey’s Heid estimates widespread commercialization will take at least a few decades and will be driven partly by grid capacity challenges.
Meanwhile, both EV and hydrogen fuel cell technology is evolving, and it would be shortsighted to undermine further technology research, said Gary Silberg, who leads national automotive industry research at KPMG.
“We should invest in EVs and infrastructure because it is important, but hydrogen is also important to this story and should be important,” Silberg said, describing himself as bullish on hydrogen’s long-term prospects. “It would be foolhardy to put all our eggs in one basket.”