Interest in hydrogen-fueled cars mounts in U.S. as costs decline

For decades, hydrogen has been the Dracula of automotive fuels: Just when you think a stake has been driven through its zero-emissions heart, the technology rises from the grave.

In 2015, even with gasoline cheaper than it has been in years, hydrogen is back to haunt those who insist that battery electric vehicles are the long-term solution for reducing fossil-fuel consumption and carbon-dioxide emissions.

This time -- with hydrogen-fuel-cell costs falling significantly, and a tiny yet budding network of public fueling stations -- automakers are placing their latest long-odds bet on hydrogen cars.

Hyundai has been first in the latest wave of fuel-cell models, which are actually electric cars with one important difference: Instead of a plug-in battery that draws power from the electrical grid, a fuel cell generates power from an electrochemical reaction between onboard hydrogen and oxygen in the air. Clean water trickles out the tailpipe as the only byproduct.

In a technical riposte to most battery electric vehicles, which generally travel less than 100 miles on a charge, and take several hours to recharge, fuel-cell cars operate as conveniently as gasoline models. They travel roughly 300 miles on a tank, and their ultrastrong carbon-fiber tanks can be pumped full of hydrogen in less than 10 minutes.

Count David Uselton and his wife, Suelyn, as true believers.

In June, the couple, from Dana Point, became the second California family to lease the hydrogen version of the Hyundai Tucson crossover sport utility vehicle. They are paying $499 a month with $2,999 down, decisively more than they would for the same Tucson with a gasoline engine. But perks include a $5,000 purchase rebate from the state and three years' worth of free hydrogen from Hyundai.

Uselton, a director of a global e-commerce company, remembers their teenage son's assembling a toy car model about eight years ago. The toy scooted across the floor, powered by a fuel cell that used sunlight to generate hydrogen from water.

"He thought it was really cool and asked, 'Why can't every car work like this?'" Uselton said.

Like the nearly 70 other people who have leased hydrogen-fueled Tucsons, the Useltons were checked out by Hyundai to ensure the car would fit their lifestyle. The criteria included geographic proximity to the nine public hydrogen stations operating around Los Angeles and San Francisco.

"I would rather shamelessly drive to dealerships, asking to be part of the program," Uselton says.

His enthusiasm was driven by a belief that automobiles require a reinvention.

"One thing we know for sure is that oil will not be here forever," he said. "The combustion engine can't be a long-term answer for our grandchildren. There have to be other answers out there."

Uselton appreciates that the Tucson is roomier than the typical small electric car, swallowing gear for his weekend music gigs. Unlike with battery electric vehicles, hydrogen technology easily scales up to power larger vehicles.

Devin Lindsay, a powertrain analyst at IHS Automotive, says that while electric vehicles work well for people who drive set distances and can plan trips around charging, hydrogen could be a better fit for people who have spent a lifetime pumping gasoline.

"EVs still aren't what consumers are used to," Lindsay said. "Fuel cells are promising because their range and fill-up times match what we've grown up with."

Proponents note that hydrogen is the most abundant element in the universe. But deriving that element efficiently has been a major catch, along with a dearth of places to refuel. The cars' onboard fuel cells and storage tanks have been exorbitantly expensive. When Honda tested its first FCX fuel-cell cars in California in 2002, analysts estimated the cars cost up to $1 million each to produce.

Automakers have also talked up hydrogen cars, with skeptics seeing the technology as a pipe dream. Automakers' hands in some ways are being forced: California's powerful regulators have decreed that the six largest automakers build increasing numbers of zero-emissions models, toward a goal of having 87 percent of new cars produce zero tailpipe emissions by 2050.

Those automakers now receive more than twice the credits from California for each fuel-cell car they produce versus battery electrics. California's $5,000 rebate to fuel-cell car buyers compares with $2,500 for an electrict vehicle. Industry analysts have labeled these relatively costly, slow-selling hydrogen and electric-vehicle models "compliance cars," created more to satisfy regulations than consumer demand.

In 2007, General Motors introduced a test fleet of 119 Chevrolet Equinox hydrogen SUVs. The company boldly predicted it would sell as many as 1 million fuel-cell vehicles by 2020. But development stalled, and the industry turned its attention to electric vehicles and plug-in hybrids.

Honda and Mercedes have leased small test fleets of hydrogen cars to California customers. Since 2002, Honda has put 43 of its FCX and FCX Clarity models in consumers' hands. Among more than 28 million passenger cars on California's roads, barely 100 carry hydrogen onboard.

But still, automakers including Toyota -- the unmatched king of hybrids -- remain bullish on hydrogen. Toyota will offer its $58,325 Mirai fuel-cell compact this year, exclusively in California for now. The car's name means future in Japanese. Honda will follow in 2016 with a car based on its streamlined FCV concept model.

Toyota began developing its hydrogen technology more than 20 years ago, even as it began work on the first Prius hybrid, according to John Hanson, Toyota's spokesman for advanced technology. The company says it has reduced the Mirai's fuel-cell cost by 95 percent compared with its previous-generation car.

Toyota has linked up with BMW to develop fuel cells, with other alliances formed by GM and Honda, and by Daimler, Ford and Nissan.

To answer a vexing chicken-and-egg question, automakers are providing seed money to operate fueling stations, reassuring energy providers that if they build them, cars and customers will eventually come. California has committed up to $20 million a year to develop stations, with perhaps 40 expected to be in operation by the end of 2016.

Uselton hopes to see stations open north of Los Angeles, which would extend his Hyundai's range far enough for him to visit his daughter, a college student in Santa Barbara.

Today, most hydrogen is derived from natural gas production, diminishing its environmental edge. But backers see promise in producing hydrogen by splitting water using solar, wind or other renewable power. In Fountain Valley, Calif., Uselton fills his Tucson from a demonstration station, created via an Energy Department grant, that turns municipal waste into enough hydrogen to fuel up to 50 cars a day.

Lindsay at IHS said that with the internal combustion engine continuing to evolve and improve, it will be decades before the majority of Americans switch to alternative-fuel cars. But with enough cars and infrastructure, hydrogen could become a valuable part of the energy portfolio.

"We may end up having two different zero-emissions technologies that will move us away from gasoline," he said.

Toyota is confident it could sell perhaps 3,000 Mirais in California through 2017. Even that is a relatively small number, but the company envisions a hydrogen nucleus that will spread to the East Coast and eventually the whole nation.

"It's taken 25 years to get vehicles to market, and it's going to be a long road to socialize the technology," Hanson said. "But it's a pretty good place to be right now."

SundayMonday Business on 04/20/2015

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