BMW wakes up from hydrogen dream

Bad news for hydrogen-powered cars translated into good news for electric cars last week.

Skepticism about hydrogen's future as a fuel source grew after BMW r&d boss Klaus Draeger told German business newspaper Handelsblatt last Monday that BMW will not develop a new test fleet of hydrogen-powered cars. Although he added that the automaker would continue to work on the technology, his words are a huge blow because BMW has been one of the most aggressive developers of hydrogen powertrain solutions.

Volkswagen also has de-emphasized its development of hydrogen engines and fuel cells. VW feels hydrogen cars currently are unsuitable for large-scale production.

BMW CEO Norbert Reithofer gave a strong indication at the Frankfurt auto show in September that hydrogen cars were losing favor when he said: “The electric drive is the great hope for the future.”

BMW currently is testing 600 electric versions of its Mini in Germany, the UK and the United States. Trials of the Mini E will start in France next year. Information gathered from the tests will be used to create BMW's battery-powered Megacity Vehicle, which the automaker says will go into series production in the first half of the next decade.

Positive signs

BMW's growing emphasis on electric cars is just one indication that momentum is building for the niche. There were other positive signs last week.

• Think Global resumed production of it City full-electric minicar on Dec. 11. The Norwegian automaker stopped output in the second quarter and nearly collapsed due to the global financial crisis. Think exited court protection in Norway this summer after raising $47 million in new capital and now plans to start delivering units of the City to customers before Christmas.

• Renault announced Dec. 8 it will produce lithium-ion batteries in Portugal starting in 2012. The plant, which will be located in Aveiro, about 250km north of Lisbon, has a projected annual capacity of 50,000 batteries. Renault and alliance partner Nissan also plan to open lithium-ion-battery production plants in France, the UK, Japan, the United States.

• The UK government announced Dec. 8 that starting in April all electric cars will be exempt from company car taxes for five years. The German government also has decided to exempt all electric vehicles from tax for the first five years.

Feel-good story

Despite this momentum, the overall outlook for electric cars is unchanged. Many experts predict that electric cars will have a global market share of 5 percent or less by 2015 to 2020. Renault CEO Carlos Ghosn is more optimistic. He says electric vehicles could have 10 percent of the global market by 2020.

No one knows which estimate will be correct. What we know for sure is that the enthusiasm for electric cars is building despite pitfalls such as limited range, limited recharging infrastructure, lack of battery production capacity and the massive cost of an electric-powered drivetrain.

The rise of electric cars has been the feel-good story of 2009 because it has provided something to get excited about. We see the cars at the auto shows. Some of us even have tested a few of them. Electric vehicles are reality while hydrogen cars remain a fantasy that is too far in the distance to provide any hope during a year that gave us a lot of news we would like to forget.