DETROIT -- Though General Motors has been beaten to the market with hydrogen-powered fuel cell vehicles -- Toyota, Honda and Hyundai are marketing them now in California -- GM has a shot at being a leader in another and more important way: the first to make a profit selling them.
GM and Honda recently updated journalists and analysts on their joint fuel cell development efforts. The companies have broadened a partnership to include a new manufacturing company that will produce the fuel cell, and ready for a vehicle by around 2021.
Honda has committed to using the new GM-Honda fuel cell in the next-generation Clarity, which is expected around that time.
But Mark Reuss, GM’s product development chief, wouldn’t commit to a date when the GM will offer a fuel cell vehicle for sale or lease to consumers. Fuel cells, as you know, create electricity from a chemical reaction between hydrogen and oxygen with the only one byproduct: steam vapor. The electricity created in the fuel replaces the bulky battery pack. Fuel cell vehicles are considered the holy grail of green technology because there are no harmful tailpipe emissions.
But the metal plates the neutrons and electrons pass through inside the stack contain expensive precious metals, such as platinum, and because they have to be assembled in a clean room-like atmosphere, fuel cell stacks are labor intensive to manufacture. Today, they are hand-assembled because the high volume machinery to mass produce them has not been perfected.
One way to get manufacturing costs down is to get the volume up and produce the fuel cell stacks in high numbers. But that’s a problem right now and will be for years to come because there isn’t enough demand for fuel cell vehicles and, more importantly, there’s isn’t a nationwide hydrogen fueling infrastructure for light vehicles.
I asked Reuss and Charlie Freese, director of GM’s global fuel cell business, about manufacturing, which is the key to making the advanced powertrain economically viable.
They gave no detailed answers, but said the process would be "highly automated.” That’s an important clue into GM’s thinking. If GM can crank out fuel cells but isn’t planning on putting them into vehicles, where might they go?
Reuss specifically cited aerospace and military applications for its version of the new GM-Honda fuel cell stack. The latest fuel cell stack, shown at a metro Detroit press conference last month, is about the size and shape of a window air conditioner unit, and generates enough power to propel a C-segment compact car like the Chevrolet Bolt.
But I think there is a third and better option for GM to quickly gain high manufacturing volume: Install its new fuel cells as back up power units for its North American office and engineering operations. Since the size of the fuel cell and the power it can generate is infinitely variable simply by adding more stacks or layers to the fuel cell, GM could phase out its old-style -- and environmentally unfriendly -- diesel-powered emergency generators and replace them with its own fuel cell stacks.
In fact, GM could make this into a profitable business. First, GM gains the experience of connecting its fuel cell power backup systems and plumbing in the hydrogen fuel supply to its own buildings and then it can sell and install the systems to other businesses.
“The real catch in consumer acceptance is the refueling infrastructure,” said IHS Markit analyst Stephanie Brinley. She says, and I agree, that installing fuel cells in buildings won’t do much to help increase the number of hydrogen fueling stations available to the general public.
But she agrees that using fuel cells to power buildings in emergencies is one way to reduce the manufacturing cost of the stacks.
Tesla’s Solar City is gearing up to mass produce its Powerwall home system that provides power when the grid goes down and reduces rates by switching off the power grid when rates are high. A hydrogen fuel cell can do these same things.
The fuel cell riddle has always been a question of what comes first after the technology is perfected, the vehicle or the fuel. But I think, a third option, high volume production for power back up systems, might lower costs enough to enable fuel cells to start replacing batteries in electric vehicles faster.
Right now it is highly unlikely anyone is making money selling fuel cell vehicles. They are available only in California and only a few thousand units per year are sold to consumers. But automakers have proven the technology works in cars. The next step, perhaps, is figuring out how to make fuel cells a profitable business.