GM and Honda's hydrogen joint venture starts production of fuel cell systems in Michigan

DETROIT — General Motors and Honda Motor Co. have taken a substantial step toward getting hydrogen power into wider commercial use, starting production of hydrogen fuel cell systems co-developed via a joint venture.

They are producing fuel cells and modules at a 70,000-square-foot plant about 20 miles south of Detroit in Brownstown Township. The launch, announced Thursday, builds on a collaboration that began in 2013, which later led to an $85 million investment to create Fuel Cell System Manufacturing.

Years in the making, the production timing is fortuitous. Hydrogen has gained traction as a viable energy source and a promising means to reach decarbonization targets. The U.S. Department of Energy is spending $7 billion to prop up an initial hydrogen economy, which may usher in a shift toward an energy source whose only tailpipe emission is water.

GM's Charlie Freese spent much of his career working with diesel engines. Today, he runs the automaker's hydrogen fuel cell business, Hydrotec, as it works to develop hydrogen power for use in commercial applications that historically have run on diesel engines.

"That's why it's so ironic that my business now is basically to replace them going forward," Freese told Automotive News at a media event for the production launch.

The joint effort is expected to create 80 jobs.

"Our mission with the joint venture was to establish scaled manufacturing of world-class and affordable hydrogen fuel cells for use in various applications by both GM and Honda in their business ventures," from passenger and commercial vehicles to other heavy-duty uses, said Suheb Haq, president of Fuel Cell System Manufacturing.

The production start comes as freezing weather across much of the nation accentuates some practical limitations with battery-electric vehicles, namely that the cold saps battery power. More generally, concerns about the market readiness of EVs have elicited consternation. Hydrogen fuel cells could alleviate some problems, providing high energy density and quick refueling times.

Hydrogen, though more nascent than battery-electric tech, has gained momentum. The Department of Energy selected the winners of its hydrogen hub initiative in the fall. That has provided some measure of market certainty and allowed companies to commit to hydrogen-related plans.

Hyundai provided a prime example this month, placing the majority of its focus at CES on detailing its long-term hydrogen blueprint. The automaker joined the likes of Bosch, Nikola, Forvia, Paccar and others in unveiling hydrogen-related plans at the annual technology showcase in Las Vegas.

The GM-Honda joint venture is a smart strategy for accelerating fuel cell development, said Paul Waatti, manager of industry analysis at research and consulting firm AutoPacific. "It's doubtful that we would be witnessing the first mass-production facility producing viable fuel cell systems for both consumer and commercial use at this stage had these companies pursued fuel cell projects independently."

The fuel cell systems are designed to improve performance and durability and reduce costs, company leaders say, and those made at the joint facility will be produced at about a third less cost when compared with the system used in the 2019 Honda Clarity fuel cell vehicle.

For GM, Freese said, hydrogen could be an ideal replacement for heavy-duty commercial vehicles with heavy payloads that travel long distances and need quick refueling.

GM has multiple partnerships working to apply its hydrogen fuel cell systems, from mining vehicles to cement mixers.

"Fuel cells are now transitioning to the point that they become a viable alternative to those century-old technologies, the diesel engine, that had basically moved the world's economy," Freese said.

Honda envisions applications that include construction equipment, heavy-duty vehicles, stationary storage and — notably — passenger vehicles.

A fuel cell version of the company's top-selling CR-V compact crossover is scheduled to be built at Honda's Performance Manufacturing Center in Ohio this year and targeted for the California market.

"The bottom line is, why not put a fuel cell in our most popular vehicle?" said Jay Joseph, vice president of sustainability and business development at America Honda Motor Co.

"The biggest impetus behind that was, CR-V is our bestselling vehicle. The packaging lends itself really well to different powertrains," Joseph said.

That's a different approach from GM. But the divergence makes sense.

Although GM and Honda are joint-venture partners, they're ultimately competitors in chasing many of the same segments. Utilizing fuel cells in passenger vehicles is one way Honda can differentiate its offerings.

Like Honda, competitors including Hyundai, BMW and Toyota are bullish on fuel cell vehicles, even if there's a wider consensus from industry analysts that suggests medium- and heavy-duty trucking would be the first practical application for fuel cells in transportation.

Honda believes in trucking uses, too. It will begin testing a fuel cell big rig co-developed with Isuzu on public roads in Japan in a matter of weeks, and it expects to introduce a production model for the Japanese market in 2027.

For Honda, production at the Brownstown factory represents one plank in a broader hydrogen strategy. By the end of the decade, the company intends to generate worldwide demand for about 60,000 fuel cell systems per year.

Brownstown could account for about 2,000 systems annually for Honda once production ramps up in 2025.

"There's nothing more valuable than putting products in the market and learning from real-world experience," Joseph said. "This enables us to do that on a much larger scale."