Fuel cells key to decarbonization

Thirty miles north of General Motors' headquarters in Detroit, hundreds of engineers are developing a zero-emission alternative to battery-electric vehicles: hydrogen fuel cells.

They coat ink onto carbon paper and produce miles of seals that separate air, water and coolant. They build small-scale electrodes to test chemistries designed to create electricity from hydrogen with water as the only byproduct.

GM and other automakers have worked on hydrogen fuel cells for decades, but the technology has languished in the shadow of gasoline and battery-electric vehicle development.

Now, fuel cells are playing a key role in automakers' strategies as the push to decarbonize becomes more urgent.

GM has a fuel cell lab in Pontiac, Mich., and an operation with Honda in Brownstown Township, Mich. The automaker builds cells that go into stacks to make up a fuel cell system. Each of the 300 cells in GM's stack creates 300 watts of power, said Charlie Freese, executive director of GM's hydrogen fuel cell business. The system is "almost magical," Freese said.

Fuel cells are usually compared with engines in internal combustion vehicles. But "in a fuel cell stack, there are no moving parts," Freese said. "They're literally just sitting there with the air and the hydrogen flowing through the system."

But automakers have found only a limited market for fuel cell passenger vehicles. Instead, they are finding uses for the technology in trucks, buses and backup power generation. And they are taking the technology to other industries, such as locomotive, marine and aerospace.

Alan Martin, a technical specialist for Hydrotec, GM's fuel cell brand, said the automaker found its hydrogen sweet spot a couple of years ago in cross-industry partnerships. GM can stack power cubes like Lego bricks to meet each customer's energy need, he said.

"Everything wants to go electric right now," he said. "When you get to the trucks and trains, this is the technology that makes that possible."

GM partnered with locomotive company Wabtec Corp., aviation company Liebherr- Aerospace and commercial truck manufacturer Navistar in 2021.

Working with GM allows Wabtec to accelerate the rail industry's path to decarbonization, Wabtec CEO Rafael Santana said in a statement announcing the partnership.

The collaborations allow GM to easily adapt technology it has spent decades building, Freese said.

"We don't intend to make locomotives, but we can make the propulsion system parts that go into locomotives and ... do it with the same investments we're making for other applications," he said.

GM's first fuel cell application was in the 1966 Electrovan concept. Beyond the Electrovan, breakthroughs of the costly technology took decades, Freese said. GM retrofitted more than 100 Chevrolet Equinox compact crossovers with a fuel cell system in 2007 before discontinuing the model in 2015.

The technology was expensive for an everyday driver, and hydrogen fueling infrastructure in the U.S. was — and still is — sparse. There are just 57 fueling stations nationally, according to the Department of Energy. GM shifted its fuel cell efforts to larger vehicles, such as commercial trucks.

GM and Honda began working on fuel cells together in 2013 and launched a joint venture called Fuel Cell System Manufacturing to mass-produce an advanced hydrogen fuel cell system in Brownstown Township in 2017. GM and Honda's core fuel cell system is common, but each company uses the system differently. Some components are shared, and some are proprietary, Martin said.

Other automakers have taken a similar approach. Toyota and Hyundai have each developed fuel cell passenger vehicles. But they have sold poorly, and both automakers are using the technology for heavy-duty trucks.

Low build volume and inadequate refueling infrastructure hamper sales of fuel cell passenger vehicles, said Darragh Punch, senior research analyst for North America automotive powertrain and compliance at S&P Global Mobility.

"Infrastructure is woefully insufficient for large-scale rollout," he said. "Suppliers are working hard on hydrogen fuel cell technology but acknowledge that viability will require massive investment from the U.S. government on a similar scale as has already occurred in the pure BEV space."

Sales of Toyota's Mirai fuel cell vehicle have suffered as consumers looking for green automotive models favored BEVs. Toyota sold only about 2,000 Mirai sedans in the U.S. last year, according to the Automotive News Research & Data Center. During the same period, 756,534 BEVs were registered in the U.S., according to Experian.

Now Toyota is repurposing its technology for other markets such as buses, trains, marine applications, heavy-duty trucks and power generators.

Passenger vehicles will continue to play a role in Toyota's hydrogen plans, but limited infrastructure makes them difficult to scale, said Jacquelyn Birdsall, senior engineering manager for Toyota's fuel cell integration group.

Trucking needs less infrastructure, as many commercial vehicles that return to hubs throughout the day could use one massive hydrogen station, Birdsall said.

Light-duty vehicles need many more public filling stations. "That requires a lot more investment, a lot more strategy," she said.

Hyundai Motor Co. sold about 400 Nexo fuel cell crossovers in the U.S. in 2022, according to the Automotive News Research & Data Center. It is using the technology for the fuel cell Xcient tractor, which it launched for the U.S. this year. The automaker also is exploring fuel cell applications in many areas in the water and air.

The industry is approaching a turning point for fuel cells, powered in part by global regulations favoring the technology and decarbonization overall, said Ken Ramirez, head of the global commercial vehicle and hydrogen business division for Hyundai.

"There are a lot of clues that the world is moving to hydrogen more quickly than we thought before," he said. "We really do believe in hydrogen as a major contributor to decarbonization. And so we are playing in many areas."

Honda had a fuel cell vehicle in the light-duty market, the Clarity, but discontinued it after the 2021 model year. The automaker plans to launch another fuel cell vehicle, based on the CR-V compact crossover, in low volumes next year. Light-duty fuel cell vehicles are the most mature application of Honda's technology, the company said.

"We are serious about making them and making it a compelling product for consumers," said Honda spokesperson Chris Martin. "It's unique in the North American market, and it will have a plug-in capability as well."

Honda also built a fuel cell boat prototype to show the technology's capability in marine applications.

Selling fuel cells to other industries can help amortize the development expenses across multiple markets, lowering the expense for each industry, analysts said. The cross-industry uses will bring costs down faster and could accelerate commercialization for automotive applications.

Automakers are "diversifying sources of revenue and also probably building scale to reduce the cost position of procuring everything related to the fuel cell," said Kevin Laczkowski, global co-leader of McKinsey & Co.'s Automotive & Assembly Practice.

Selling the technology is also a way to hedge uncertainty, added Brian Loh, a partner at the firm.

"It is uncertain how fast fuel cells get traction in light vehicle," he said. "Having diversification is a way to hedge."

The commercial vehicle industry will likely invest in fuel cell vehicles first, and then automakers will begin to capitalize on their investments, said Mark Barrott, automotive and mobility practice leader at Plante Moran.

"To a certain extent, we're in an experimental phase," he said. "Volume, cost and efficiency of the technology will help us determine where we end up."