German hydrogen truck maker plants its North American flag in Michigan

German manufacturer Quantron AG is setting up its North American base in Auburn Hills, Mich. with plans to plug into what it considers the next frontier of clean mobility: hydrogen.

The company brought a dozen employees into a 33,000-square-foot office and light industrial warehouse space where it plans to build hydrogen-powered semi-trucks starting in 2024, said Rick Haas, president and CEO of Quantron U.S. Inc.

The trucks will be the centerpiece of Quantron-as-a-Service, a business model that will charge customers per mile to use its vehicles and tap into Quantron's envisioned hydrogen fueling stations and support network. The company also plans to sell its trucks.

The hydrogen-focused business has yet to bear fruit in the U.S., where the alternative fuel source has been slower to take root than in Europe. But Quantron is making a bet that it will eventually take off like battery electric, and Haas wants in before the market is saturated.

"One of the things you have to do is look at the segment and say, 'what is the biggest opportunity here,'" Haas said. "We're a small company trying to grow. I can't put my fingers in 20 bins at the same time."

Quantron recently closed a $49 million Series A funding round in Europe and is working toward a Series B round of more than $100 million. Its revenue is projected to grow nearly fivefold to $65 million in 2023, generated by an electric delivery van contract with Ikea and sales of an electric bus.

Quantron isn't generating revenue in the U.S., nor does it intend to with electric vans or trucks in a space that startups have flooded. Its focus is the Class 8 semi-truck space, considerably less crowded with just a handful of startups, such as Hyzon Motors and Nikola Motor, looking to crack the market.

"At this point in the United States, fuel cell is up and coming," Haas said. "The tech is just developing."

The company expects to invest about $5 million into its Auburn Hills base in the first year. Tucked away in a nondescript building at the back of an industrial park, Haas runs a bare-bones operation. He spent part of a recent workday sanding the frame of a demonstration truck the company plans to debut May 1 at the Advanced Clean Transportation Expo in Anaheim, Calif.

"We have to clean the toilets in this place," Haas said on a tour of the warehouse space. "I'm the one that runs up to Costco to get snacks for the kitchen."

But Haas loves wrenching, and he's comfortable with the startup hustle. He came up in the corporate world, putting in 27 years of engineering leadership work at Ford Motor Co. before serving as an engineering director at Tesla Motors for a year and a half. He worked most recently as president and CEO of Mahindra North America in Auburn Hills before being recruited to Quantron in 2021.

Money and infrastructure are the primary reasons hydrogen vehicles haven't taken hold in the U.S. There are virtually no hydrogen fueling stations outside of California, according to the U.S. Department of Energy.

The cost for Quantron to build a semi exceeds $750,000, Haas said. Even with incentives from California, the production cost must be below $500,000 to make financial sense.

At the same time, the business case for hydrogen seems to be shifting as more vehicle makers come to appreciate the role of hydrogen to hit emission reduction goals and as billions of dollars in incentives for the technology from the federal Inflation Reduction Act come down the pike. The impact of EVs on the electrical grid are also forcing manufacturers to think outside of battery electric.

Haas said it's a matter of time before the cost of hydrogen-fuel cell technology falls, just as it did with EVs.

"It's what battery electric vehicles were 20 years ago," he said. "Hydrogen's going to be the same way: Starts expensive, gets cheap."

Quantron is aiming to beat other companies at setting up hydrogen infrastructure in the U.S., said Richard Ansell, who Haas lured from Mahindra to work as Quantron's vice president of marketing.

"You've got to get the hydrogen. You've got to set up the refueling," Ansell said. "There's a whole infrastructure that needs to happen, which the other players in the U.S. haven't done yet."

The company's as-a-service model also takes the risk away from the consumer, Haas added. Fleet operators can try out the technology without making big capital investments.

"I would want an investment-light way to sniff out the technology, to see if I like it," he said. "That's a way to do it so people can get into it without taking on an excessive amount of risk."

Haas said Quantron has a memorandum of understanding with Nevada-based TMP Logistics Group Ltd. for up to 500 Class 8 trucks for delivery by 2024. He expects more orders to follow as Quantron gets its name out and manufacturing plan squared away.

Haas has faith in hydrogen fuel and its place in the U.S., but the next couple of years will tell whether his timing was right.

"You want to be out ahead of everybody…not so far that you self-destruct, but far enough so that you're the first person people look to when they say, who were the first movers in this segment," he said.