Toyota Mirai
Courtesy of Toyota
By Levi Tillemann
May 13, 2015

Earlier this year, Tesla Motors CEO Elon Musk momentarily demurred when asked about the prospects for automotive fuel cells. Then, he unloaded. Fuel cells, Musk said during a press conference at the Automotive News World Congress, were “extremely silly.” Musk proceeded to deliver what may be the definitive rant against the thing he calls “fool cells.” Best case, he said, the optimized fuel cells of the future lose out against “current batteries.”

Yet while there are certainly a lot of problems with fuel cells, it seems rash to just write them off. Some say success is just around the corner. This year, Toyota will release its first ever hydrogen fuel cell-powered vehicle. And while Musk looms large in U.S. innovation circles, compared to Toyota (TM), as yet Tesla (TSLA) is a flash in the pan. In 2014, Tesla sold 31,600 cars compared to 9 million for Toyota; and while Tesla brings in a few billion dollars a year, Toyota’s annual income is about $250 billion – which makes its company revenue larger than the GDP of Ireland, Qatar or Greece. This year at the Detroit auto show, Tesla had three versions of one car on display; Toyota had more than 70 distinct models.

In light of all this, it makes a lot of sense to try to understand what Toyota sees in fuel cells.

A little context is useful to understand the blood feud between EVs and hydrogen. For one, it didn’t start with Elon Musk. Indeed, it first emerged in 2001. After coming to office, George W. Bush axed a Clinton administration effort to help automakers develop super-efficient cars called the Partnership for a New Generation of Vehicles, or PNGV and replaced it with something called Freedom Car. The most notable element of Freedom Car was a shift away from batteries toward hydrogen fuel cells. Bush also used federal authorities to block California’s efforts to promote battery electric vehicles.

But when Obama took office, battery-powered cars again became a priority for Washington. And with that, the die was cast: hydrogen crystalized as the Republican’s fuel of the future, and electricity the Democrat’s. But there were no fuel cell cars for sale. Many joked that hydrogen was the fuel of the future, had always been the fuel of the future and always would be the fuel of the future. As latte-sipping, limousine liberals cavorted around in Chevy Volts, Nissan Leafs and Tesla Model S, Republicans maintained an almost child-like faith in the future of hydrogen.

This year, I expect that faith will bear fruit. Toyota’s Mirai is the world’s first real attempt at a consumer hydrogen car. It costs $57,500, puts out 153 horsepower and has a zero to sixty of 9 seconds. With only four seats and a teardrop shape, the Mirai looks like a cross between a Toyota Prius and a Chevy Volt. It’s not a beaut. Indeed, unless you are an engineer, technophile, or middle- to later-aged computer scientist you are not likely to be impressed.

Even more challenging than the aesthetics are the logistics. On a full tank, the car gets only 150 miles of range if filled at a 350 bar fueling station and 300 miles if filled at a higher pressure 700 bar fueling station. Toyota gassed up the car I drove at a SunHydro filling station in Wallingford, Connecticut – which is almost 6-hours from Washington, DC and farther away than the vehicle’s actual range would permit. So it had to be trucked down. In fact, currently there are no public hydrogen refueling stations on the Eastern seaboard. Even in California where hydrogen refueling is comparatively thick on the ground there are only nine hydrogen fueling stations across the state, with another 17 under development.

Indeed, the biggest problem (logistical, environmental, infrastructural, economic, etc.) with hydrogen fuel cells is probably the hydrogen itself. This starts with the greenhouse gas footprint. At SunHydro in Connecticut, the gas is derived through solar energy. But generally hydrogen is produced through steam methane reforming (from natural gas), which means a lot of CO2 emitted. The hydrogen needs to be stored either at very high pressures or cryogenically as a liquid – and all of that takes a lot of energy. In terms of greenhouse gas emissions, the Mirai is not much more efficient than your standard Prius – it’s much worse than an electric car. On top of that, hydrogen is explosive, it pools upward in enclosed spaces and can burn with an invisible flame.

Would I buy a Mirai? Not a chance. But that’s probably not a big problem for Toyota, seeing as only 700 units will be produced worldwide in 2015. Still, the Mirai is a marvel of engineering. Its propulsion comes from a fuel cell that combines hydrogen and oxygen together to generate only two things: electricity and water. Floor the accelerator, and all you hear is the electric whir of a fan blowing H2O out of the fuel cell stack.

As a child, I remember watching a rickety, minivan-sized fuel cell vehicle crawl down the road on the Discovery Channel. I was unimpressed. Then, eight years ago, one of Toyota’s engineers explained that their $2 million fuel cell’s cost would reduce by a factor of 20 over the coming decade. I was skeptical and unmoved. But two weeks ago, as I drove the almost painfully vanilla Mirai – a car that had just been used as a pace car for a NASCAR race in Richmond Virginia – I was informed that the car cost Toyota only about $50,000 to build. Was I impressed? Sort of. Because while $50,000 is still enormously expensive, the Mirai (which means “future” in Japanese) is proof that Toyota is executing on its multi-decade vision.

But why is Toyota investing in fuel cells when batteries do a better job today – and for the foreseeable future? For one, it says lithium-ion battery can only achieve incremental improvements in cost and performance. In contrast, Toyota believes an enormous amount of optimization can still be done on fuel cells to reduce costs and improve performance. Theoretically, fuel cells are a better option for heavy-duty trucking and larger cars that need to cover longer ranges. This is largely because batteries are heavy, but hydrogen is light. Want to increase the range on a fuel cell? Just add another hydrogen tank. But at this point, these gains are still theoretical. The Tesla Model S weighs about 5000 pounds with 270 miles of range. That’s very very heavy, but the p85D model has 0-60 of 3.2 seconds and can fit seven people. The Mirai can’t hold a candle to the Model S in terms of utility or performance, and it is also over 4000 pounds.

Another argument Toyota makes is that hydrogen is an ideal storage mechanism for excess energy from renewable sources like wind or solar power. As the proportion of renewable generation rises, there will be times when operators simply need to dump excess load – because the sun is shining bright, or the wind blowing hard. That energy could be used to generate hydrogen from water (by splitting oxygen and hydrogen molecules apart) — possibly at a very low cost. But, of course, you could also store that energy in a battery.

But there’s, one more element that Toyota believes is on hydrogen’s side: the business model. For in terms of business model, hydrogen fuel cells are relatively similar to our current internal combustion engines. Just like an internal combustion engine, fuel cells will likely be manufactured in-house by automakers. In contrast, batteries are bought from an outside suppliers or produced in joint ventures – which costs money. Building a hydrogen distribution infrastructure will be pricey, but once it’s there it will look almost indistinguishable from today’s gas stations.

So while EVs are potentially revolutionary, hydrogen vehicles are much less so – and Toyota thinks that is a good thing. Personally, I’m not so sure.

Toyota has had two hugely transformational technology plays in its history: just in time manufacturing, and the hybrid Prius. Now it is shooting for a third with fuel cells.

Interestingly, the same government institutions that helped drive the commercialization of hybrid and battery electric cars (the California Air Resource Board and Japan’s Ministry of Economics Trade and Industry) are also supporting the roll out of hydrogen vehicles despite the fact that there are huge gaps in the environmental, economic and infrastructure case for hydrogen. Why?

Perhaps they believe in the long-term vision. But the reasons I would continue to invest in hydrogen can be boiled down to one word: optionality. Addressing global warming will require a broad portfolio of clean energy technologies and in the long run we’re not sure which ones will work best. Continuing to invest some risky money in hydrogen fuel cells actually makes a lot of sense. There may be a big payoff down the line.

Japan’s Prime Minister Shinzo Abe is a booster of Toyota and the Mirai. But rather than pooh-poohing Tesla on his recent trip to Silicon Valley, he decided to take a ride in a Tesla P85D with Elon Musk – who called him a “good sport” afterward. Perhaps Elon, and all of us, could take a lesson in the benefits of technological promiscuity from the Japanese prime minister.

Levi Tillemann is the Jeff and Cal Leonard Fellow at the New America Foundation and author of The Great Race: The Global Quest for the Car of the Future, which chronicles the rise of electric cars and China’s messy attempt to leapfrog the West in automotive technology. Previously, he served a two-year presidential appointment advising the U.S. Department of Energy on domestic and international policy.

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