Brace Yourself for a Pile-Up of (Mostly) Useless Fuel-Cell Cars

The Mercedes F-Cell hydrogen car. A production version is slated for 2014

It's unusual for automakers to accelerate production timetables, but both Toyota and Daimler are doing that with their fast-track hydrogen fuel-cell cars, which are likely to hit the road in 2014 instead of previously announced 2015. Is the long-hyped hydrogen-energy economy finally upon us?

Uh, no. Automakers are making great strides in cutting costs of fuel-cell cars, to the point that Toyota will be able to offer its first such vehicle for $50,000 instead of the $1 million or more it would have cost a few years ago. The hydrogen-powered cars have a lot of advantages over battery cars, including 300-mile range and three-minute fill-ups. They're also fun to drive.

But we have 160,000 gas stations in America and only 25 hydrogen stations, and that's one honking big roadblock that fuel-cell cars are about to slam into at full speed.

Funding cuts and slow progress
Fuel-cell car development is probably moving faster than battery technology, but, especially in the U.S., state and federal funding for research and stations is under pressure -- and in some cases moving backwards instead of forward. Arnold Schwarzenegger's ambitious "hydrogen highway" collided with budget realities, and Energy Secretary Steven Chu doesn't think the fuel cell is ready for prime time -- that's why he cut funding both last year and this year.

The picture is brighter abroad, especially in Germany and Japan, both of which are investing heavily in hydrogen. They still don't have that many stations, though, and new tech without infrastructure pretty much goes nowhere.

John Hanson, a spokesman for Toyota, told me that carmakers realize that the lack of filling stations is a major obstacle, But he said that as it becomes clear that the cars will be available, public-private partnerships are revving up to build networks of stations. I haven't heard any big announcements, though. If the networks don't materialize in the U.S., Hanson said volume deployment will stay overseas.

Absent government funding, there are also some private efforts, such as the east coast Maine-to-Florida network under construction (one station so far) by Lumber Liquidators chairman Tom Sullivan. But the stations are wicked expensive, $1 million and up, and it could be a decade or more before enough of them are open to make mass-market hydrogen cars practical.

Hoping it happens
The hope is that if they build the cars, the stations will come. In a media briefing with reporters Tuesday, Dieter Zetsche, Mercedes CEO and chairman of Daimler's board, said the company is ahead of schedule:

We've pulled forward, and we now intend to go for volume production in 2014.... Two years later, we will have a next-generation vehicle with an even better cost position and further ramp up volumes. By the middle of this decade, we think we can drive the cost to the equivalent of a diesel hybrid car.

Since fuel-cell vehicles have traditionally been hand-built by Ph.Ds, this is indeed an optimistic projection. But what kind of diesel hybrid is Zetsche talking about? If it's a big luxury SUV, the price tag could be $80,000 or more. He also declined to be specific about volume, but German press reports say the company could produce 10,000 cars in the first year.

Zetsche also emphasized that Germany and Japan will lead with networks of filling stations, and the U.S. remains a question mark. Even in Germany it's moving slowly -- the country is likely to have 50 stations by 2014, but it probably needs 1,000 to make the fuel available nationwide.

Fear of California's fines
For many automakers with fuel-cell programs, including Honda, Toyota, General Motors, Mercedes and Hyundai, a powerful motivator is getting production credits from California's zero emission vehicle (ZEV) program.

Carmakers that don't field enough zero-emission cars are subject to fines of $5,000 for every vehicle they fail to sell, and fear of those penalties is a big motivator. The automakers need to produce 7,500 ZEVs between them for 2012-2014, and the number ramps up to 25,000 for 2015-2017. They get some credit for hybrids and low-emission gas cars, but they're also required to field cars with no emission at all -- and fuel cells qualify. The California Air Resources Board would like to see 5.5 percent of new car sales in the state be zero emission by 2018, and a whopping 14 percent by 2025.

Toyota is candid about its fuel-cell cars being necessary for the mandate. Hanson told me:

We've been basically transparent about the environment we're in, which says that manufacturers who want to sell cars in California have to put X number of zero emission vehicles on the road, based on sales volume. They can be battery electrics, plug-in hybrids or hydrogen cars, and each has different credit values. It's a situation we have to address.

But Hanson is also adamant that it moved up its schedule because of technical breakthroughs, not to comply with government regulations. The cars have indeed become very good, but without filling stations they're kind of like Indy cars without the Indianapolis 500. All dressed up and nowhere to go.

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Photo: Jim Motavalli