By David Sedgwick and Gabe Nelson, Crain News Service
DETROIT (Feb. 5, 2013) — A fresh wave of enthusiasm for fuel cell vehicles among auto makers is running up against an old problem.
It's a "Catch-22." Car makers are reluctant to build fuel cell vehicles in significant volume without stations to refuel them. But fuel producers don't want to build stations without fleets of vehicles to use them.
Toyota Motor Corp. and BMW A.G. last month announced a fuel cell production alliance, and last week Daimler A.G., Ford Motor Co. and Nissan Motor Co. Ltd. said they would join to develop a line of affordable fuel cell cars for sale as early as 2017.
Daimler R&D chief Thomas Weber last week bragged that his company's alliance ultimately would produce as many as 100,000 units.
"We believe we were never as close to reaching a breakthrough in fuel cell cars as today, thanks to this partnership," he said.
With the cost of fuel cells declining steadily, the biggest barrier to the technology may be a lack of fuel stations. California is trying to fix that.
In a draft document released in January, the California Energy Commission called for construction of 68 stations statewide by 2015. That should be enough to support the first wave of vehicles, the commission concluded.
Eight public fueling stations are open and 13 more are scheduled to open this year, according to the California Fuel Cell Partnership. The stations will be clustered in Southern California and the San Francisco Bay area.
The partnership—a group of auto makers, suppliers and energy producers with headquarters in Sacramento, Calif.—estimated in 2009 that 53,000 fuel cell powered vehicles would be on California roads by 2017.
More stations needed
That's a sharp uptick from the state's fleet of 200 fuel cell vehicles, and it may be too optimistic. But it's clear that auto makers will need a larger network of stations if fuel cells catch on, said Catherine Dunwoody, the partnership's executive director.
By 2017, "we will need 100 stations to make the market grow," Ms. Dunwoody said. "We are looking for ways to fund that."
Each hydrogen station costs $1 million to $1.5 million to build, Ms. Dunwoody estimated. By 2015, the price tag will grow to $2 million apiece because the stations will be larger.
The state's energy commission has earmarked $28.6 million for new facilities—not enough for a complete network. So where will the money come from?
The California Air Resources Board has proposed that the state's seven major petroleum companies fund construction of hydrogen pumps after 20,000 fuel cell vehicles are on California roads, or after 10,000 vehicles are in one region—Los Angeles, for instance.
The board has not yet proposed a specific number of stations to be built by the refiners.
Jon Bereisa, a former GM executive who runs a consulting business in Detroit, said Daimler, Toyota, Honda and General Motors Co. should be considered the leaders in fuel cell development. Each fielded a test fleet in California.
GM concluded its public field test—dubbed Project Driveway—in 2010, but Daimler has aggressively promoted fuel cells. In 2009, the company introduced the B-class F-Cell, a compact car powered by a 136-hp electric motor.
Honda, which has leased 25 FCX Clarity fuel cell vehicles to retail customers in California, has taken a similar stance.
Last September, company President Takanobu Ito announced plans to produce a next-generation fuel cell car in 2015, a vehicle that would have more range and significantly less cost.
But Steve Ellis, Honda's U.S. manager of sales and marketing for fuel cell vehicles, said it's too soon to visualize fleets of fuel cell vehicles on U.S. roads.
"We can't deploy them to consumers unless they have a place to refuel," Mr. Ellis said. "We need to have more certainty about the number of stations at least two or three years before we [produce] vehicles for the road."
GM, which built 119 fuel cell powered Chevy Equinoxes for Project Driveway, said it will wait with volume production until a network of stations is in place.
"We won't move on any major scale until consumers have [fuel stations] that they can use," said GM spokesman Kevin Kelly. "You need an infrastructure to service the vehicles."
That leaves the ball in the government's court. At the moment, it seems unlikely that the Obama administration will propose any big spending programs for fuel cells.
Last week, Energy Secretary Steven Chu said the administration is technology neutral. "We are not going to pick natural gas or electric vehicles or fuel cells," Mr. Chu said. "We are pushing research in all of those things."
Mr. Chu, who announced last week that he will leave his post in the administration after a successor is found, said he was impressed by the reliability of fuel cells, which have been used for years to power buses. "But we want our target," he added, "a $20,000 personal vehicle that can compete favorably" with an internal combustion engine.
This report appeared in Automotive News, a Detroit-based sister publication of Tire Business.