With Toyota in its rearview mirror, GM talks fuel-cell cars (Q&A)
Toyota has unveiled plans to sell a clean and green hydrogen fuel-cell vehicle in the US next year. CNET talks with a GM exec about the challenge of competing.
General Motors has invested over $2.5 billion in fuel cells. So it's serious about the technology. But so is Toyota and Japan.
Toyota announced this week that it plans to sell hydrogen fuel-cell vehicles in the US next year for about $70,000. But don't let the high price fool you. It's more about the message: Toyota wants to be a global leader.
And Toyota has the backing of the Japanese government in the form of subsidies and tax breaks to buttress its efforts.
So, is GM ready for Toyota? And what's the status of the technology as GM sees it?
I talked with Charlie Freese, who is an executive director at General Motors' Powertrain division. Freese is responsible for GM's global fuel-cell activities and leads GM's worldwide fuel-cell development organization, with sites in Michigan; New York; California; Washington, DC; Hawaii; and Germany.
Q: Toyota -- with help from the Japanese government -- seems willing to take financial losses with the goal of being a leader and eventually making money. Maybe lots of it. How does GM view the program in Japan?
Freese: Japan has a lot of things going for it. It does have the help of the Japanese government to help it incentivize the early build-out of stations and infrastructure, and that's a good thing. And you have an oil industry in Japan [that doesn't] have the vertical integration and they're somewhat less resilient in a high-oil-price environment.
And because Japan [has a small land mass], once you've built up the infrastructure, you don't have to worry about the vehicles leaving the network of established refueling stations. That's something that's very difficult to do in the United States because we're a much bigger land mass. So, even if one state chooses to do this, you don't have a way to compensate for when people choose to leave the state with their vehicle.
So how will you compete?
Freese: We've invested over $2.5 billion in the technology. It's a substantial investment. Let me put it this way: We're working as effectively as possible to advance the fuel-cell technology as rapidly as possible. We have to work within the world that exists, not the world as we might like it. And the fact is the Japanese vehicle market is somewhat restricted for nondomestic [vehicles] participating in that market in a substantial way.
So, rather than selling a lot of cars and subsidizing them with huge losses on the cars, we have found ways that we can advance rapidly in our development activities based on the learnings from our Equinox fleet that's out there today. [That fleet has] more than 3 million miles of accumulated real-world customer mileage.
[Overall] it's about trying to take out the costs as fast as possible, because that's what we can control. The best thing I can do is make the car as affordable for as many people as possible within the infrastructure that's available at the time. Let's say you have a California infrastructure, at a certain price point there's a certain number of buyers for that technology.
What about government support in the US?
Freese: We're working right now with the Department of Energy and some other agencies through the H2USA, which is a government-industry and academic consortium of stakeholders that are trying to implement strategies and plans to [build] infrastructure in a more economical and methodical way, so we have some [economic] models that can support rollout and make this workable.
And there's the work that's going on in California, [which is] attempting to use certain funds that have been set aside for clean energy technology and transportation. And that [program] is funding several rounds of [fueling] station investment in California.
So, what are the costs that make hydrogen fuel-cell vehicles impractical -- at least at the moment?
Freese: GM actually put together the first fuel-cell vehicle, in the '60s, the Electro-Van. That was too big and too cumbersome to actually make the technology viable.
The vehicles we run today, the Equinox vehicles, are much more suited to a real-world application. Everyday drivers are using those vehicles. And it's a very clean vehicle to drive. But, still, that technology that's in that vehicle is expensive.
The things that drive cost in a fuel cell are [for example] the precious metal platinum. There's on the order of 90 grams of platinum in those equinox vehicles. We've taken that level down substantially. The ones that we run in the laboratory [and] in development today are well under 30 grams of platinum. And we're developing systems right now that are under 10 grams.
Taking that out of the equation is a big enabler for taking the cost down. And when we're below 10 grams of platinum, now you're at the level that some of the conventional power trains use.
What else is considered cost-prohibitive?
Freese: There are lots of other things in the stack that add cost. There are carbon-fiber type papers that are used to diffuse gases in the cell. That adds cost. There are coatings on plates for improving contact resistance and corrosion and things like that. We've historically used gold, and we've found ways to take the gold out.
All these are learning cycles that we go through to drive the costs out. If you look at the Equinox and compare it to the systems we test today, now we're about half the size and half the mass.
Some things aren't easy to scale, however -- things like compressors that pump the air through the system or injectors [for the] hydrogen. So, the Equinoxes had 7 injectors and a bunch of special valves and special computer systems to run them. We were able to eliminate all but one injector -- and that takes cost out -- but some of these systems still are more costly because they're not in high volume production. It will be a long time before fuel cells are selling in the millions per year with a single part number (which would bring down cost).
And you can't just take turbocharger technology right off an internal combustion engine and drop it on a fuel cell. You have to use compressors that have special air bearing technology and things that allow you to not contaminate a fuel-cell stack with oil.
Then you have the hydrogen storage system on board the vehicle, which is using tanks and valves to store hydrogen in sufficient quantity to give you a 300 to 400 mile range. Those are always going to be more costly than a relatively cheap plastic tank to hold petroleum.
And you have to recognize that you're starting point with a fuel cell is using hybrid technology like batteries and motors, because [it's an] electrically driven system. And you want to be able to recover braking energy. And that's added cost.
What about the infrastructure needed to support hydrogen fuel-cell vehicles? That may be the biggest impediment right now, correct?
Today, the infrastructure for hydrogen is not well developed. And the infrastructure to supply the hydrogen to the refueling station is also not well developed. So, that adds cost to the hydrogen.
So, even if you invest in the fuel cell, you may not be able to recover that investment in terms of operating cost efficiencies. Even though the technology is more than twice as efficient as an internal combustion engine.
And that's because the United States has relatively low petroleum costs.
[Though] it costs $2 million to $2.5 million to put in a hydrogen refueling station (about the same for a petroleum refueling station), those stations don't make money when there are not enough cars using them. So, the economic equations for that are tough to justify until you start to drive enough cars into the region to justify the stations.
You've got to have a collective will to do this. The benefit that comes from hydrogen fuel-cell vehicles is a societal benefit of reducing our reliance on petroleum [and] improving the overall efficiency of the fleet. But the economic costs of putting that car on the road is borne by the person that bought the car. That's the chicken or the egg challenge that exists. And that's why you see Japan taking an initiative to roll out the station network and do it in a large scale way.
How is the hydrogen made and is it in fact relatively low-cost?
Freese: Cost is relative. Sometimes hydrogen is a waste product. They're making products at some [industrial product] plants where the exhaust product is hydrogen. They're venting to the atmosphere. If you capture that, it's essentially free. One of the biggest uses is for refining petroleum fuels. So there's a huge quantity of hydrogen used in those applications.
A lot of hydrogen today is made from steam methane reforming, where you take natural gas to make hydrogen. That's just a convenient way to do it. You can also take any electrical energy and form hydrogen from electrolysis of water. So there's a wide range of ways to do this.
In Orange County in California we have a refueling station that's using landfill or sewage gases. You just take that waste gas and convert that to hydrogen.
How do you get the fuel?
Freese: The fuel is just pure diatomic hydrogen, which is stored at refueling stations in a variety of forms -- in gaseous form or liquid form. And it's chilled and compressed. When we put it on board the vehicle it's in the form of gaseous hydrogen at 10,000 PSI.
And using wind power to make fuel? Could you explain that more?
Freese: You get into this energy arbitrage to optimize the overall energy economy. So anytime there's available wind energy, you produce the electricity (regardless of demand) and if it isn't needed on the grid, you should put it into hydrogen. And that's where the real value comes out of hydrogen and hydrogen fuel-cell vehicles.
A final question. Why not now? Why not bring out a commercial vehicle now, despite the cost?
Freese: If you don't have the infrastructure and you get the timing wrong, the technology can suffer a huge setback. The last thing we want to do is put cars out there and have everybody get so frustrated that it's another 50 years before anyone thinks about fuel cells again. So, the critical mass has to be there at the beginning, and the momentum has to be maintained.