Honda Motor Co. believes hydrogen will power the cars of the future, a stance at odds with the Obama administration’s decision to drop automotive fuel-cell technology in favor of battery-run vehicles.
“Fuel-cell cars will become necessary,” said Takashi Moriya, head of Tokyo-based Honda’s group developing the technology. “We’re positioning it as the ultimate zero-emission car.”
Honda, the only carmaker leasing fuel-cell autos to individuals, opened a production line last year in Tochigi Prefecture to make 200 FCX Clarity sedans. The U.S. Energy Department sought to eliminate hydrogen-station funding and instead lend $1.6 billion to Nissan Motor Co. and $465 million to Tesla Motors Inc. to build electric cars, and give $2.4 billion in grants to lithium-ion battery makers.
“Honda has a propensity to think very long-term,” said Ed Kim, an analyst at AutoPacific Inc. in Tustin, Calif. “It’s also part of the company culture that if they’ve made a decision they think is correct, they’ll really stick with it.”
Honda isn’t alone. Toyota Motor Corp., Daimler AG, General Motors Corp. and Hyundai Motor Co. say hydrogen, the universe’s most abundant element, is among the few options to replace oil as a low-carbon transportation fuel.
U.S. Energy Secretary Steven Chu said in May his department would “be moving away” from hydrogen as it’s unlikely the U.S. can convert to the fuel even after 20 years. Nissan Chief Executive Officer Carlos Ghosn predicts battery cars may grab 10 percent of global auto sales by 2020. Honda hasn’t announced plans for a battery-electric car.
Honda’s American depositary receipts fell 3 cents to $31.93 at 4:02 p.m. in New York Stock Exchange composite trading. They have risen 50 percent this year.
Hydrogen, made mainly for industrial use from natural gas, costs about $5 to $10 per kg for vehicles in California, more than double an equivalent amount of gasoline. Fuel-cell cars also have at least double the efficiency of gasoline models, with Clarity averaging 96 km per kg.
The Energy Department estimates future prices for hydrogen will fall to $2 to $3 a kg, Toyota said Aug. 6.
The fuel can also be made from solar and wind power and even human waste.
Toyota President Akio Toyoda said Aug. 5 his company plans consumer sales of fuel-cell cars within six years. Toyota, like Honda, is making “exponential progress” with the technology, Justin Ward, manager of Toyota’s U.S. advanced power train program, said in an interview.
Battery cars are further along in the market. Mitsubishi Motors Corp. started selling the i-MiEV last month. Tesla sells the $109,000 Roadster and Nissan unveiled its electric Leaf this month, with sales to start in Japan and the U.S. next year.
Honda says hydrogen vehicles match the refueling style drivers are used to: filling up in minutes at a service station. Nissan’s Leaf recharges fully in 30 minutes with a fast-charger, or up to 16 hours on a household outlet, said Tetsuro Sasaki, senior manager of Nissan’s battery test group.
A budget crisis slowed plans for more hydrogen stations in California, home to the biggest fleet of cars using the fuel. At the federal level, Chu sought $333.3 million in May for battery and advanced gasoline autos in the 2010 budget, up 22 percent. Hydrogen funds were cut 60 percent to $68 million, slashing money that would have gone to transportation projects.
The Clarity is available in the U.S. only in Los Angeles, where drivers can use as many as 16 hydrogen stations. The car, which seats five, has a top speed of 160 kph and goes 386 km, more than double the 160-km range of Nissan’s compact electric car. Through July, Honda leased cars to 10 drivers for $600 a month.
The need for a network of hydrogen filling stations is a problem.
“We cannot do infrastructure alone,” said Moriya. “We’ve been developing the cars on our own without government support.”
The Senate and House voted in July to restore the funds. President Barack Obama must approve the final budget.
Honda and Toyota will have to reduce production costs to win over consumers. Fuel cells need platinum — a precious metal that costs more than $1,200 an ounce (28 grams) — and current durability is half that of gasoline engines, according to Moriya.
Honda plans to offer hydrogen-fuel cars at prices comparable to midsize gasoline autos by 2020, down from a company estimate that Clarity’s hand-built predecessor cost about $1 million. Moriya wouldn’t discuss the Clarity’s price.
Honda engineers in Tochigi are trying to trim costs. For 13 months, technicians have worked in a semiconductor-style clean room, coating rolls of plastic film for fuel-cell membranes. Nearby, a press stamps stainless-steel plates that will grip the material. Hundreds of the cells are then sealed in a metal case, forming the fuel-cell stack.
Honda’s hydrogen push has been undermined by plunging sales in the U.S. Funds for fuel cells were cut and some spending shifted to other “priorities,” Moriya said, without elaborating.