Hydrogen propulsion has been talked about for decades.  Daimler has given up while Toyota, Hyundai, and Honda are just kicking it off. What makes it better than electric drive by batteries and what does the future hold? And why is Toyota’s CEO warning against electric cars and talking about a new sales model?

The luster and misery of hydrogen propulsion

Hydrogen propulsion is not so much propulsion in the true sense of the word. Even hydrogen cars (FCV) are electric cars and are powered by one or more electric motors. However, the main difference is where the energy for the electric motors comes from. While conventional EVs (electric cars) reply on energy storage usually in the form of Li-ion batteries and a simple electrochemical reaction, hydrogen cars rely on fuel cells. The principle, invented in 1838 by Sir William Grove, relies on a simple redox reaction between compressed hydrogen in the car’s tank and atmospheric oxygen and takes place in the car’s fuel cell. The “exhaust” is then just ordinary water.  

A clear advantage of fuel cells over batteries is the stability of their capacity regardless of the outdoor temperature and the stability of their “charging” rate (replenishment of hydrogen in the tank) regardless of the outdoor temperature or the previous load of the fuel cell. The obvious disadvantages compared to batteries are larger size for the time being, and especially the lack of a hydrogen fuel station infrastructure. In the entire United States, there are only a few filling stations in California. Hydrogen technology is also clearly more expensive to produce. With the first generation of the Toyota Mirai hydrogen, which sold 10,000 units, Toyota reported lost $100,000 on each unit delivered.

Why hydrogen can be interesting

Akio Toyoda, president of Toyota, is currently the only high-level manager in the ranks of the major car manufacturers to oppose electric cars. And he has his reasons. Electric cars are becoming heavily dependent on the world’s lithium reserves. However, the consumer electronics industry, and, to a lesser extent, medicine (specifically psychiatry) also needs large amounts of lithium. Demand for consumer electronics is growing even faster than for cars.

In addition, more and more countries, including Japan, are beginning to face problems with the power grid. This is due not only to increasing consumption, especially on hot summer days, but also to an increase in the share of renewable energy sources. Countries that regularly experience blackouts, such as Australia, are building gigantic and expensive lithium electricity storage. As Toyoda mentions, soon there may not be places to charge electric cars. Another factor (or maybe the consequence of above mentioned) is the ever-increasing price of energy at charging stations.  Even Tesla has long ceased to offer charging to its customers for free, which has begun to fundamentally change their total cost of ownership (TCO).

Hydrogen is being pushed into buses and the military

For hydrogen propulsion to gain the traction it needs to survive, it will need massive support not only from carmakers, but also from customers and governments. After all, sales of electric cars were kickstarted by massive state subsidies. And it’s slowly starting to happen. Hydrogen is becoming part of regular bus transport in the Netherlands, and part of the US military. GM Defense, the General Motors division supplying military vehicles, is preparing the new SURUS hydrogen autonomous cargo platform and has successfully tested the Chevrolet Colorad ZH2, hyrdogen fuel-cell, with the US army.  Joe Biden has made it clear that after his arrival, America would fight climate change like never before, so hydrogen fits right in. 

The business model of “selling” cars will change

However, with the availability of hydrogen cars, Toyoda talks about one more thing that is important for car dealerships. The head of Toyota says that with the advent of FCV, the sales model will significantly change. And the sales of the Mirai testify to this. The first generation, similar in appearance to the Prius, could only be rented, and while the new upcoming luxury Mirai sedan can also be purchased, the TCO will be incomparably higher than renting.

In addition, Toyota will apply its new business policy in France. There, through its French joint-venture, HysetCo, founded with French gas concern Air Liquide, it wants to get 10,000 Parisian taxi drivers to switch to the new generation of the Mirai. HysetCo approached this through the acquisition of Slota Group, a small Parisian taxi operator with 600 cars, which they will now replace with the FCV. A model in which the carmaker delivers its cars directly to customers would be a double dose of bad news for car dealerships. For the time being, however, FCV sales are focused only in select locations, such as Paris or California, where hydrogen filling stations exist.