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Why Is the Auto Industry Spending Billions on Hydrogen-Powered Wishful Thinking?

honda clarity

Everyday, it seems, we hear about another electric vehicle start-up with plans to revolutionize the auto industry. And with companies like Coulomb Technologies and Better Place slowly expanding their networks of EV charging and battery-swapping stations, it looks like EV technology is here to stay. So why are Daimler, Ford, GM, Honda, Hyundai, Kia, Renault-Nissan, and Toyota working so hard to bring hydrogen-powered cars to market?

The eight companies announced yesterday that they will have hydrogen-powered vehicles ready for production at a cost-competitive level by 2015, at which point hundreds of thousands of fuel cell-equipped cars will be unleashed onto an unsuspecting public.

But this seems overly ambitious. US Energy Secretary Steven Chu threatened in July to cut hydrogen fuel cell funding because cars powered by the technology will require an extensive network of fueling stations. So will electric cars, but PHEV and EV technology is already much more affordable than fuel cell technology—meaning that it makes sense for start-ups to start building an EV infrastructure now.

And yet the car companies persist. Daimler in particular has spent $2 billion on fuel cell technology, and the company plans to spend $700 million more by 2011. And for what? Carmakers still don't know how to safely transport hydrogen for long distances, how to go about building a fuel station infrastructure, or even, for that matter, how to make hydrogen-powered cars affordable.

The only reason automakers could be so gung-ho about hydrogen is that they have some sort of fear that electric cars won't take off like they hope. That seems unlikely—too many established car companies, start-ups, lithium-ion battery manufacturers and infrastructure planners are already hard at work. Hydrogen may be a fine back-up plan, but can car companies really afford to throw billions at a technology that many predict is decades away from being viable? We don't have that kind of time to wean ourselves off gasoline, and Daimler, Ford, GM, et al know it.