State funding for hybrid dreams Print E-mail
October 2009 Business

German automakers are hoping to change gear with the production of fuel cell-powered electric cars - By Ulrich Hottelet

For a long time, German automakers were asleep at the wheel when it came to developing alternative propulsion technologies. While Japanese competitor Toyota successfully established its Prius hybrid model, a combination of combustion engine and electric motor, a succession of German prototypes never made it to the market.

Finally. Just before the start of the Frankfurt Motor Show, representatives of leading German and European industrial corporations signed a memorandum of understanding in Berlin, in the presence of the German Minister for Transport Wolfgang Tiefensee.

"Germany is setting the pace when it comes to hydrogen and fuel cell technology," said Tiefensee describing the H2 Mobility initiative. "We are aiming to establish a nation-wide hydrogen supply in Germany by 2015 to support the serial production of fuel cell vehicles." The partners are Daimler, EnBW, the Linde Group, OMV, Shell, Total, Vattenfall and the National Organization for Hydrogen and Fuel Cell Technology (NOW GmbH). The German government has also provided funding. "With this memorandum, we are cutting the Gordian Knot of an inadequate network of hydrogen fuel stations," Daimler Chairman Dieter Zetsche said.

From the perspective of the H2 Mobility partners, ongoing demonstration projects like the Clean Energy Partnership (CEP), in which the oil industry, utility companies, as well as the natural gas and automotive industries also participate, have already demonstrated that the production, storage, transportation and use of compressed gaseous hydrogen, as well as the creation of the necessary infrastructure, are technologically feasible.

As part of the CEP, 40 hydrogen vehicles are in operation in Berlin and Hamburg. Of the currently just under 30 hydrogen fuel stations in Germany, seven are integrated into the operation of public gas stations.

The next expansion phase will be connecting the existing urban centers through corridors along the highways. "We are planning to build 1,000 hydrogen fuel stations for ?1.5 to ?2 billion," said Wolfgang Reitzle, president and CEO of the Linde Group, an international industrial gases and engineering company.

Shortly before the signing, Ford, General Motors, Honda, Hyundai, Kia, Renault, Nissan and Toyota had already announced a joint memorandum of understanding regarding the development and market introduction of electric cars with fuel cells. They are estimating several hundreds of thousands of such vehicles worldwide by 2015.

The advantage of fuel-cell cars is that they are emissions free. The hydrogen can be produced using renewable energy sources like solar power. Using the fuel cell, the hydrogen generates electricity, which powers the motor.

It is still unclear how expensive it will be in the future to fill up with hydrogen. Zetsche, who arrived for the press conference in a fuel-cell car accompanied by Tiefensee, said he had filled his tank for ?32.50.

With more than 100 test vehicles, including cars and buses, and more than 4.5 million kilometers driven, Daimler has one of the largest fleets of fuel-cell vehicles worldwide. A small production run of the Mercedes-Benz B-class F-CELL with around 200 units started in late 2009.

The first prototype of the new generation of fuel-cell buses will also be presented this year. With larger vehicles, hybrid is the key technology, according to Daimler head of research Thomas Weber. "With smaller cars, it is electric," he said.

The U.S. government, on the other hand, apparently does not see a future for fuel cell propulsion technology. In July, Energy Secretary Steven Chu announced that he wanted to drastically curtail funding for development in the sector. 

But the electric alternative to fuel cells, the battery-powered engine, still has many technological hurdles to overcome before it can make a market breakthrough. They include battery technology, range, price, and the infrastructure for recharging the batteries.

That means combustion engines will continue to play a dominant role for the next 15 to 20 years, according to Ulrich Hackenberg, a Volkswagen board member, speaking at an event in Frankfurt attended by the heads of development of the German carmakers. According to a VW projection, battery-powered electric cars will only reach a market share of 1.5 percent by the year 2020.

Volkswagen wants to introduce their first electric vehicle to the market in 2013. Bernd Bohr, the head of the automotive division at component supplier Bosch, said that the cost of the battery would still have to be reduced to a third. A battery for a range of around 200 kilometers currently costs ?8,000 to ?12,000.

In the meantime, a race is developing between carmakers and suppliers for technological leadership in the area of environmentally friendly engines. While the suppliers are developing components for electric drives, many manufacturers focus on in-house solutions.

The high research and development costs pose financial risks for both sides. Whether or not the suppliers profit more will depend on how quickly uniform standards will establish themselves. If carmakers are using many of the same components, the suppliers will have an advantage over the carmakers because they can produce large quantities for several clients at the same time.

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