What Does This Fuel Cell Deal Spell for the Electric Car -- Especially Tesla?

Earlier this week Daimler, Ford (NYSE: F  ) , and Nissan forged a venture to bring fuel cell vehicles into the mainstream within four years .

Fuel cells generate electricity in a fuel stack where hydrogen, which is stored usually in a high-pressure tank, reacts with oxygen from the atmosphere. The good news is that the only emissions from a fuel cell are water vapor and heat .

Of course, producing hydrogen can contribute to pollutants and greenhouse gas emissions, but much less than what's spewed out from fossil fuel-powered vehicles, and even less than what's emitted during the production of electricity for electric-powered vehicles.

According to the U.S. Department of Energy, gasoline-powered vehicles today emit 450 grams of CO2-equivalent per mile, electricity production for use in battery electric vehicles puts out 230 grams, and hydrogen for fuel cell electric vehicles produced using natural gas emits 200 grams.

A major downside to fuel cell vehicles has been in how to store the hydrogen onboard. The most cost-effective method has been to store it as a gas under high pressure, but those tanks are large and heavy. It can also be stored as a liquid at minus 423 degrees F. Since the liquid is denser than gas, the tank can be smaller, but there are complications keeping a gas at such low temperatures. The long-term solution may involve storing the hydrogen in a solid form.

Batteries included ... for a price
If the above three giants of the automotive industry can indeed put their heads, and their wallets, together, and come up with an affordable fuel cell system, it could provide the solution to the biggest problem plaguing the electric car today -- the battery.

As an example, let's use what is perhaps the highest profile plug-in electric vehicle on the road, Tesla's (NASDAQ: TSLA  ) Model S sedan. It has the looks and performance of a luxury sedan. The company touts the car's neck snapping acceleration, which can slam it from zero-to-60 mph in 4.4 seconds – and that's in spite of the Model S weighing over 4,600 pounds .

That poundage comes from the battery. A comparably sized gasoline-powered Jaguar XJ sedan weighs almost 800 pounds less than a Model S . If the Tesla's electric motor were powered by a fuel cell weighing much less than that battery, it would be scary to think of the performance.

And then there's the cost of batteries. Last year, Tesla was charging $40,000 to replace the 53-k-Wh battery pack in its Roadster model . However, the company has come up with a cheaper range of replacement prices for the Model S batteries: $12,000 for the 85-k-Wh, $10,000 for the 60-k-Wh, and $8,000 for the 40-k-Wh .

If that seems like a relative bargain, check out the small print. To get those replacement batteries at those prices, the Model S buyer must pay for them within the first 90 days of ownership, and won't be eligible to obtain them until after the eighth year of ownership .

I don't even want to think about how much gasoline would have to cost at the pump before a Tesla saves one any money in fuel costs.

High anxiety
But the biggest downside to the battery-powered vehicle has to be range anxiety. That neuroses hasn't yet been added to the Diagnostic and Statistical Manual of Mental Disorders, but just give it time.

What would one do when that e-meter gets closer to empty? There aren't yet enough vehicle recharging stations scattered about – and even if there were, charging a battery takes quite a bit longer than filling up a gas tank or, in the case of a fuel cell powered electric car, a hydrogen tank.

Again, as an example, the Tesla: In spite of its sleek beauty, the very quickest a Model S can be charged is at the rate of 300 miles of range per hour of charge, or 30 minutes for charging half the battery. But that's only for the more expensive specially-equipped models, and then only at so-called supercharger stations located along major interstates . Charging at home, or wherever else there's an available AC outlet, would take one hour per 62 miles of charge, or one hour per 31 miles of charge, depending on the voltage.

To be fair, hydrogen-refueling stations aren't a common sight either, but at least if one could be found, thumb twiddling could be kept to a minimum.

Unexpected consequences
One interesting aspect of the fuel cell partnership could have a direct effect on the above-mentioned Tesla.

Daimler, back in 2009, bought a nearly 10% equity stake in the company . At that time, Tesla was working with Daimler in the development of an electric version of Daimler's smart car. Since then, the deal has grown to include Tesla building the powertrain for an electric Mercedes-Benz .

The question then arises, is Daimler planning on abandoning the development of battery-electric vehicles if and when the fuel cell option becomes viable? If so, could that mean Daimler dropping out of its partnership with Tesla, and becoming an electric luxury car rival with a more practical power alternative? Or could it mean an even deeper involvement with Tesla, as Daimler provides its fuel cell system to power future Tesla models?

Or is the battery industry the only thing at risk?

Near-faultless execution has led Tesla Motors to the brink of success, but the road ahead remains a hard one. Despite progress, a looming question remains: Will Tesla be able to fend off its big-name competitors? The Motley Fool answers this question and more in our most in-depth Tesla research available for smart investors like you. Thousands have already claimed their own premium ticker coverage, and you can gain instant access to your own by clicking here now.


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  • Report this Comment On February 01, 2013, at 7:44 PM, Caroll56 wrote:

    With the current cost of liquid Hydrogen I'm not too concerned that the fuel cell vehicle will be a threat to the EV any time soon.

    Given the amount of energy it takes to product Hydrogen it would take much cheaper energy to make it practical and then the cost to charge the battery in an Electric car would also get that much cheaper.

    Ford still isn’t making the Focus EV available to very many markets and claiming there is not demand.

    (I can’t buy one in the Twin Cities) Sounds like they just want to kill the EV again and push something on the public that needs to go to filling stations.

    See also the latest battery developed by Washington State College.

  • Report this Comment On February 01, 2013, at 8:04 PM, SkepikI wrote:

    Then there is the safety issue. Most people have not been around Hydrogen much. I have. There are only TWO gases that can detonate one is Hydrogen, the other Propane. The word "Explosion" is thrown about rather loosely and does not begin to describe the results of a Hydrogen detonation (actually a technical term). The LOWER explosive limit is something near 7% Hydrogen in air as I recall.... not very much and it ranges quite high. If you think the Battery Fire risks for 787s and early electric cars was worth worrying about, you just wait till there is a Hydrogen detonation in a car... And people get scared of Gasoline Tanker "explosions"..fires really, a Hydrogen Tank detonation will make that look like a campfire.

  • Report this Comment On February 01, 2013, at 9:36 PM, acbytesla wrote:

    Overall, the article is good, but I think Dan leaves out some salient details..

    1. There is no way that Fuel Cell cars will be mainstream in 4 years. In fact, it is more likely to be 15 years plus for this to happen.

    2. Tesla is in the electric car business, not the battery car business. It just so happens that it's vehicles get their electricity from batteries.

    As noted, Tesla is building an electric motor drive train for Daimler. There expertise is in the drive train and how they combine multiple batteries together for charging and drawing electricity for the motors. They are building on this expertise and that should be marketable to other car manufacturers in the future.

    Hydrogen fuel cells are what is most often discussed but I think it is far more likely that if fuel cell cars are part of our near future, the fuel cells will catalyze natural gas as opposed to hydrogen.

    It will be far easier to create a distribution system for natural gas than hydrogen. You would be able to fill up at home as well as on the road as people already do using internal combustion vehicles retrofitted to run on natural gas.

  • Report this Comment On February 02, 2013, at 2:03 AM, BobWallace wrote:

    We're "x" years from an EV with a 200 mile range and <20 minute 90% recharge ability. A 200 mile range would let you drive all day long (>500 miles) with only two modest stops. (Gotta eat and pee.)

    When we cross that threshold EVs will be practical personal transportation for just about everyone. Increasing manufacturing volume will reduce purchase prices.

    X is probably less than five years.

    That's roughly the period in which hydrogen fuel cell cars may come to market.

    Let's say they both show up at about the same time and at about the same price point. That happens and the buying decision will likely be made on operating cost.

    Right now it takes about 40% more electricity to crack water into hydrogen for a FCEV than to drive an EV the same distance. $1.40 vs $1.

    Then we would need to build generation, storage and distribution infrastructure for hydrogen. Think replacing all our oil refineries, tanker trucks and gas station tanks/pumps. That will take a massive capital investment. There will be ongoing labor and operating costs. Those costs will be added to the $1.40.

    The infrastructure for EVs is more than 90% in place. 60% of all American drivers already have a place to plug in at night. The other 40% just need an outlet. We're already installing rapid recharge stations along our major travel routes. There will be hundreds in place five years from now.

    The only way that FCEVs can shove EVs aside is if they can be manufactured for significantly less. They're going to cost more per mile to drive.

  • Report this Comment On February 02, 2013, at 7:48 PM, Dynamiccharger wrote:

    The first U.S. electric railway was started in 1879, today over 40% of U.S. railway transportation is used for shipping coal. Also today Mr. Gates and Mr. Buffet are heavily investing in railroads. For over 130 years third rail and catenary electricfication systems have been proven, reliable methods of providing traction power to trains, buses, trams and subways.

    Extending these proven traction power systems to power trucks and cars as well is currently being developed by companies like Bombardier's Primove dynamic rapid charging systems. Manufacturing developments of light weight, safer, and relatively inexpensive magnesium/sulphur batteries by companies like Posco means the weight of an electric vehicle's battery pack is reduced. Lighter batteries combined with dynamic rapid charging results in a vehicular power traction systems being reduced in almost 85% overall weight for example a a standard transit bus would require 200 kw of dynamic charging. 

    In 1994 Energy Research Corporation (ERC) concluded their electric battery vehicle studies with General Motors, upon which ERC divested their battery operations to concentrate solely on their continuing parallel development of fuel cells re-naming their company FueCell Energy (FCE). Whilst others have been busy trying to re-invent the horseless carriage with last Century's technology FCE has been steadily proving that their non precious metals fuel cells operating with multi-fuels dristributed electric power generators are a perfect fit with dynamic charging systems where as a 300 kw Direct Fuel Cell stationed every few blocks apart would be able to provide up to 200 kw of dynamic charging when required, or multiple charging points for e-vehicles including e-bikes, especially in places like London England that have by-laws requiring charging points. Larger multi-megawatt fuel cells stationed along  third rail or catenary rail lines providing DC traction power to trains when required and AC grid power when a rail line load is not required, are becoming more commonplace with distributed fuel cell systems currently being deployed in England, Germany, Switzerland, and South Korea. 

    So what's next? I would speculate that Gates and Buffet will be purchashing fuel cells that use coal as a fuel to electrify their coal trains in the very near future.

  • Report this Comment On February 03, 2013, at 8:29 PM, Cmorganson wrote:

    I'm reading this article while charging my Tesla Model S in Barstow (driving from Vegas to LA). I don't have much time to comment because after eating at Subway I'm already charged (30-minutes).

    The one comment I have time to make is regarding the CO-2 emission statistics stated. It's important to note that the per-mile emissions represented (stemming from creating electricity to charge EVs) is "estimated" based upon "today's" power plant ratio of dirty/clean energy production methods. That fact is, as we clean up these power plants, which is happening, the represented per-mile CO2 emissions related to charging EVs continues to go down.

    Gotta run...I'm charged!

  • Report this Comment On February 03, 2013, at 9:15 PM, XMFDRadovsky wrote:

    I would like to make a correction to my article.

    I stated: "Charging at home, or wherever else there's an available AC outlet, would take one hour per 62 miles of charge, or one hour per 31 miles of charge, depending on the voltage."

    Actually, I overstated the speed at which which home charging would take place.

    If charging a Model S from a 240V/40 A outlet, charging time is one hour per 31 miles of charge.

    If charging from a standard 110V/12A outlet, it would take one hour per 5 miles of charge.

    That 62 miles per one of charge is obtained by using a High Power Wall Connector hooked up to a 240 volt circuit.

    This information is from the Tesla website:

    http://www.teslamotors.com/charging#/highpower

    Dan

  • Report this Comment On February 03, 2013, at 9:33 PM, Nortonbill wrote:

    Let's see, I'm in the Midwest, it's 10 below, gota run the heater, lights, seat heater and I want the tunes cranked. Now just how far will that electric car go. Gee, no one talks about that, besides I can't justify the extra cost, numbers don't add up even with the rebates and I really don't want to look like a greeny greek, but I'd like to drink the cool aid.

    How about getting caught in a flood. Will they be like throwing a hair dryer in the bath tub? If now why not?

    Lets think practical and small. Remember lasting changes come slowly. I wouldn't even consider a plug in drill or saw, so battery technology must be getting better. Why not use it for other portable power tools, leaf blowers, trimmers, they are available but the Gas powered ones are still way far more plentiful. Why not pass legislation to eliminate gas power tools, today! now think about lawn mowers, big market there, lots of pollution too and I think a battery/electric plug in would cost about the same as a gas equivalent. How about Lawn tractors, now you are getting very close to cars without range anxiety. Again with the drive systems required for mower decks and drives the electric/battery equivalent might be cheaper. Look too at the research that would be funded at a profit. Lastly, look at the questions personal experience would teach us.

  • Report this Comment On February 04, 2013, at 12:37 AM, AjitC wrote:

    New generation of batteries for the Telsa may have double the capacity within 2 years. With reduced weight, both for the battery and the car, a smaller amount of electricity may be needed. Charging times may be cut to 15-30 minutes.

    Except for the battery, the Tesla car designs are simple. The electric motor, fixed gear, inverter are simple compared to ICE and cheap.

    With time the cost of the Telsa cars will be cut in nearly half.

  • Report this Comment On February 04, 2013, at 7:18 AM, JPWhiteHome wrote:

    Hydrogen Fuel cell vehicles will be complementary not competitive to BEV's. For most daily activities, the efficiency of the BEV cannot be beat.

    BEV's suffer from limited range, therefore there are opportunities for Hydrogen Fuel cells to replace gas/diesel engines as range extenders, or for special applications such as towing where BEV's can't compete.

  • Report this Comment On February 05, 2013, at 10:30 AM, joegremlin wrote:

    The first problem with hydrogen is there are no hydrogen wells, if we were building nuke plants then the hydrogen economy would be a good idea, but burning natural gas to make electricity to make hydrogen is silly.

    hydrogen is really hard to deal with, it is a small molecule and wants to escape.

    the author also glosses over fuel costs, but I spend $50/week * 52 = $2600 per year. the battery cost is a wash at current prices.

  • Report this Comment On February 06, 2013, at 9:09 AM, 2ndGreenRevBlog wrote:

    @SkepikI: You raise some good points regarding safety of hydrogen fuel,which I'll elaborate on. However, hydrogen presents some benefits over gasoline as well.

    Additional downsides: hydrogen fires aren't as visible in daylight; hydrogen is more susceptible to leaks since it has very small mass; by weight, hydrogen is much more efficient than gasoline, but not by volume--this would necessitate large tanks.

    Benefits: since hydrogen is very light compared to air, fires will be vertical and won't spread out like gasoline (though this would be a huge downside if the tanks are located under the seats!); hydrogen burns very quickly, so fires would flame out faster than gasoline; when contained, hydrogen is much less likely than other fuels to ignite due to heat; propane, which you mention is similar to hydrogen in many respects, is used in grilling all the time without incident. Even in the transportation sector, I would expect hydrogen to be very safe. Do you know of any incidents?

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