GM and Honda Team up to Tackle Tesla

Tesla's hot Model S has no green-friendly rivals yet, but it's a safe bet that they're coming. Photo credit: Tesla Motors.

Plenty of investors feel that Tesla Motors' (NASDAQ: TSLA  ) battery-electric Model S sedan represents the future of automobiles. They may yet be proven right, but the truth is that battery-powered cars represent just one of several ways forward.

This week, giants General Motors (NYSE: GM  ) and Honda (NYSE: HMC  ) announced a big bet on another path: hydrogen fuel cells. In this video, Motley Fool contributor John Rosevear looks at the new alliance and at the challenges facing fuel-cell technology – and at whether it's time for Tesla to start worrying.

If you're on the lookout for some currently intriguing energy plays, check out The Motley Fool's "3 Stocks for $100 Oil." For FREE access to this special report, simply click here now.

Read/Post Comments (15) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 08, 2013, at 6:33 PM, colleran wrote:

    I have been following fuel cell technology for a few years now, including investing in more than one company that is no longer in business. If I were a Tesla investor this would be the last thing I would worry about. The big issue is not with the fuel cell itself, although they are quite expensive, but how do you extract hydrogen from water or whatever to use as a fuel. It now takes more energy to extract hydrogen from water than the energy in the hydrogen. Fuel cells to me are like cold fusion. Maybe one day.

  • Report this Comment On July 08, 2013, at 7:06 PM, jamesdan567 wrote:

    Pursuing a hydrogen fuel cell strategy simply confirms the amazing stupidity of GM and Honda. Making hydrogen from water with electricity, compressing it, storing it, transporting it, then converting it back into electricity again to power a vehicle is far more expensive and far less efficient than generating electricity and charging a battery that powers a vehicle (As Tesla does). Fuel cell vehicles are a failure before they even get to the design phase.

  • Report this Comment On July 08, 2013, at 8:18 PM, fastpanda wrote:

    say what you will about hydrogen being inefficient blah blah but fuel cell is the only technology currently available that not only keeps big oil involved in the retailing of automotive energy in the future, but does so in such a way where the average motorist's lifestyle doesn't change from today. when you run out of 'fuel', you roll up to a shell or chevron, pump fuel, get your diet coke and slim jim at the convenience store and then go on your merry way with another 200-300 miles of range. rechargeable battery electric plug in don't allow this. most drivers today will not accept "gee honey, we have to plug in the car for 17 hours so we can't go out to dinner tonight." And who's going to build this plug in recharge infrastructure if not existing oil companies/retailers? the bottom line is, we need zero emission cars and the most realistic way to get as many americans to embrace this is through hydrogen fuel cell, not plug-in battery electric. hybrids and battery electrics are all stepping stones towards the revolution, which will be hydrogen fuel cell.

  • Report this Comment On July 08, 2013, at 8:43 PM, matthewluke wrote:


    Not every technology is suitable for every use. If I'm a taxi driver for example, I don't have time to wait for my battery to charge. I need to be back on the roads as quickly as possible.

    Using an electric car to go from your house to work and maybe around the town to do some errands, no issues there. A single daily charge is likely more than enough. But for fleet vehicles (taxis, buses, delivery trucks, etc.) hydrogen seems generally more practical than battery vehicles. (As does natural gas.)

    Electric vehicles are best in some cases and other technologies are best in other cases. It does not have to be a single-technology-only future. It can be a little of this and a little of that.

  • Report this Comment On July 08, 2013, at 8:49 PM, TrojanFilm wrote:

    Fastpanda, I feel like you're a bit off in your grasp of the industry, particularly Tesla.

    For one, your main argument against electric cars is that they don't rely on a century old distribution system that hasn't changed and gouges the consumer (Exxon made nearly 45B in profit last year) And you argue that the electric car can't compete because there's nobody else to provide charging, and it takes "17 hours" to charge. But the case with Tesla is that they're building their own modern, self-sustaining, free to the consumer network of charging stations that can give you 200 miles in 20-30 minutes, or if you'd prefer, you can now swap out your battery in 90 seconds for a new one with the full 240miles of range.

    As for fuel cells, they certainly are more complicated and expensive than batteries, however, the only potential they have for being superior to electric is if one (or several) of these new algae methods can produce hydrogen gas cheaply and efficiently. In that case, the environmental benefits of having only water emissions and the efficiency of an electric motor will make it a strong green option, but by that point it will most likely still be too expensive. Perhaps however, Exxon, Shell, Chevron, etc will help create the cars as it will ensure their infrastructures are still needed in the future.

    Even so, there's still really no threat from this to Tesla as they're already several years ahead of this new effort and have a much more logical approach.

  • Report this Comment On July 08, 2013, at 8:54 PM, bobbbo5 wrote:

    Gasoline or Hydrogen to fuel in an internal combustion engine are only about 30% efficient, whereas Electric powered vehicles are about 90% efficient. So since electricity will be the source of energy to create both Hydrogen and a charge in an electric car's battery, electric cars come way out ahead for the same Kilowatt Hours of electric energy.

    In addition to that Electric cars have far fewer parts and much lower maintenance. So Electric cars win again.

    And finally how many of us travel 300 miles a day to work and back. At an average speed of 50MPH that would be 6 hours a day traveling! Everyone is hung up on taking long trips when few actually do.

  • Report this Comment On July 08, 2013, at 11:28 PM, Connelky wrote:

    If these guys want to derail tesla, they better come up with something better than hydrogen in 2020.

    There is some really exciting battery tech that is coming down the pipe that will likely arrive before then.

    I have to admit, with that price and the conditions, musk's battery swap is pretty lame, but even as it is, it makes more sense than hydrogen. Hydrogen fuel cells have huge energy losses that will never go away, it is constrained by physics, it sucks and it will always suck. All you can do to sell fuel cells is make a really good sales pitch for convenience.

    My bet though is that none of these companies are seriously interested in hydrogen, i think they are just trying to attract attention for their other models.

  • Report this Comment On July 09, 2013, at 12:11 AM, matthewluke wrote:


    The technology GM and Honda are collaborate together with is fuel cell electric vehicles, not hydrogen internal combustion engine vehicle. So their cars ARE an electric cars (with an electric motor). They just don't have an electric batteries to power the electric motors. Therefore they have the same few moving parts and low maintenance advantage as battery electric vehicles. The only real disadvantage FCEVs have compared to BEVs is that hydrogen is less efficient than just storing electricity in a battery. Although it does have the advantage of a quick fuel-up time, which is good for FCEV buses and other types of all-day use vehicles.

  • Report this Comment On July 09, 2013, at 12:21 AM, cmoreride wrote:

    Natural Gas Fuel Cell Car

    Ceramic fuel cells that can make electricity from natural gas at 60% efficiency.

    ANG: Adsorption stores natural gas at low (500 psi) pressure in compact tanks.

    A glut of cheap natural gas caused by new shale drilling/extraction techniques.

    The fuel cell breakthrough is particularly important because it means a car can generate its own electricity more efficiently than a massive power plant! Big plants typically average 30% efficiency, so a 60% NG fuel cell hybrid is twice as efficient as an electric vehicle charged from the grid. That means half as much fuel is consumed.

    As far as EV Automobile

    Battery charging time issue is going away soon.

    Battery swap outs and fluid recharge will be comparable to

  • Report this Comment On July 09, 2013, at 1:39 AM, AlaaSadek wrote:

    Hydrogen is the smallest atom we know. No matter what you do it will leak. BMW says do NOT park it indoors, now what does this say?

  • Report this Comment On July 09, 2013, at 2:41 AM, tAVMAN223 wrote:

    GM is so idiotic is not even funny. They had the best electric car the EV1 that had the power like the Tesla. Just like all the revolutionary cars they make. They kill it by their marketing strategy!!!

  • Report this Comment On July 09, 2013, at 3:12 AM, xm25cdte wrote:

    Honda came out with a fuel cell vehicle already and it was not successful. On 15 November 2007 at the Greater Los Angeles Auto Show, Honda unveiled the FCX Clarity, the first production model, and announced that the car would be available for lease beginning in the summer 2008.

    There are more EV charge stations than there are fuel cell refueling stations.

  • Report this Comment On July 09, 2013, at 11:28 AM, SkepikI wrote:

    To those who have not worked with it or been round it very long Hydrogen looks very safe and attractive. Hydrogen is one of only two gases that can DETONATE. It has a very wide explosive and flammable range (just 7% in air is flammable). It burns with a COLORLESS flame- ie you cant see it.

    Just imagine a bunch of nimrods on the highway driving well, their very own IED's.

    That said, the very efficient use of Natural Gas or Hydrocarbon fuel to generate Hydrogen on board with little storage before it goes direct to a fuel cell should drive significant mileage gains with reasonable safety. Hydrogen fueling stations from Algae or other sources? Ridiculous....we cant even site LNG terminals which are far less flammable and cannot detonate (technical term) unlike Hydrogen.

    Electrics certainly have a future. Limited right now by infrastructure and range. Given past performance, I have a hard time believing GM and Honda will lead the pack.

    And John, a transcript with the video would be nice. I refuse to watch embedded videos.

    I am also waiting for your cogent analysis of how bad it looks for US to recover our bailout money on the sale of GM stock....

  • Report this Comment On July 10, 2013, at 10:15 AM, TMFMarlowe wrote:

    @Skepikl: We aren't set up to do transcripts right now, unfortunately. Why don't you like embedded videos? You can watch it on the Fool's channel over on YouTube if you prefer.

    As for my analysis on the recovery of the bailout loan to GM, I've written several articles on what has been paid, what is still owed, and what the shortfall is likely to be once Treasury has sold the last of their GM stock. But maybe it's time for another one -- I'll do that once Treasury releases this month's updated numbers on the selloff, probably next week.

    But what I can't predict is what (if anything) GM's current management will choose to do to make up the shortfall. Your guess is as good as mine on that front.

    John Rosevear

  • Report this Comment On July 10, 2013, at 3:25 PM, SkepikI wrote:

    John: It is indeed time for another, as I for one have lost track of what's left in Treasury's locker. This would be a service to me and your readers, and I believe a regular say every six months or 3 months is essential to GM investors and really other Auto Investors (I am long F myself) understanding a critical part of the situation at GM. The overhang "threatening to be sold" will tend to depress the price and investors need to know where it stands. I don't know anyone else doing this besides yourself.

    As for the videos, I read MUCH faster than the videos run so I get impatient with them. And, being a paranoid, downloading video streams makes me nervous, so I just tend to avoid them. Lastly, not so much yours, but I have found many of the MF videos to be well, inane, for want of a better word and transcripts in the body allows me to skim and skip those I find less than informative saving untold hours 3 or 4 min at a time. I notice Morgan H. tends to (not always) provide transcripts in the body of the story, which I always appreciate.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2525797, ~/Articles/ArticleHandler.aspx, 9/29/2016 6:16:55 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 8 hours ago Sponsored by:
DOW 18,339.24 110.94 0.61%
S&P 500 2,171.37 11.44 0.53%
NASD 5,318.55 12.84 0.24%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 4:00 PM
TSLA $206.27 Up +0.46 +0.22%
Tesla Motors CAPS Rating: **
GM $31.90 Up +0.30 +0.95%
General Motors CAPS Rating: ***
HMC $29.17 Up +0.12 +0.41%
Honda Motor CAPS Rating: ****
TM $117.63 Down -0.69 -0.58%
Toyota Motor CAPS Rating: ***