Tesla Motors Stubbornly Fights the Future of Green Technology

2013 Tokyo Motor Show-Toyota Fuel Cell Vehicle Concept. Photo: Toyota.

Recently, Tesla Motors (NASDAQ: TSLA  ) CEO Elon Musk expressed, in no uncertain terms, his dislike for hydrogen fuel cell vehicles, or FCVs. And why wouldn't he feel that way? He's the CEO of Tesla, a company that's famous for its battery-electric vehicle, or BEV, the Model S. But is he correct in his opinion? Or was his statement simply an attack against a superior type of green energy?

It's coming
Despite claims that they'll never be viable, FCVs are coming. At this year's Tokyo Motor Show, Toyota Motors (NYSE: TM  ) will unveil its concept FCV. And although it's just a concept, Toyota plans to launch its FCV in 2015. In addition, Daimler's (NASDAQOTH: DDAIF  ) Mercedes-Benz, Ford (NYSE: F  ) , and Renault-Nissan formed a partnership earlier this year with the goal of rolling out production of FCVs in 2017. 

ix35 Fuel Cell. Photo: Hyundai.

Moreover, Hyundai Motor (NASDAQOTH: HYMTF  ) has already developed a production fuel-cell electric vehicle, the iX35, and just delivered its first line-produced ix35 to Copenhagen, Denmark. Plus, Hyundai said it plans to release 1,000 ix35s by 2015, and 10,000 more shortly after 

More pointedly, noted fuel-cell skeptic Steven Chu, a Nobel prize-winning physicist and U.S. secretary of energy between 2009 and 2013, recently stated that hydrogen reforming advances and lower natural gas prices have made a fuel-cell future more likely and less far away, according to the Telegraph.  

The battle heats up
As I've previously stated, BEVs have a number of issues, not the least of which is that they're not really carbon-friendly thanks to their lithium-ion battery. In addition, they're more expensive than internal combustion engine vehicles, or ICEs. They also take a long to charge, and unless you're driving a Model-S -- the least carbon-friendly BEV -- your range is severely limited.  

On the other hand, BEVs are generally better for the environment than most ICE vehicles. They help reduce our dependency on foreign oil, and the price for li-ion batteries has dropped over the years.

FCVs also have a number of issues. The catalyst used in a fuel cell is platinum, which makes it incredibly expensive. Plus, there isn't an existing hydrogen infrastructure.

However, hydrogen is the most abundant element in the universe, and thanks to recent advances, the production of hydrogen is becoming more energy-efficient. In addition, FCVs reduce our dependency on oil, can be refueled in minutes, and have a driving range similar to that of an ICE vehicle. And just as with BEVs, as technology advances, the price of FCVs will drop.

Car manufacturers bet on hydrogen
Perhaps one of the best indicators of the benefits of hydrogen over batteries comes from the auto giants themselves. Tony Whitehorn, Hyundai U.K.'s president and CEO, said hydrogen is the ultimate solution: "Battery electric vehicles are a great technology, but like the fax machine they are only temporary, and there is a great deal of consumer resistance toward them for all manner of reasons, including range and the time it takes to recharge them." 

Professor Thomas Weber, board member for Group Research and Mercedes-Benz Cars Development, told Green Car Reports, "We are convinced that fuel cell vehicles will play a central role for zero-emission mobility in the future." 

And Toyota Chairman Takeshi Uchiyamada considers hybrids like the Prius to simply be a long-term bridge to alternative-fuel vehicles. As reported by Ecomento, he recently said:

We have made big progress in developing a hydrogen fuel cell vehicle. Toyota will be able to offer that, in a sedan, around 2015. A fuel cell vehicle has zero tailpipe emissions just like an electric vehicle. But it does not have issues of driving range and charging time that EVs have.

A fuel cell car refuels at the Renewable Hydrogen Fueling and Production Station on Joint Base Pearl Harbor-Hickam. Photo: U.S. Navy.

Who will win?
Car manufactures have spoken, and they're putting their considerable resources behind FCVs. Will it pay off? I think it will. FCVs have a number of benefits that trump BEVs. As such, while Elon Musk may continue to espouse the problems with hydrogen, the only thing that does is make me worry about the future of Tesla. Is the Model S a great car? Yes. Is it the future of green technology? I doubt it. Consequently, if you're looking for your next great auto stock, I'd consider any of the companies mentioned here that are betting on hydrogen.

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Read/Post Comments (20) | Recommend This Article (8)

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 November 10, 2013, at 11:32 AM, vinipoooh wrote:

    Tesla is not the future of green technology?? you are right. It is far beyond it. Elon is a genius.

  • Report this Comment On November 10, 2013, at 12:13 PM, ashaskevich wrote:

    Again Elon is right, and the rest of the automakers are wrong.

    The cheapest way to produce hydrogen is through natural gas. And how do you get natural gas? Drilling. Is that Eco-friendly?

    Lithium Ion batteries can be recycled. Electricity is produced through various sources, Hydro, nuclear, natural gas, solar etc...

    The other car companies are in bed with the oil industry. Elon Musk is only in bed with Cameron Diaz.

  • Report this Comment On November 10, 2013, at 12:48 PM, speculawyer wrote:

    They are not 'fighting' fuel cells. Just not investing in them because, with good reason, he believes it is not a good avenue. I agree. And so did Nobel prize winning physicist and former Dept of Energy head Steven Chu. There are just too many difficult unsolved problems. Fuel cells are expensive, there is no cheap source of hydrogen, there is no hydrogen distribution infrastructure, etc.

  • Report this Comment On November 10, 2013, at 12:57 PM, drax7 wrote:

    Electricity is the most elegant solution. Elon has the best solution so far. Just buy the stock .

  • Report this Comment On November 10, 2013, at 2:08 PM, clutch1958 wrote:

    Except for the batteries and brakes, this is early 20th century tech. 1915 Baker Electric, anyone?

  • Report this Comment On November 10, 2013, at 2:11 PM, clutch1958 wrote:

    And the batteries are recyclable-so what? What about the fossil fuel that it takes to extract, process, and ship the lithium to the battery plants, and the fuels burned to ship the batteries?

  • Report this Comment On November 10, 2013, at 2:20 PM, Pixma25 wrote:

    Hydrogen fuel based cars? One word: Hindenberg

  • Report this Comment On November 10, 2013, at 2:57 PM, Vw99 wrote:

    There have been 3 accidents with Tesla cars in 5 weeks. Nobody got injured.

    You should see the effect of these accidents on the shares.

    What will happen with the first explosion of an FCV (and believe me, there will be casualties)?

  • Report this Comment On November 10, 2013, at 3:00 PM, highgrowthcarson wrote:

    Please. Read the literature. HFC is basically a scam -- or a brick thrown by the oil industry in the path of the only viable alternative to ICE'a which is electric. Since my last tsla options got trashed at earnings and i now, for the first time this year, hold no position hope the climate deniers push the stock down to 100 or so when it will be time to back up the truck again.

  • Report this Comment On November 10, 2013, at 8:30 PM, skreusz wrote:

    Me too! I am praying that US and other stock purchasers remain as dumb and STEM ignorant as usual . Unless soeone invents an anti gravity car, TSLA will have a bounce back.

  • Report this Comment On November 10, 2013, at 9:23 PM, luckyagain wrote:

    All forms of transport requires energy, whether gasoline, electricity or hydrogen. Making and distributing electricity is not some future technology like making and distributing hydrogen. Admittedly, making hydrogen is doable but that is not exactly a widely done task. As for electricity, well that is available almost everywhere especially in people's house. Most drivers do less than 100 miles driving a day and thus can easily "refuel" at their home overnight. This is easily about 90% to 95% of miles driven by average people. How many hydrogen gas stations are near you?

  • Report this Comment On November 11, 2013, at 9:20 AM, LikeTesla wrote:

    If your article is pertinent why then is the following true?

    According to scientific comparisons of most likely scenario the "Well to Wheel" efficiency of a BEV like Tesla's Model S (pathway is 76% efficient; approximately 79 kWh of energy must be generated in order to deliver 60 kWh of electricity to the wheels of a car) is much better than that of a FCV (The FCV’s ‘well-to-wheel pathway’ believed by experts to be the most likely scenario, due largely to the fact that there are two additional conversion stages relative to the BEV the FCV pathway is only approximately 30% efficient.

    The result is that the pathway requires the production of 202 kWh of electricity at the

    plant, to deliver the necessary 60 kWh to the vehicle or 2.6 times the requirements of the

    BEV pathway).

    Lets not talk about the cost to build out the supporting infrastructure ..., but if were going to switch from unsustainable, expensive, and polluting technology wouldn't it make sense to switch to the best one rather than iteratively spending huge amounts of money to finally get where we need to be?

  • Report this Comment On November 11, 2013, at 11:28 AM, GuitarJim wrote:

    LiON batteries are subject to electrical fires. We've already seen three Tesla cars melt down as a result. Wait until we see the first HFC car explode as a result of a collision or other ignition in the hydrogen tank. Electricity is a hugely inefficient way to power a vehicle. The energy conversion loss is more than 80%. Unless this problem is solved then electricity will never be the long term solution to fossil fuels, regardless of what sort of electricity storage technology we invent. Personally, I like the potential in compressed air. It's simple. The engines work just like ICE's except they don't burn anything - they use the pressurized air to move the pistons. Refueling is fast. Range is reasonable - well over 100 miles. Best of all, the exhaust is only air.

  • Report this Comment On November 11, 2013, at 11:39 AM, LikeTesla wrote:

    Rather than expressing opinion regarding efficiency of Electric powered vehicle why not do some research and discover the truth? You might begin that research with the following comparison which shows your 80% energy conversion loss to be a foolish assertion and also points out the fallacy in this authors article as well. Try reading study by the experts before making www.evuk.co.uk/EAVES_BEV_VS_FCV%20040703.pdf

  • Report this Comment On November 11, 2013, at 11:51 AM, LikeTesla wrote:

    Excerpt from article

    However, the Department Of Energy'’s support for the distribution pipeline of Figure 2 is based on the assumption of using fossil fuels as the source of hydrogen, contrary to our present assumption. In the case of renewable energy, it would be more cost effective to transport the electricity over power lines and perform the electrolysis at local “gas stations”, thus eliminating the need for the expensive and less efficient hydrogen pipeline.

    Elimination of the hydrogen pipeline stage significantly increases the overall efficiency of

    the FCV pathway, however, 188 kWh is still necessary to deliver 60 kWh to the wheels, or 2.4

    times the energy required to power a BEV.

    The inefficiency of the FCV pathway combined with the high capital and maintenance

    costs of the distribution system results in significant differences in the refueling cost

    between a FCV and BEV, particularly if the source is renewable. For example, Pedro and

    Putsche estimate that using wind energy, hydrogen production costs alone will

    amount to $20.76 per tank to drive our FCV 300 miles. This compares to $4.28 “per

    tank” to drive the BEV 300 miles.

    Hmm FCV cost is ~ 5 times the cost to drive BEV 300 miles ..., guess FCV is "The Future of Green Technology" then right? :-) We wouldn't expect a Defense Analyst to use research done by the DOE to support assertions based on whimsical thoughts now would we?

  • Report this Comment On November 11, 2013, at 2:04 PM, jeffhre wrote:

    Fuel cell vehicles are electric vehicles. And it's only when you reach for the hydrogen nozzle to refill them instead of a plug, that their economic advantages are all lost.

    Though advancing fuel cell effectiveness does look like a terrific technology, relying on hydrogen is definitely not, yet.

  • Report this Comment On November 11, 2013, at 2:14 PM, jeffhre wrote:

    "Electricity is a hugely inefficient way to power a vehicle." GuitarJim, a quick question, why is it that internal combustion engines with 22% efficiency are really more efficient than electric motors with about 94% efficient conversion of electricity to propulsion?

    Another. How are millions of mobile engines using only 22% of the energy from gasoline more efficient than a combined heat and power plant that is up to 80% efficient and suffers about 7 - 11% in line losses?

    One more. How can gasoline beat electricity for efficiency when 4 to 6 kWh of energy is needed to refine each gallon of gasoline, even before it is trucked to a gas station and pumped electrically into customers cars?

  • Report this Comment On November 11, 2013, at 3:52 PM, TMFKSpence wrote:

    LikeTesla,

    Thanks for reading. The article you site is from 2003. Luckily for hydrogen, there have been a few advances over the past ten years.

    Another thing to keep in mind is lifetime cycle. Well-to-wheels isn’t an appropriate measure of overall climate impact as it leaves off manufacturing emissions (in the case of BEVs, this is significant). I suggest you read this, which is from Aug 2013: http://assets.climatecentral.org/pdfs/ClimateFriendlyCarsRep...

    Foolish Best,

    TMFKSpence

  • Report this Comment On November 11, 2013, at 5:09 PM, Fooloprunes wrote:

    Both FCVs and BEVs are electric vehicles. The main difference is that,in the case of the FCV, you recharge the "battery" by filling a tank with hydrogen. The hydrogen is no more dangerous than the propane in your gas grill.

    The big advantages of the FCV are the much higher energy density of the hydrogen versus Li-ion batteries, the "recharge" time is not much longer than filling up with gasoline, and the raw materials to make hydrogen are abundant.

    They both consume energy from some other source to either make the hydrogen or charge the battery.

    If reliable fuel cells can be made at a reasonable price, there is no question that FCVs will ultimately win.

    The odd thing is that Musk could easily produce Teslas than used fuel-cells (if suitable fuel cells were available), and they would perform even better than the Li-ion battery versions. He seems to be over-reacting a bit; probably because he's more afraid of the major automobile manufacturers than the actual technology.

  • Report this Comment On November 19, 2013, at 12:28 AM, JulianCox wrote:

    Unacceptable. Hydrogen is simply Natural Gas with the CO2 effectively burned off at the processing plant. Fuel cells are low-performance converters of hydrogen gas to electricity that are far behind now, and thermodynamically incapable of ever competing with existing high power batteries. Anyone who tells you otherwise does not have your best interests at heart, neither as a consumer nor as an investor.

    Musk may be obnoxious on occasion, but he is absolutely correct. Hydrogen fuel cells are the most contemptible BS, serving no other possible purpose besides distraction and harassment by the fossil fuel industry in the green energy and transportation space.

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