2015 Tucson Fuel Cell. Photo credit: Hyundai.

When it comes to fuel cell electric vehicles, or FCEVs, two of the main barriers to widespread adoption are cost and the lack of a hydrogen-fueling infrastructure. However, recent advances could help solve these problems. For Toyota Motor (NYSE:TM), Hyundai Motor (OTC:HYMTF), and Honda Motor (NYSE:HMC), this is great news.

Reduced platinum
One of the biggest drivers of cost when it comes to FCEVs is the platinum catalyst in fuel cells. The good news is that, since 2005, the amount of platinum needed in fuel cells has dropped 80%. However, that's not enough for scientists at NREL, so they're working to make "ultra-thin platinum films limited to a few atomic layers." The reason, according to NREL, is that if the use of platinum is decreased by two-thirds, "hydrogen fuel cells could reach precious metal loadings on parity with catalytic converters in today's internal-combustion engines." 

The above is important because currently catalytic converters are mandatory for pollution control in internal combustion engine, or ICE, vehicles. However, the emissions from an FCEV are heat and water. Consequently, a catalytic converter isn't necessary for FCEVs, which means the amount of platinum used in future FCEVs would be the same as that of today's ICE vehicles that utilize platinum.

Moreover, while reducing the use of platinum is one way to reduce the cost of FCEVs, another way is to remove the use of platinum, altogether. As I recently wrote, Argonne National Laboratory is currently working on a polymer electrolyte fuel cell, or PEFC, which replaces the platinum cathode with a cheaper catalyst. If successful, this would reduce the cost of the cathode electrocatalyst by 60%. 

Tri-generation fuel cell and hydrogen energy station

Hydrogen fueling station and fuel cell vehicle, Shell Hydrogen. Photo credit: Michael Penev for NREL.

In 2011, FuelCell Energy (NASDAQ:FCEL), along with the Energy Department and a number of other agencies, opened the world's first tri-generation fuel cell and hydrogen energy station in Fountain Valley, Cali. What this station does is convert renewable biogas from a nearby wastewater treatment plant into hydrogen for vehicle fueling. Additionally, the installation produces electricity and heat, which is then used to power and warm the facility, according to the Energy Department. Even better? All of this is accomplished onsite, eliminating the need to transport hydrogen to the fueling station.

More importantly, on March 7, FuelCell Energy announced that the U.S. Department of Energy granted FuelCell Energy a $2.8 million continuation award, which will be used to further demonstrate its tri-gen system technology.

Of course, FuelCell Energy isn't the only company producing onsite hydrogen systems. HyperSolar, along with the University of California at Santa Barbara, is working on a self-contained photoelectrochemical nanosystem, which produces renewable hydrogen using sunlight and any source of water -- even wastewater. The company already has a working prototype, and said that in the process of creating its nanotechnology it developed a commercial hydrogen-extraction solution called the H2Generator, which is a stand-alone, self-contained solar hydrogen generator that HyperSolar says "is intended to be installed almost anywhere to produce hydrogen fuel for local use." 

Why bet on hydrogen?

Toyota FCV concept. Photo credit: Mytho88 via Wikimedia Commons.

When it comes to the future of green transportation, FCEVs have a number of things going for them. Hydrogen's energy density is about seven times higher than that of lithium-ion batteries, according to Toyota's alternative fuel comparison chart. FCEVs can be refueled in minutes and have a driving range similar to an ICE vehicle, and the costs of both fuel cells and hydrogen fuel have fallen significantly. According to the Energy Department, fuel cells for vehicles have fallen to $55 a kilowatt, and the projected cost of gasoline-gallon equivalent is less than $4 after adding costs to deliver and distribute. 

More importantly, auto manufactures are betting big on hydrogen. In California this spring, Hyundai will begin leasing its Hyundai Tucson Fuel Cell vehicle for $2,999 down and $499 a month -- and that includes unlimited free hydrogen refueling. Plus, both Toyota and Honda are planning on launching their fuel cell vehicles in 2015. 

Consequently, while there are currently still barriers to overcome when it comes to widespread FCEV adoption, those barriers are becoming smaller by the day. As such, if you're looking to invest in the future of FCEVs, I'd take a closer look at the above auto companies betting on hydrogen.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.