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Honda Has a New Hydrogen Car -- But Who Will Buy It?

By John Rosevear - Sep 30, 2015 at 4:05PM

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Honda said that it will show a prototype of a new hydrogen fuel-cell car at the Tokyo Motor Show in October. It intends to put the car into production next year. But with battery-electrics getting better and cheaper all the time, who will buy a fuel-cell Honda?

The Honda FCV is a prototype of a new fuel-cell car that Honda intends to put into production next year. Image source: Honda

Honda (HMC 1.39%) said on Wednesday that it will unveil a new hydrogen-powered car at the Tokyo Motor Show in October.

The car, which Honda has tentatively named "FCV" (for "fuel cell vehicle"), is a prototype of a new sedan that Honda intends to start producing next year.

Honda has dabbled with cars powered by hydrogen fuel cells for years. It launched its first fuel-cell-powered vehicle way back in 2002. But past fuel-cell Hondas have been produced in tiny numbers largely as research efforts.

This effort looks much more serious. Does Honda think that fuel cells have a bright future?

Honda's FCV compares well to the Mirai
On paper at least, Honda's FCV compares well with its most direct rival, Toyota's (TM 0.37%) hydrogen-powered Mirai.

The FCV is a bit bigger than the Mirai. Its interior is roughly comparable in size to a Honda Accord's, with seating for five. The FCV's dash is a bit futuristic-looking, but not too unfamiliar: It looks like something that Honda actually intends to build and sell.

The interior of Honda's prototype FCV. Honda says that the FCV will go into production early next year. Image source: Honda

Like the earlier FCV Concept that Honda showed last year, this FCV has a lot of styling touches that are intended to minimize the car's aerodynamic drag, to extend its range. But those touches have been toned down on the latest iteration.

It's powered by the latest iteration of Honda's fuel cell "stack." Honda said that the new stack is quite a bit smaller than its last-generation version -- about the same size as Honda's 3.5 liter V6 gasoline engine. That means it'll fit under the hoods of many existing vehicles -- which means that Honda can roll out full-cell versions of its existing models if the demand is there.

Honda says that the FCV will go into production next year. It'll be available in Japan by the end of March, and in Europe and the U.S. a little later on.

But who will buy it?

But how well do fuel cells compare to battery-electrics?
Like the Mirai, the Honda is powered by a fuel cell, a device that chemically converts the energy in a fuel (in this case, hydrogen gas) to electricity. The only "exhaust" from the process is water vapor. 

Put another way, a fuel-cell car is an electric car that uses the fuel cell -- and a tank of hydrogen -- in place of a big battery pack. That comes with one obvious disadvantage right up front: Where do you get "gas" when the gas that you need is hydrogen?

Right now, there are only a few hydrogen refueling stations in the United States. Many more are planned -- if the technology starts to show promise. 

Many green-car experts have argued that batteries are a more promising technology. Current methods of mass-producing hydrogen gas aren't especially environmentally friendly. And the lack of refueling infrastructure -- at least right now -- makes them a cumbersome alternative at best.

But fuel-cell proponents say that their technology has one big advantage over batteries: Recharging time.

Even the best battery-electric cars on the market today still take hours to fully recharge. Toyota executives have said that they think that will keep many mainstream consumers way from battery-electric cars. 

Honda says that the FCV's hydrogen tank can be refueled in just three minutes. With a full tank, Honda says, the FCV has a range of over 700 kilometers, 435 miles. That beat's Toyota's Mirai, which has a claimed 312-mile range on a full tank -- but both beat the range of Tesla Motors' Model S.

But here's the thing: That advantage may not last long.

Batteries continue to attract a lot of investment
Volkswagen
(NASDAQOTH: VLKAY) recently showed electric vehicles from Audi and Porsche that appear to make significant leaps forward in recharging capability. 

The Audi is an SUV with a claimed range of over 500 kilometers (312 miles) that can be fully recharged in just 50 minutes, the company says. It'll be in production in about two years.

It's possible that Volkswagen's recent troubles could delay the electric Audi. But If Tesla can't make a similar leap forward in recharging time by then, it's a safe bet that it won't be far behind. 

Long story short: Recharging times are coming down.

More fuel-cell cars are coming, but the window of opportunity is closing
Other automakers are at least dabbling with fuel cells. Hyundai has been offering small numbers of a fuel-cell-powered version of its Tucson SUV for lease in California. And several automakers are involved in joint ventures that are working toward commercially viable automotive fuel-cell stacks by the end of the decade.

But by the time affordable fuel-cell cars start to arrive, will they still have a meaningful advantage over batteries?

Huge sums are being invested in battery-electric vehicle technology, including several different efforts to mass-produce lower-cost batteries. (Tesla isn't the only company working on a "gigafactory.")  At some point -- likely soon -- the cost of a battery-electric car will match or beat that of a comparable gasoline-powered vehicle.

Recharging time will still be a concern. But the progress made by Volkswagen (or at least claimed by Volkswagen) suggests that while recharging times are unlikely to match a three-minute gas-tank fill-up any time soon, they could get "good enough" before long.

At that point, who will buy a hydrogen car? It's a question that I'm hoping that Honda will answer when it formally unveils the FCV at the auto show in Tokyo.

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