What happened?

Last month, Toyota announced that it will begin mass production of the Mirai, its hydrogen fuel cell model. From 2020 onwards, the company plans to produce some 30 thousand Mirais and to develop additional fuel cell models. The Japanese car maker is not alone in its belief that hydrogen is the fuel of the future. Honda offers a small number its Clarity fuel cell sedans, Hyundai has started taking orders for its Nexo and German automakers BMW, Daimler and the Volkswagen Group (through Audi) continue to pledge support for hydrogen cars. As we noted last year, the hydrogen car has been declared dead more than once, but it nevertheless remains a popular option among car manufacturers and consumers.

What does this mean?

Battery-electric car sales are rising, and it is expected that in 2018 almost 2% of all cars sold globally will be fully or partially electric. Sales are expected to rise further and to reach a market share of 30 to 50% by 2040, but much of this will depend on public support through financial incentives for businesses and consumers. While battery costs are dropping rapidly and the performance of these cars is improving, their limited driving range and long recharging times will most likely remain an obstacle and will probably always fail to satisfy some car buyers. By contrast, hydrogen fuel cell cars do not suffer from these problems. They boast a range of at least 700 km and require only a few minutes to recharge. Because of these advantages, hydrogen could serve as fuel for all sorts of vehicles, from city cars to long-distance trucks and airplanes.

What’s next?

All in all, the hydrogen car is, in theory, the perfect car of the future, but it is still not clear if and how this potential may be realized. Besides overall cost reductions and economies of scale, the success of hydrogen cars will largely depend on the availability of enough refueling stations. Currently there are only about 300 stations worldwide and building a sufficient number of stations will require an enormous financial investment in the range of billions of dollars.  And, to make hydrogen cars genuinely zero-emissions cars, clean hydrogen production will need to ramp up massively. None of these challenges are necessarily dealbreakers, but much capital, patience and political will be necessary to make the hydrogen vision a reality.