Honda says it is currently backing hydrogen power for the cars of the future, disputing a decision made by the Obama administration to drop the fuel-cell technology in favor for battery-run cars. "Fuel-cell cars will become necessary,” said Takashi Moriya, head of Honda’s group developing the technology. “We’re positioning it as the ultimate zero-emission car.” Honda is currently the only carmaker to lease hydrogen-power automobiles to individuals has opened a production line last year in Tochigi prefecture to produce 200 FCX Clarity sedans which are currently being leased in a trial in LA. The Obama administration sought to eliminate hydrogen-station funding and instead lend $1.6 billion to Nissan Motor Co. and $465 million to Tesla Motors Inc. to make electric cars, and give $2.4 billion in grants to lithium-ion battery makers.
“Honda has a propensity to think very long term,” said Ed Kim, an analyst at AutoPacific Inc. in Tustin, California. “It’s also part of the company culture that if they’ve made a decision they think is correct, they’ll really stick with it.”
However Honda is not alone on their future hydrogen efforts, along with Honda is Toyota, Daimler AG, GM and Hyundai which all believe that hydrogen, the universe's most abundant element is one of the few options to replace oil as a low carbon transportation fuel.
Honda says hydrogen vehicles match the refueling style drivers are used to: filling up in minutes at a service station. The FCX Clarity is only available in LA for now, where there are 16 hydrogen stations where leasers can use. The 5- passenger car has a top speed of 100 miles an hour and goes 240 miles (386 kilometers), more than double the 100-mile range of Nissan’s compact electric car. Through July, Honda has leased cars to 10 drivers for $600/month.
One of Honda's problems facing fuel-cell cars is the need for a hydrogen filling station network. "We cannot do infrastructure alone,” said Moriya. “We’ve been developing the cars on our own without government support.” In July, the Senate and the House voted to restore the funds, but President Obama still has to approve the final budget. Honda and Toyota will have to reduce production costs to win over consumers. Fuel cells need more platinum, a precious metal that costs $1200+/ounce and the durability of a fuel-cell engine is half of that of a gasoline engine.
Honda plans to offer hydrogen-powered cars at costs comparable to midsize gasoline autos by 2020. Honda said its 2005 hand-built predecessor the FCX to the Clarity cost about $1 million. Moriya wouldn’t discuss the Clarity’s price.
Honda engineers in Tochigi are trying to trim costs. For 13 months, technicians have worked in a semiconductor-style clean-room, coating rolls of plastic film for fuel-cell membranes. Nearby, a press stamps stainless-steel plates that will grip the material. Hundreds of the cells are then sealed in a metal case, forming the fuel-cell stack.
Honda’s hydrogen push has been undermined by plunging sales in the U.S., its main market. Last quarter, profit at Japan’s second-largest carmaker fell 96 percent to 7.5 billion yen ($79 million). Its research budget is 515 billion yen this fiscal year, down 8.5 percent. Funds for fuel cells were cut and some spending shifted to other “priorities,” Moriya said, without elaborating.
Honda probably spends “a few tens of billions of yen” a year on fuel cells, said analyst Mamoru Kato at Tokai Tokyo Research Center in Nagoya.
“Maybe, just maybe, fuel cells will be the future,” said Edwin Merner, who helps manage about $3 billion at Atlantis Investment Research in Tokyo. “And if you’re not in there, then you have a big disadvantage.”