Fuel cell Electric Vehicles are coming to market in the 2020s. Battery powered EVs have not won over global automakers as a Holy Grail and the industry is doubling down on fuel cells as the systemic solution to producing tens of millions of EVs per year.
The end game is likely the integration of battery plus fuel cells as the most compelling path for scaling electric motor vehicles into hundreds of millions of cars and trucks.
Partnerships for Production Volumes (Just Wait Until China Gets Involved)
In 2017, GM and Honda agree to mass produce hydrogen fuel cell systems beginning in 2020 under a JV Fuel Cell System Manufacturing. In 2018, Toyota committed to expanding fuel cell system volumes to 30,000 per year in 2020. This will likely benefit its partnership with BMW. Now Germany’s Audi (VW) and South Korea’s Hyundai are following a similar strategy of partnering to drive down costs and scale up to mass production volumes.
Fuel Cells as Systemic Solution
In June 2018, Korea’s Hyundai Motor Group and Germany’s Audi agreed to a partnership that aims to accelerate the integration of fuel cells into EV platforms. The companies will cross license intellectual property, R&D efforts and fuel cells system components.
Audi will gain access to Hyundai’s experience from Nexo – the world’s first mass produced SUV. Hyundai will gain access to VW’s Audi engineering talent to further integrate fuel cell and battery systems into a viable electric power train platform. The key to this deal appears to be lining up partnerships for high volume orders on fuel cell components produced by Hyundai Mobis (Mobis) and other suppliers.
The end game for both companies is reducing costs. The quickest path for that outcome is to join forces with their internal talent and (as important) send signals to fuel cell and hydrogen component suppliers that volume orders are around the corner in the mid 2020s.
In a press release by PRNews:
“The fuel cell is the most systematic form of electric driving and thus a potent asset in our technology portfolio for the emission-free premium mobility of the future,” said Peter Mertens, Board Member for Technical Development at AUDI AG. “On our FCEV roadmap, we are joining forces with strong partners such as Hyundai. For the breakthrough of this sustainable technology, cooperation is the smart way to leading innovations with attractive cost structures.”
According to a Reuter’s report
“We want to provide to our component suppliers more chance and we want to have competition between component suppliers,” Sae Hoon Kim, the head of Hyundai’s R&D fuel cell group, told Reuters in an interview in London. “We also want to make them to have competition with other suppliers, and that competition will bring down the cost.”
Battery EVs Have Not ‘Won’
The news of Audi-Hyundai is yet another signal coming from the automotive industry that a battery-only mindset of the future falls short in real world efforts to scale hundreds of millions of electric motor powered vehicles.
The 2020s will be an exciting decade for building awareness among consumers. Battery powered EVs will continue to dominate sales. Yet the end game of producing hundreds of millions of EVs is not likely to arrive until the 2030s – 2040s. Plenty of time for fuel cell volumes to increase and present a much cheaper (and scalable) option to global auto OEMs.
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