Hydrogen Fuel-Cell Car Development Intensifies in China

Business  /   /  By Bradley Berman

The prospects for reducing the world’s greenhouse gas emissions—and other air pollutants from vehicle emissions—requires a careful look at the globe’s biggest car market: China. After bypassing the United States in car sales in 2009, China’s market continues to grow at a steady pace. It’s on track this year to reach nearly 22 million passenger vehicles, compared to America’s projected 2016 sales volume of about 14 million cars. In that light, the Chinese government took a big step forward on the environment when it announced on November 8 that it plans to build hydrogen infrastructure to support about 50,000 zero-emissions fuel-cell cars by 2025, rapidly growing to 1 million by 2030.

This plan will require China to build 300 hydrogen refueling stations by 2025 and 1,000 by 2030. In China, sales of so-called new energy vehicles—which includes hybrids, battery-electric cars and fuel-cell vehicles—are subsidized with attractive consumer incentives, as well as perks such as free parking and lower license fees. In 2015, Reuters indicated that Chinese car buyers could receive as much as $25,000 in incentives for the purchase of a new energy car.

This level of commitment has stirred China-based hydrogen-related activity from major automakers, including Daimler, General Motors, Honda, Hyundai, Toyota and Volkswagen.

Volkswagen likely had China in mind when in September it accelerated development of a next-generation fuel-cell stack. (VW bought fuel-cell patents from Ballard Power Systems, a leading supplier, in 2014.) Reuters also reported that Ballard is working with three other major automakers—and in July signed a deal with China’s Zhongshan Broad-Ocean Motor to supply fuel cells for 10,000 Chinese delivery vehicles.

In fact, Broad-Ocean said that it had invested $28.3 million in Ballard. That represents an ownership stake of about 10 percent in the company, which Broad-Ocean, according to a Ballard press release, wants to double to a 20-percent stake.

Meanwhile, Plug Power—a fuel-cell maker based in Latham, NY—this month announced that it will partner with Furui (a Chinese natural gas company) and an unnamed major Chinese automaker to build fuel-cell systems and fueling stations. “Fuel cells have become a very important part of the Chinese five-year plan. In that five-year plan, China is actively promoting fuel-cell vehicles, which start out with items like delivery vans and buses,” said

Andy Marsh, Plug Power’s chief executive, in an interview with the Albany Business Review. “The Paris climate treaty is being taken very serious by the Chinese government.” He added that the Chinese government is making fuel-cell vehicles a key component of its $100 billion investment in new energy.

Plug Power is best known as a supplier of fuel cells for use in forklifts. Yet, Marsh said Plug Power will produce more than 500 vehicles and a fueling-station network in the Shanxi province of north China over the next year—followed by 13,500 more vehicles by about 2020.

Toyota, the world’s leading maker of fuel-cell cars, also sees China as a key market for its Mirai fuel-cell sedan and other hydrogen-powered vehicles. Toyota last week revealed the Mirai at Auto Guangzhou, a mammoth car show held in the southern Chinese city. Toyota said that it plans to expand its research and development facilities at its China-based Toyota Motor Engineering and Manufacturing Company (TMEC). The company has long advocated for a broad range of suitable environmental technologies. TMEC, since its establishment in 2010, has been developing gas-electric hybrid systems developed in China for the Chinese market.

Toyota’s portfolio approach—and its commitment to hybrids and hydrogen—match closely with China’s emerging green-vehicle path. In late October, Bloomberg reported that the Chinese government is putting increased emphasis on conventional hybrids as a means of reaching its fuel-efficiency targets. With hybrids ready to roll in the short term, and hydrogen infrastructure in development in the coming years, China is establishing a technology roadmap to reach its aggressive target for average fuel consumption: about 47 miles per gallon by 2020, up from around 33 mpg today.

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