SAE EPR2020002

This SAE EDGE Research Report looks at the pros and cons of moving this technology forward and brings recommendations to facilitate a smooth transition from fossil fuel-based to hydrogen-based mobility.

Unsettled Issues Concerning the Economics of Fuel Cells and Electric Ground Vehicles discusses the unsettled economic aspects of hydrogen and fuel cell applications in the automotive industry. Lately, the idea of using hydrogen in automotive applications is gaining momentum. While the concept of using clean hydrogen fuel generated from water via electrolysis is nothing new, previous efforts to mainstream the technology failed miserably. About a decade ago, the fuel cell technology, which efficiently converts hydrogen and atmospheric oxygen into electricity, was not as advanced and the fuel cell prototypes were bulky and expensive.

Yet, many new fuel cell electric vehicles (FCEVs) have emerged, and hydrogen refueling infrastructure is being built globally. Despite the important steps forward, hydrogen generation and fuel cells are still costly and cannot compete with fossil fuel-based solutions. While it can be a viable tool in combating climate change and air pollution, hydrogen currently hardly makes a business case. And although many hydrogen infrastructure developments are fueled by government subsidies (and fear of carbon tax), detailed economic evaluation suggests that creating a hydrogen economy of scale can reduce technology costs, creating the window of opportunity it needs to become a concrete global market player.