German auto giants place their bets on hydrogen cars

Munich

BATTERY power may be the frontrunner to become the car technology of the future, but don't rule out the underdog hydrogen.

That's the view of some major automakers, including BMW and Audi, which are developing hydrogen fuel-cell passenger vehicle prototypes alongside their fleets of battery cars as part of preparations to abandon fossil fuels.

They are hedging their bets, calculating that a change in political winds could shift the balance towards hydrogen in an industry shaped by early-mover Tesla's decision to take the battery-powered road to clean cars.

Global auto hub Germany is in sharp focus. It is already betting billions on hydrogen fuel in sectors like steel and chemicals to meet climate targets, and closely-fought elections this month could see the Greens enter the coalition government and further push the technology.

BMW is hydrogen's biggest proponent among Germany's carmakers, charting a path to a mass-market model around 2030. The company also has one eye on shifting hydrogen policies in Europe and in China, the world's largest car market.

The Munich-based premium player has developed a hydrogen prototype car based on its X5 SUV, in a project already partly funded by the German government.

Jürgen Guldner, the BMW vicepresident who heads up the hydrogen fuel-cell car programme, told Reuters the carmaker would build a test fleet of close to 100 cars in 2022.

"Whether this (technology) is driven by politics or demand, we will be ready with a product," he said, adding that his team is already working to develop the next generation vehicles.

"We're on the verge of getting there and we're really convinced we'll see a breakthrough in this decade," he said.

VW's premium Audi brand told Reuters it had assembled a team of more than 100 mechanics and engineers who were researching hydrogen fuel cells on behalf of the whole Volkswagen group, and had built a few prototype cars.

Hydrogen is viewed as a sure bet by the world's biggest truckmakers, such as Daimler AG unit Daimler Truck, Volvo Trucks and Hyundai, because batteries are too heavy for long-distance commercial vehicles.

Yet fuel cell technology - where hydrogen passes through a catalyst, producing electricity - is for now too costly for mass-market consumer cars. Cells are complex and contain expensive materials, and although refuelling is quicker than battery recharging, infrastructure is more scarce.

For years Japanese carmakers Toyota, Nissan and Honda, and South Korea's Hyundai, were alone in developing and pushing hydrogen fuel-cell cars, but now they have company.

China is expanding its hydrogen fuelling infrastructure, with several carmakers now working on fuel-cell cars, including Great Wall Motor, which plans to develop hydrogen-powered SUVs.

There remain divisions about the technology's prospects in the global car industry, and even within auto groups.

VW's Audi unit might be researching fuel cells, for example, but Volkswagen group CEO Herbert Diess has been scathing about hydrogen-powered cars.

"The hydrogen car has proven not to be the solution to climate change," he said in a tweet this year. "Sham debates are a waste of time."

Stephan Herbst, general manager of Toyota in Europe, has a different view. Speaking in his role as a member of the Hydrogen Council business group, which forecasts that hydrogen will power more than 400 million cars by 2050, he said he was confident that now governments had set ambitious carbon-reduction targets, they would push hydrogen alongside battery electric cars.

"We strongly believe this is not a question of either or," he added. "We need both technologies."

Fitch Solutions auto analyst Joshua Cobb said the bloc was only likely to start pushing hydrogen passengers cars in two to three years' time, given it was still figuring out how to pay for its battery-electric car push and how to obtain enough "green" hydrogen from renewable sources.

He said that it would still take years before any European policy support for hydrogen-powered cars translated into significant sales.

BMW's Mr Guldner acknowledged hydrogen technology was too expensive to be viable for the consumer market today, but said costs would come down as trucking companies invested in the technology to bring fuel-cell vehicles to market at scale.

He said BMW saw hydrogen fuel-cell cars as "complementary" to its future battery electric model range, providing an alternative for customers who cannot charge at home, want to travel far and refuel swiftly. The motor in the hydrogen X5 is the same as BMW's all-electric iX.

"When the future is zero emissions, we believe having two answers is better than one," he added. REUTERS