Tucson Fuel Cell: The Next Generation Electric Vehicle

Every once in a while, it can feel like you’re at ground zero, at the launch of a new era. These past few weeks, after big hydrogen fuel cell announcements by Toyota, Honda and Hyundai in Tokyo and Los Angeles, we could definitely feel this was a critical inflection point for an industry that has relied on internal combustion power for more than a century. While battery electric vehicle (BEV) technology continues to improve and provides a viable alternative for some, its range and inherent slow-charge limitations means it will only meet the needs of a distinct subset of car buyers.

Hydrogen fuel cells promise something more. They are, in effect, the “Next Generation” of electric vehicles, with both the range and fast-fill characteristics of today’s internal combustion engine (ICE), and the zero-emission advantages of BEVs. At Hyundai, we believe ICE, BEV, and hydrogen Fuel Cell Electric Vehicle (FCEV) propulsion technologies will continue to co-exist for some time, meeting different buyer needs. But if you believe our fleet must evolve to become less dependent on petroleum-based fuels, and if you believe consumers want vehicles that provide fast-fill and long range, then you have to believe, as we do, that FCEVs will become a significant and growing part of our automotive future.

So what about Hyundai’s big announcement at the L.A. Auto Show? Well, we announced the future begins this coming spring, with the launch of the first mass-produced, federally-certified hydrogen FCEV, the 2015 Hyundai Tucson Fuel Cell electric vehicle. For just $499/month and $2,999 down, including valet maintenance and all the hydrogen you can use, consumers in most of Los Angeles and Orange County can put the future in their driveway, while enjoying HOV lane access and a $2,500 Clean Vehicle Rebate. Response to our LA show announcement has been great, with over 18,000 website hits and over 2,000 hand-raiser requests coming through https://www.hyundaiusa.com/tucsonfuelcell and our auto show exhibit. We’ll be sorting through these strong demand signals and announcing more details of our go-to-market strategy in the weeks ahead. One thing is for sure though – we want our first Tucson Fuel Cell customers to have great experiences, so we’ll ensure these early adopters live in zip codes with easy access to hydrogen infrastructure. While this will limit initial sales (e.g., we sell about 1,300 ICE Tucsons per year in these zip codes), we are less interested in high sales volume in the first few years of this technology than we are in absolutely delighting the first owners of the Next Generation of Electric Vehicles. This is a marathon, not a sprint, and while we want to lead the pack with a strong FCEV start, we’ll be pacing ourselves to the infrastructure that is being developed in parallel with our launch.

One of the big surprises for me personally has been the level of passion and advocacy in the debate between BEV and FCEV enthusiasts – be they blog commenters, journalists, and even automotive executives. With Hyundai having significant development efforts on both sides of the table (we’ll have a BEV in the near future, too), we are in a more neutral position here, with a focus on providing the best ZEV (zero-emission vehicle) solutions for the whole spectrum of customer needs. Our ZEV development expenses, both BEV and FCEV, total hundreds of millions of dollars over the past several years. These are R&D investments in the future of zero-emission personal mobility. They are not marketing expenditures. But like all new things, these investments, and the strategies and products that come from them, require conversation and debate to reach a better common understanding. Here, we aim to push that dialogue a few steps forward.

Recently, I had the opportunity to spend time with some of the deans of the green car journalist field. I asked what they saw as the key battlegrounds of this debate. They shared three canons of BEV advocacy:

  1. BEVs have a Well-to-Wheel (WTW) Greenhouse Gas (GHG) advantage over FCEVs
  2. Hydrogen infrastructure is a fundamental barrier to FCEV adoption
  3. Slow-charge times are balanced by the fact that BEV owners enjoy the convenience of recharging at home, something that FCEVs can’t do

Let me share Hyundai’s point-of-view on each of these:

1. BEVs have a Well-to-Wheel GHG advantage over FCEVs
While there likely will be healthy debate on this topic for years to come, the latest study comes from  the Advanced Power and Energy Program, at the University of California at Irvine. They find that BEVs and FCEVs have comparable GHG outputs. Taking into account GHG emissions at every stage (including feedstock, production, transmission and consumption), FCEV GHG emissions are comparable to BEV GHG emissions. BEV has a small advantage in California based on the cleaner grid here, while FCEV has a small advantage on a national basis. Importantly, both BEV and FCEV solutions deliver more efficient total GHG outputs than any other configuration, include high-mpg ICE vehicles, natural gas variants, HEVs and PHEVs.

Source: University of California, Irvine – Advanced Power and Energy Program

2. Hydrogen infrastructure is a fundamental barrier to FCEV adoption
Lack of sufficient hydrogen infrastructure has certainly been a barrier to FCEV adoption. What’s different now are the many approved programs and significant financial commitments from national and local governments around the globe. In Europe, Germany’s H2 Mobility has set up a specific action plan for the construction of 100 hydrogen stations in the next four years, and 400 stations by 2023. Here in California, in support of the state’s ZEV action plan, the legislature has allocated $20 million annually for the development of 100 public hydrogen stations (9 stations are currently open, another 17 stations are already under development). In addition, the H2USA partnership, bringing together private and public perspectives and kicked-off by the U.S. Department of Energy, is defining the best way to build a national refueling infrastructure. Yes, today’s hydrogen infrastructure solutions are regional – but over the next several years, more accessible hydrogen refueling will expand to over 35 million Californians and 80 million Germans. Keep in mind, today’s convenient ICE refueling infrastructure was practically non-existent back when internal combustion engines began to gain momentum in the BEV/ICE market more than a century ago. Again, this is a marathon not a sprint, but the foundation for a global hydrogen refueling infrastructure is being laid now, and it’s exciting for us at Hyundai to be playing a role that will help catalyze that development.

3. Slow-charge times are balanced by the fact that BEV owners enjoy the convenience of recharging at home, something that FCEVs can’t do
There’s an undeniable delight for some in the joy of plugging in their car when they get home at night, knowing it will be charged in the morning and able to deliver the requirements of a daily commute. But what about the many who don’t have a garage or access to overnight charging? And what about those situations that take the driver away from home? And how to build a national infrastructure of away-from-home charging in which charging vehicles must occupy a single physical space for long periods of time? For more folks, we think, there is a deep sense of security, taken for granted by most, that comes with the type of refueling infrastructure provided for ICE vehicles. Today, refueling times are quick, and locations abundant. For most, it’s a weekly task of five-to-ten minutes duration. For those in areas where a hydrogen infrastructure is established and growing, such as Southern California where we will launch Tucson Fuel Cell, FCEVs will deliver this type of security, and with a range of up to 300 miles and growing H2-fill locations, liberation from the sort of range anxiety many BEV owners experience. And for those BEV enthusiasts who highly value at-home charging and whose usage patterns don’t require ICE or FCEV range capability, the good news is that there certainly will be a growing selection of plug-in options, including those from Hyundai.

So that’s our take on a complex situation. Look, we realize there’s still plenty of room for conversation and debate here. But the new news is, while we’re having this debate, there’s a new alternative available – the $499/month Hyundai Tucson Fuel Cell electric vehicle. If you’re open to new ideas and choice, that’s something to celebrate, no matter what your perspective might be. We’re hoping the consumer interest we’re seeing already will help spark additional action among private companies and state and local governments, to expedite infrastructure deployment. We also expect other auto companies to bring learning-curve cost efficiencies to market even faster, perhaps spurred on in some fashion by our Tucson Fuel Cell. That’s how all of this is supposed to work. And here’s the best part – the winner is all of us, because more competition and choice make things better for everyone. Thanks for listening to our point-of-view on ZEVs. It’s an exciting time, and I’m looking forward to sharing more of our strategy and our progress with you in the new year.

John Krafcik

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