Ballard-Ford-Daimler Venture Speeds Fuel Cell Progress
November 26, 2007

By Kate McLeod

SHANGHAI, CHINA -- Whiz-bang press conferences on fuel cell technology have been part of the auto show circuit for at least a decade.  Journalists have been driving fuel cell cars around parking lots in New York, LA and Chicago for years.  Interesting enough, but where’s the beef?  When is the public going to be offered a car that is powered by hydrogen?

In a pairing of seemingly strange bedfellows, Daimler and Ford have now formed a joint venture to become more involved in the automotive fuel cell business of Vancouver, Canada-based Ballard Power Systems.

The move suggests a fuel cell car just might be getting closer to the showroom.

Fuel Cells Approaching Economic Sense

Ballard has long been a pioneer in fuel cell development. Every automaker dabbling in fuel cells, likely worked with Ballard at some point. In fact, Daimler and Ford were Ballard shareholders before they recently announced its newest alliance, in which Daimler owns 50.1 percent, Ford holds a 30-percent stake and Ballard retains the rest. Each partner will contribute $60 million to the operation. The deal includes Ballard's numerous patents and 150 employees.

The alliance undoubtedly will tackle the long-time struggle to make fuel cells commercially viable for mass-produced automobiles. So far, only about 130 cars, trucks and buses powered by Ballard fuel cells have been produced.

Chris Guzy, Ballard’s chief technology officer attending the recent Michelin Challenge Bibendum in Shanghai, China, talked with AutoObserver about the new partnership and says the company, with Daimler and Ford onboard, is closer to making fuel cells for cars commercially viable.

“For the application of fuel-cell technology in automotive to make sense, it had to be primarily an economic decision, not an environmental one,” said Guzy. “We are much closer to the time when fuel cells start to make economic sense.”

High Cost of Oil Boosts Fuel Cells

The higher cost of oil, now approaching $100 a barrel, improves the prospects for fuel cells and other alternative-fuel technologies. The higher gas goes, the more alternatives, otherwise more expensive, begin to make economic sense.

Then the question becomes what is sustainable over the long run – a question asked over and over at the Michelin Challenge Bibendum, an event that brings together the state-of-the-art in sustainable transportation.

The idea of hydrogen-powered fuel cells has been a favorite of automakers and environmentalists alike because fuel cells emit only water vapor as a byproduct, can operate more efficiently than a gasoline-powered internal combustion engine and, depending on how the hydrogen is produced, provides increased independence from petroleum use.

The main drawback has been the immense expense, that, while it is coming down, has yet to match the cost of a traditional gasoline engine, the ultimate goal of automakers for any alternative-fuel vehicle. Some experts claim fuel cell vehicles remain 100 times more expensive than gas-powered ones.

More Resources Invested in Fuel Cells

Ballard’s new alliance with Daimler and Ford invests greater resources into development of the fuel cell, which boosts prospects for the technology going commercial.

“A small company like Ballard cannot justify pouring the amount of money into the development work that it takes to develop fuel cells for automotive,” says Guzy. “We have to have returns for our shareholders. The deal with Daimler and Ford allows a small public company like Ballard to focus on commercial markets, and the auto companies to focus on developing the fuel cell for automotive applications.”

Guzy sees the spending rate on development increasing, with auto companies now willing to assume more risk.

“Auto companies traditionally have a roadmap that’s 10 years out,” he notes. “While volume for this technology is maybe six to eight years away, that is a normal timeframe for the development for a new (car) model.  It is normal business for an auto company."

“Auto companies traditionally have a roadmap that’s 10 years out,” he notes. “While volume for this technology is maybe six to eight years away, that is a normal timeframe for the development for a new (car) model.  It is normal business for an auto company.”

Indeed, fuel cell cars are no longer concepts; some are actually operating in working vehicles.

Only last month, General Motors introduced its hydrogen fuel-cell powered Equinox that will go to real customers in California, and Honda announced it would put its FCX fuel cell vehicle into production for sale to consumers.

Ballard’s new partners are moving in that direction as well. Ford has a test fleet of 30 hydrogen-powered Focus sedans on California roads. A Ford spokesman said the new venture with Daimler and Ballard will allow it to move much more quickly on fuel cells. Daimler has said it expects mass-produced fuel cell vehicles, starting between 2012 and 2015, with a limited number of Mercedes-Benz B-Class cars powered by fuel cells on roads in 2010.

“The difference between two years ago and today is that Daimler presented the fuel cell on the B class, which is an actual working vehicle…The same with the Ford HySeries, which has been in use for a while and contains some of our more advanced technology,” says Guzy. “What’s different is that these are real vehicle programs and real powertrains.”

Guzy says fuel cell vehicles have moved from the lab to the streets. “We have reached a tipping point now where there is less development and more engineering -- people are willing to overlap research with powertrain development because there is less risk. Now when auto companies do their planning they can see the point in the road where they need to be and now they can get there with a reasonable amount of risk.  We see a timeframe, we see a line of sight, and we think electric.”

In addition, hurdles in terms of performance of fuel cells are being overcome. “The performance of our fuel cell in the Ford HySeries has proved to be much more reliable on the road than it was in the lab,” says Guzy. “Daimler says it clocked 3.8 million kilometers on its (fuel cell) vehicles, and the total for all products that have Ballard products is more than 5 million kilometers.”

Cost, Infrastructure Hurdles Remain

“We learned with electric that consumers don’t want compromises,” says Guzy. “There are very few compromises with these fuel cells.  We’ve all been happy with the performance in the Daimler and Ford fleets.”

Still, he acknowledges, cost hurdles remain. “We have some work to do maintaining and slightly increasing performance while reducing cost,” he says.

The other problem is infrastructure. Where does a consumer buy hydrogen to power the fuel cells?

“All of the OEMs are nervous about infrastructure,” admits Guzy. “The cost of hydrogen delivered by energy companies or industrial gas products is relatively high. One thought is to share the burden of regulations with those that supply the fuel.”

Guzy notes Honda’s solution is clever in that is is launching its own energy systems.

Photos by Michelin North America

1 - Mercedes-Benz fuel cell cars at the 2007 Michelin Challenge Bibendum in Shanghai, China.

2 - Ballard's Chris Guzy interviewed by AutoObserver at the 2007 Michelin Challenge Bibendum in Shanghai, China.

3 - Ford's HySeries fuel cell car at the 2007 Michelin Challenge Bibendum in Shanghai, China.

Posted by Michelle Krebs at 6:01 AM under Featured , Ford , Technology | Comments (0) | digg this | Seed Newsvine