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Tesla's Biggest Competitor Is Hiding In Plain Sight

Tesla

The Tesla Cybertruck is getting the enthusiasm CEO Elon Musk had hoped for, bragging that 200,000 pre-orders have already been placed for the futuristic electric pickup launched Thursday night. But he's yet to respond to Nikola Motors CEO Trevor Milton's offer to share his company's even cooler fuel cell pickup design to reach a "broader market."

Nikola Motors is at the center of a surge in support for hydrogen and fuel cell vehicles that had been missing. Musk for years has dismissed and ridiculed hydrogen fuel cell vehicles, but the truck segment is grabbing hold of it — along with cleantech and green power advocates — who had previously always chosen electric vehicles over fuel cell. Consulting firm Cleantech Group calls it a new path to “decarbonize transportation."

Nikola, Toyota, and Hyundai are being given credit for opening up the "hydrogen highway" through what they're bringing out in hydrogen-powered commercial trucks. Daimler Trucks, Kenworth, and truck engine maker Cummins are also entering the race. Fuel cell buses are another segment gaining support.

Hydrogen vehicles offer the performance and instant torque of battery electric vehicles, while providing greater range than any pure EV on the market today — which is a big deal for a trucking fleet looking to switch over from diesel. Another advantage is that refueling times are comparable to gasoline cars, another way its beating EVs — even those being juiced up through the fastest chargers. Electric pickups like Rivian’s R1T (which received a 100,000-unit order from Amazon) and what Ford and GM have in the works, will be competing with Tesla’s Cybertruck.

But for commercial trucks, hydrogen and fuel cells may be the winner; or at least the strongest competitor to diesel, gasoline, and future electric trucks. Related: Opportunity Arises In The Democratic Republic Of Congo

Budweiser brewer Anheuser-Busch has started testing Nikola semi-tractor trucks in its fleet. The beer company said it plans to buy up to 800 of the hydrogen fuel cell models for its fleet of long-haul delivery vehicles. Anheuser-Busch just took the first of these tests by delivering beer from the local Anheuser-Busch brewery to the St. Louis-based Enterprise Center using only zero-emission trucks. Nikola and electric vehicle maker BYD supplied the test vehicles.

Nikola Motors is also getting support for its innovation, though the company’s claims are yet to be proven. These include a landmark breakthrough in battery technology that could double the range of electric vehicles without adding any weight (offering EV competition to Tesla's upcoming Semi electric heavy-duty trucks); and a monthly lease payment that would require customers to agree to a million-mile lease at the cost of 95 cents mile, or $950,000 over a typical seven-year lease to remove some of the risk of buying a fuel cell truck. Nikola also has plans in the works for setting up about 700 hydrogen fueling stations — another investment plan similar to Tesla taking on its Supercharger network.

Toyota Motor Corp. has the top-selling hydrogen powered car in the world, the Mirai, but it’s also committed to fuel cell trucks. The company has been testing a hydrogen fuel cell yard truck that moving shipping containers within the Port of Los Angeles. The company also entered a project with truck maker Kenworth to build 10 zero-emission Class 8 trucks. They’ll be supported by the California Air Resources Board’s Zero and Near-Zero Emissions Freight Facilities grant, and these trucks will be used at the harbor complex for the Ports of Los Angeles and Long Beach.

Hyundai Motor Co. plans to build a production capacity of 500,000 fuel cell systems for passenger and commercial vehicles by 2030 at a cost of about $6.4 billion. The Korean-maker recently unveiled the concept of its planned HDC-6 Neptune hydrogen fuel cell truck in Atlanta. Hyundai sees opportunities in the US, but the Asian market would also be hot — with serious commitments given to fuel cell vehicles and hydrogen stations by the governments of South Korea, Japan, and China.

Hydrogen fuel cell buses are seeing more demand. Both Toyota and Hyundai have offerings and have begun selling fuel cell components to bus makers, particularly in China. A number of Chinese vehicle makers have developed their own buses, including state-owned SAIC Motor, the nation’s biggest automaker, and Geely Auto Group, which also owns the Volvo Cars and Lotus brands.

State incentives — and stringent emissions mandates — have also helped fuel cell buses take off with California transit agencies. Hydrogen-fueled buses have up to twice as much range as battery-electric buses. They also can refuel quickly, and they are easier to scale up because one hydrogen refueling station can handle larger volume than a single charging post; but the purchase prices is still very high. Related: Precious Metals See Record Inflows

Ballard Power Systems, based in British Columbia, Canada, develops and produces fuel-cell products and solutions that are part of these fuel cell buses. The company is elated to see its shares soar after 40 years of struggles in the industry. 

The company has seen a dramatic change over the past year, according to Randy MacEwen, CEO of Ballard. Some of that has been coming through customers In Europe, where operating a fuel cell-powered electric bus is now cost competitive with a traditional fuel version, he says. Use of the fuel cell technology is diversifying into ships, trains, and forklifts.

Electric power is also another avenue for economic support, with utilities gaining interest in it for environmental compliance. Steelmakers and oil refineries have also been gaining interest in hydrogen for their heat-intensive processes. That’s taken a lot of coal, oil, and natural gas. But government pressure around the world has led to breakthroughs

"Hydrogen has a big advantage," said Markus Krebber, the finance director of RWE, Germany's largest electricity generator. "You can use it in everything that's difficult to electrify, from long distance trucks, barges, trains, maybe planes one day. It will be needed to decarbonize the power sector 100 percent.”

Hydrogen is very expensive to produce for its fuel power, and carries with it a host of concerns over its safety and competition from other energy sources. European utilities and energy suppliers are working together to adopt hydrogen by using electrolysis, where an electric current passes through water, splitting off hydrogen atoms from oxygen. That technology is well known and growing cheaper by the year.

In transportation, hydrogen-powered trucks are leading the way, but automakers won’t stop making fuel cell cars anytime soon. In the US, the Toyota Mirai continues to lead in sales (as slim as they are). The Hyundai Nexo fuel cell SUV crossover replaced the company’s Tucson FCEV and competes with the Honda Clarity Fuel Cell.

The Hydrogen Mobility Europe (H2ME) project has been advocating fuel cell vehicles and supporting a European network of hydrogen refueling stations. In that market, the Daimler GLC F-CELL, B-Class F-Cell, Mirai, Clarity Fuel Cell, and Daimler B-Class F-Cell, and Symbol fuel cell range-extended vans, are receiving support from H2ME.

By Jon LeSage For Oilprice.com

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