Since their introduction in the US in late 1999, hybrid cars have been repeatedly dismissed as a “bridge technology”—a euphemism for a short-lived second-rate technology that briefly serves a purpose until it can be replaced with something better and longer lasting. But in recent statements coming within days of one another, executives from Honda and Nissan are reconsidering the role that hybrids will play in the coming decades.

For both companies, the plug-in hybrid is seen as the next stage of hybrids and as the key to the technology’s longevity. Honda was banking on a transition to fuel cell cars, while Nissan was primarily moving toward the pure battery-electric vehicle.

Honda began leasing a limited number of its FCX Clarity hydrogen fuel cell cars last year, and still sees hydrogen as the long-term alternative to gasoline. But Honda President Takeo Fukui believes that the cost of fuel will need to increase before hydrogen-powered cars are ready for significant growth. In an interview published by Bloomberg, he said, “Oil prices are going to go up. When that time comes, fuel cells, solar panels, hydrogen, those will be the key words. We will have packages that will be very competitive at that time.” In the meantime, he said the company is “thinking about plug-in hybrids.” He added, “We aren’t thinking about commercializing one right away.” Honda will need to modify its current mild hybrid system—or develop a new approach—in order to produce plug-in hybrids.

The Bridge Gets Much Longer

Honda’s views on plug-in hybrids are also motivated by new consumer tax credits—as much as $7,500 for a robust plug-in hybrid. Fukui said, “We understand the situation, in terms of government and incentives. Naturally, we’re going to have to accommodate that too.”

Nissan also sees a future jump in oil prices as the key to its long-term efficient technology: the electric car. “When GDP growth comes back on a worldwide basis, there will be again attention on the oil market, which will trigger an oil price increase,” said Carlos Tavares, Nissan executive vice president. “We will be in the right tempo to face that environment.”

Mark Perry, Nissan product planner, told HybridCars.com, “Zero emission vehicles are clearly our focus and we believe it’s the future state of transportation. Some segments of the market in the near term may best be served by high efficiency internal combustion engines, diesels, hybrids or extended range electric vehicles [also known as plug-in hybrids].” He added that these technologies are “all bridge technologies to the time when battery electric vehicles and fuel cell vehicles can cover every market segment.”

The Key Question: When?

The key question for both companies is how long it will take until electric cars and fuel cell vehicles can reach levels approaching the current hybrid market. After 10 years on the market, hybrids represent less than 3 percent of the new car market.

Speaking at the Society of Automotive Engineers’ 2009 World Congress last week, Minoru Shinohara, Nissan corporate senior vice president, said that plug-in hybrids will be an important transition solution to the pure electric vehicle because they don’t need an extensive public charging infrastructure. The cost of building the public charging infrastructure will cost many billions of dollars; therefore, most analysts believe that it could take decades to construct.

Hybrids will not necessarily disappear even after an electric-recharging or hydrogen-refueling infrastructure is built. Kenji Nakano, senior chief engineer, Honda R&D, also appearing at the World Congress, said, “Hybrid technology is also applied to fuel cell vehicles, range-extender vehicles, and plug-in hybrid vehicles. Thus, instead of being a bridge technology, hybrids are expected to remain in the mainstream for quite some time.”

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A lease on the Honda FCX Clarity will cost $600 per month, including service, maintenance, and collision insurance. The term on the lease will be three-years.

In terms of appearances, the futuristic four-door Clarity will closely resemble the FCX concept, aside from some minor front-end design modifications. The Clarity will be powered by a hydrogen fuel cell stack—running along the car’s center tunnel between the front seats—that generates electricity but produces zero exhaust emissions at the tailpipe. Functional improvements in the FCX Clarity over the previous concept model include a 20 percent increase in fuel economy, a 30 percent increase in vehicle range to 270 miles, and an advanced new lithium-ion battery pack that is 40 percent lighter and 50 percent smaller.

Okay, But Where Do You Get the Hydrogen?

Honda has not yet disclosed the production volume for this vehicle, but some industry observers expect Honda to produce about 1,000 units. Customers will be able to drop off their vehicles at a Honda dealership for service, and Honda will then transport the vehicles to a dedicated service facility. The company will need to carefully select customers, based on their proximity to the limited number of hydrogen refueling stations. The lack of infrastructure to produce, distribute and sell hydrogen fuel is among the major obstacles to the adoption of fuel cell vehicles.

This week, Honda also announced progress with a home-based hydrogen production system—called the HES IV—that would remove a consumer’s need to find hydrogen fuel or visit a gas station. The company installed such a system at its headquarters in Torrance, Calif. The system was created by Honda and Plug Power Inc., a provider of on-site energy solutions. “Before fuel cell vehicles can have any significant market penetration, there will need to be a viable solution to the inevitable refueling question,” said Mark Sperry, chief marketing officer at Plug Power. “The Home Energy Station provides the means for vehicle owners to produce onsite hydrogen, as well as heat and power, in an efficient and environmentally friendly way.”

Seventy percent smaller than the first generation version, the HES IV makes use of a home’s existing natural gas supply in order to produce hydrogen for vehicles, as well as providing heat and electricity for the residence. Honda claims that using the HES IV to heat a home and fuel an FCX Clarity would reduce CO2 emissions by as much as 30 percent, compared to the conventional usage of grid-supplied electricity and gas-powered automobiles. Energy costs would also be lowered by an estimated 50 percent.

Availability of the in-home system is not expected for another seven to ten years.

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Honda surprised many at the Tokyo Motor Show with the announcement that they will be putting a hydrogen fuel cell car into production next year for general sale. The company will produce fewer than 1,000 units. And though it makes perfect sense that Honda, over anyone else, would be the one to hit the production line first with this technology, most didn’t see this move coming for another five to seven years. Hydrogen is generally regarded as the long-term vision for eco-friendly alternative fuels.

Based on Honda’s futuristic FCX concept car, the new vehicle will feature the silent ride and zero emissions attributed to fuel cells, which create electricity through a chemical process that emits only water vapor at the tailpipe. Furthermore, the vehicle will be able to travel an estimated 270 miles between refueling stops, and will display a range meter instead of a fuel gauge within the four-seater cabin. The potential hang-up, however, will be infrastructure, as there are a very limited number of hydrogen fueling stations in place throughout the U.S. Honda President Takeo Fukui, however, doesn’t seem too worried about that issue, confidently stating “When the demand is there, it [the hydrogen economy] will happen.” That’s the kind of forward thinking that seems to be leading Honda to make this major push in the first place. Now that the seal is broken, it’s likely that other automakers will follow with a sense of urgency.

The vehicle will initially be made available to Japan and the U.S. It will be shown to the public this November at the Los Angeles Auto Show.

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	Before: Honda’s FCX fuel cell vehicle has been doing commute and carpool duty by a family in Redonda Beach, Calif.
	After: The redesigned Honda FCX, in concept form, is on display at the 2007 Detroit Auto Show. It’s slated for limited production in 2008.

The FCX’s predecessor, by comparison, was downright dowdy—but don’t think for a minute that Honda’s design team was asleep at the switch. Honda was apparently making a point— a fuel cell vehicle could be an everyday car for an everyday family. In fact, the previous Honda FCX model has been doing commute and carpool duty by a family in Redondo Beach, Calif., for almost two years. Prior to that, the city of Los Angeles was giving a limited number of Honda FCX vehicles for everyday use.

By handing over a fuel cell car to a private family—the first effort of its kind—Honda hoped to learn how to overcome the obstacles to bringing a fuel cell vehicle to a mass market. They must be learning a thing or two. The company plans a limited production rollout of the FCX in 2008, and expects to sell fuel cell vehicles to the general market by 2018.

Bradley Berman, editor of HybridCars.com, sat down with Steve Ellis, Honda manager of alternative fuel vehicles, at the auto show in Detroit.

BB: Honda has four years of experience with putting hydrogen fuel cell vehicles in the hands of ordinary drivers. Can you say with any certainty when fuel cell vehicles will be available to consumers?

SE: When people ask when hydrogen fuel cell vehicles will be relevant for the masses, you’ll often hear 10 to 20 years, or 20 to 30 years. It’s so vague and broad because there are still [technology and infrastructure] hurdles to cross. If breakthroughs come, that’s great—but without breakthroughs, it’s going to be slow incremental steps. This is a marathon. It’s not a sprint.

BB: Why is it so hard for the public to understand hydrogen fuel cells?

SE: The public knows two historical events related to hydrogen. And neither of them is very positive. First, there’s the Hindenburg (the German dirigible that exploded and crashed in New Jersey in 1937). Science has proven that the flames were sustained because of the coating of the covering on the Hindenburg. The fuel did exactly what it was supposed to do. It ignited and ‘flash,’ it was gone.

The other event was, of course, the hydrogen bomb. Scientists have said that it never should have been called the hydrogen bomb. Hydrogen had such a tiny part of it. Hydrogen in and of itself is not a bomb. It doesn’t explode like that.

People worry about the safety of hydrogen, but somewhere in America, today, there’s going to be a tragic accident in a gasoline vehicle. A fire department will respond. What will be the result at the end of the day? Nobody will do anything different. But it will take years and years for people to become as accustomed to hydrogen as they are with gasoline today.

BB: What is the public missing?

SE: People need to understand that hydrogen fuel cell vehicles are safe. We wouldn’t have handed the keys to the hydrogen car to an ordinary family if we didn’t think it was safe. And the public should understand that it’s zero emissions. Other technologies offer reductions, but hydrogen is the only opportunity for completely eliminating carbon emissions from the transportation fuel cycle.

BB: If advanced automobile batteries get better very quickly, won’t there be less of a need for a fuel cell vehicle?

SE: Regardless, the electric vehicle faces a charge-time issue that you don’t have with a hydrogen fuel cell vehicle. The greater the battery capacity, the longer it takes to charge. That’s the nature of the beast. You can refill a hydrogen fuel cell in the same amount of time as it takes to refill a gasoline car – about 3-5 minutes.

Of course, people say the economics of hydrogen fuel cell vehicles don’t make sense. The hydrogen fuel stations are $1 million per copy. Consider this: Large, public gas stations for natural gas vehicles were $1 million (each) when they first came out. Those costs have been driven down to $500,000 today, and can probably go much less when people target that in volume. The same thing will apply to hydrogen.

And if there’s some kind of doomsday in the future with oil, these higher-priced alternatives will be a bargain in comparison. It will not be about just the price of oil. It will be, plain and simple, the availability of oil.

BB: How does your fuel cell program compare to your competitors’ programs?

SE: They are not so much competitors as business associates. We all have to work on common themes, like refueling infrastructure, codes and standards, customer acceptance of the vehicles, and customer understanding of the safety of hydrogen. That’s important to all of us. At this early stage of the technology, its infancy, this is like a community of mothers nurturing all the children. We need everyone to succeed.

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