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Hyundai, which leases its fuel cell vehicles, is among the automakers investing in fuel cell technology.

A long-running joke in the auto industry is that fuel cell vehicles are the technology of the future—and always will be. But that may not ring true a few years from now.

Ford, Renault-Nissan, and Daimler today said they will jointly develop technology to make “affordable, mass-market” fuel cell vehicles by 2017, investing equal amounts into the effort. This partnership follows a similar joint development deal between BMW and Toyota announced last week and commitments to fuel cell vehicles by Hyundai and Honda last year. (See, Hydrogen Cars: A Dream that Won’t Die.)

By collaborating on the fuel cell stack and other system components, Ford, Daimler and Renault-Nissan hope to improve the technology and produce at a large scale. With a higher production volume, these automakers will get to economies of scale and offer more affordable cars, says Daimler board member Thomas Weber.

Fuel cell vehicles, which convert stored hydrogen into electricity on board, are getting more serious commitments from automakers because of improvements in the cost and reliability of fuel cell stacks.

Sales of battery-electric vehicles, such as the Nissan Leaf, are gated by the limited range they offer and the relatively high purchase price. By contrast, fuel cell vehicles can offer a longer range and fuel cell powertrains can be used on larger vehicles, Nissan board executive Mitsuhiko Yamashita says.

Fuel efficiency standards and carbon emissions limits set by governments around the world have prodded automakers to invest in new technologies. (See, Stringent CAFE Standards Push Automakers.) To lower the cost of development, automakers are creating a number of shared-development plans. Ford and Toyota, for example, have a partnership to develop hybrid powertrains for larger cars sold in North America.

Another factor helping advance fuel cell vehicles is the low cost of natural gas in the United States. Natural gas can be reformed into hydrogen, which can be dispensed at hydrogen stations in about the same amount of time as gasoline. A company called Nuvera is developing these fueling ports for fork lifts in anticipation of the larger passenger car market forming in few years.

But the lack of hydrogen fueling infrastructure means that fuel cell vehicles will likely be targeted at a few niche markets, such as fleet vehicle operators or environmentally minded consumers in cities equipped with a few hydrogen fueling stations.

And even though carmakers are showing more interest in fuel cells, the costs are substantially higher than conventional vehicles. If global collaborations can reduce the cost substantially over the next several years, the appeal of fuel cell vehicles would grow. Regardless of how quickly each approach is adopted, it looks like the auto industry’s route to electrification will ride on both battery-electric and fuel-cell vehicles.

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Tagged: Energy, Fuel cell, Ford Motor

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