Funding for green hydrogen startups, especially those in growth stages, is decreasing. Hydrogen plants and fuel stations across the United States have been shut down. And automakers and governments seem to be getting on board with the battery electric vehicle (BEV) conversation.
Still, BMW recently announced plans to work with Toyota to develop a hydrogen fuel cell consumer vehicle for mass production in 2028.
Despite the challenges of hydrogen, BMW believes that the only way to actually achieve the transition to zero-emission transport is to combine BEVs with hydrogen vehicles. And that’s a view shared by other industry experts.
Jürgen Guldner, BMW’s general project manager for hydrogen technology and automotive projects, told TechCrunch that hydrogen vehicles will support the growing BEV market by addressing the needs of customers who cannot or do not want to own a car. He (and his employer) said he believes they can complement the company. You can charge your car like a phone.
Speaking at a BMW event during New York City Climate Week, Guldner said hydrogen cars could offer a “best of both worlds” scenario, with no refueling convenience like traditional gasoline-powered cars. He said that customers can enjoy the benefits of high speed and electric driving.
“If you want to change people’s behavior, it’s always better to give them options than to just take something and say, ‘Here’s the solution.'” Now you have to accept that. Guldner said.
Jason Munster, president and founder of hydrogen consulting firm Clean Epic, added that a combination of BEVs and hydrogen fuel cell vehicles is more cost-effective and sustainable. “The thing about battery electric vehicles is that the more you connect them to the grid, the higher their marginal cost goes,” Munster told TechCrunch. “Many places now have excess capacity on the grid, so we can add fast chargers to the grid.”
Still, the challenges remain significant.
Hydrogen infrastructure is expensive to build and is far less developed than battery electric infrastructure. To claim zero emissions, hydrogen must be produced using renewable energy rather than fossil fuels. Both Münster and Guldner argue that this is possible if the entire ecosystem is considered.
Munster talked about what went wrong with the rollout of Toyota’s Mirai hydrogen car in California, saying, “It’s not enough just for (hydrogen) filling stations and car companies to work together.” Although the state has the most hydrogen stations in the country, there aren’t enough of them for most Mirai owners to easily refuel.
“We won’t be able to replicate the success that battery electric has had unless all parts of the chain – production, distribution and end-use – are in the game and there are contracts where there are real penalties,” Munster said. Ta. .
Guldner said BMW is working to create such an ecosystem, including driving demand through potential partnerships with commercial vehicle customers. BMW has been testing hydrogen vehicle test vehicles in more than 20 countries for the past 20 months and has received positive feedback so far, Guldner said.
The automaker is also working with Urban-X, a tech startup platform and VC firm by Mini, to find companies that can fit into the hydrogen equation.
Arguments against the VC model
Munster said the VC model is ultimately not well-suited for hydrogen projects because of the long-term payback and high capital requirements.
The Biden administration’s Inflation Control Act (IRA), signed into law in August 2022, includes tax credits for clean hydrogen production. But two years later, the lack of clarity on guidance is “preventing the hydrogen industry as a whole from experiencing” the boom that the battery industry has experienced, Munster said.
He said the IRA’s initial guidance on hydrogen financing was “controversial”, “limited” and “not finalized”. The “three pillars” of the IRA hydrogen tax credit are incrementality, time alignment, and availability. In other words, the goal is to require new dedicated renewable energy to power the electrolysis process (separation of hydrogen and oxygen molecules to produce hydrogen), and to ensure that hydrogen production is free from emissions. The aim is to ensure that this leads to a reduction in volume.
Because these three pillars are strict, it is difficult for companies to qualify for subsidies. Munster concedes that fossil fuels from the grid will power existing electrolyzers (devices that perform electrolysis) in the short term until a more robust renewable energy ecosystem is developed. , proposes more relaxed rules.
The total amount of subsidies is also unknown, and could be between $30 billion and $300 billion.
“It’s really giving everyone pause around the expansion plans based on how big this grant ends up being,” Munster said.
