A Lesson for Electric Car Makers in Hydrogen Vehicles' Loss

For plug-in car and battery makers, there’s a lesson in the Obama administration’s recent decision to pull funding for research of hydrogen fuel cells for vehicles: Don’t rely too heavily on the dole for too long.

Hydrogen fuel cell vehicles, you may recall, formed a cornerstone of what Bush administration officials envisioned as a Hydrogen Economy. These days, many policymakers and Silicon Valley entrepreneurs alike are pitching the idea of a Clean Energy Economy, in which we get around in hybrid and electric vehicles that tap renewable energy from a smart grid, rather than the long-promised hydrogen cars.

As DOE chief Steven Chu explained in a briefing on the agency’s budget proposal, “We asked ourselves, ‘Is it likely in the next 10 or 15, 20 years that we will convert to a hydrogen car economy?’ The answer, we felt, was ‘no.'”

Based on that conclusion, the DOE decided to cut $100 million from its hydrogen fuel cell program for 2010 and start dedicating the research initiative to “fuel cell technologies” for buildings and other applications, with funding cut down to $68 million. (Separately, the agency awarded $41.9 million last month to 12 companies working on portable fuel cells for electronics, and larger fuel cells for both backup power and vehicles.) In a DOE report earlier this year, the agency found that fuel cell costs are still too high and durability too low for the auto industry to meet the goal set out in the Energy Policy Act of 2005 of 100,000 hydrogen fuel cell-powered vehicles by 2010.

The U.S. fuel cell industry is taking the cut as a sign that its energy will be better spent influencing Congress than the Department of Energy. “We aren’t giving up on Dr. Chu,” U.S. Fuel Cell Council executive director Robert Rose told the New York Times Wheels blog. While the DOE has been short-staffed, he said, “Congress will look carefully at this.”

But truth be told, a careful look would find an investment of some $1.2 billion over four years for development of an expensive, far-off technology and zero viable hydrogen vehicles on the market and few stations in the ground (only about 120 nationwide) to show for it, especially when it comes to hydrogen production and delivery systems — the core of any hydrogen highway. As the LA Times Up to Speed blog notes, Chu cited a lack of infrastructure as a reason to pull funding.

Of course, infrastructure remains one of the big missing pieces for mass adoption of plug-in vehicles, too. So now that electric and hybrid cars have curried government favor, the clock is ticking for their developers to cut costs, demonstrate progress — and pay their own way.

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