Zero Emission Fuel Cells Article by Nicolas Pocard
Feb. 11, 2022
The cost of fuel cell vehicles has been falling sharply for years. Over the next 10 years or more, this proportion will continue to decline.
In today's article, we will share what factors are causing the price drop. You'll also learn what Ballard is doing to ensure that fuel cell vehicles are cost-competitive with pure electric and diesel vehicles by 2030.
Let's find out!
Why has the cost of hydrogen fuel cells fallen?
Even with limited production, the price of fuel cell vehicles — especially buses — has fallen by 65 percent over the past 10 years.
What caused the price drop?
As far as fuel cells are concerned, the main advances to date have been driven by technological innovation and product improvements. With decades of experience, Ballard has been able to achieve these results based on a combination of industry-leading durability and reliability.
A good example is Ballard's eighth-generation fuel cell power module. The total life cycle cost of the recently launched FCmove™ products has been reduced by 35% compared to the previous generation. In fact, with each new generation of new products, our costs continue to decrease by more than a third.
In addition, there are a number of other factors that can help reduce the overall cost of fuel cell electric vehicles, including:
Hydrogen storage tank prices are lower
Reduced prices and improved integration of the vehicle's electric powertrain
Fuel cells — hybrid fuel cells for cars — combine smaller fuel cells with lithium batteries, and their prices have also been falling
What is the total cost of ownership of a commercial fuel cell vehicle?
Today, in some regions, the total cost of ownership (TCO) of fuel cell electric buses is comparable to that of pure battery electric buses. The bus in the European H2Bus project is one of the lowest TCO buses for zero-emission vehicles in some regions.
In addition, Deloitte-Ballard's recent report, "Driving the Future of Mobility," and a McKinsey study released by the Hydrogen Council, predict that using fuel cell vehicles will be cheaper than using batteries or diesel vehicles over the next 10 years.
Looking at infrastructure costs, take fuel cell electric buses as an example, where today's higher vehicle purchase costs are offset by lower costs of large-scale refueling infrastructure. For example, the infrastructure cost of fuel cell buses decreases with the number of buses, because 100 or more buses can share hydrogen infrastructure at the same depot.
Conversely, as the number of all-electric buses deployed in each warehouse increases, so does the infrastructure cost per vehicle due to the need for more electricity.
In addition, the cost of hydrogen fuel is falling. The production of low-cost renewable energy sources has made the production of green hydrogen at prices on par with diesel in some regions.
Since 2010, the cost of electrolysis to produce hydrogen has fallen by 60%, from $10-15 per kilogram to $4-6 today. Recent industry reports show that they will continue to decline; Between now and 2030, the cost of offshore wind electrolysis technology will be reduced by another 60%.
How does production play a role in reducing fuel cell costs?
According to a McKinsey study, "Considering that the annual production of fuel cell vehicles is 150,000 units, it will be possible to reduce costs by about 70-80%. ”
Similar reductions can be achieved in the PEM stack and factory fuel cell balance. Even with a relatively small annual production of only 10,000 trucks, manufacturers can get about 60-65% of the cost of fuel cells significantly reduced.
This is consistent with the findings of the Deloitte-Ballard report. We are confident of lowering the price of fuel cell systems, competing with diesel engines, and achieving the U.S. Department of Energy's goal of producing more than 150,000 systems per year, at less than $100/kW.
This cost reduction will be driven primarily by the industrialization of fuel cell systems, as fuel cells are less dependent on commodities than batteries. In contrast, fuel cell systems are mainly produced from components made of carbon, steel and aluminum.
How can Ballard accelerate the price cuts further?
At Ballard, we plan to further reduce the cost of fuel cell systems in four key ways:
1. Establish industrial strategic partnerships to accelerate the process of industrialization
The industrial production of fuel cells has huge potential to reduce costs.
Today, only a few thousand fuel cells are produced. The production of fuel cells is very low compared to the hundreds of thousands of batteries and millions of diesel engines being produced.
This is one of the reasons why we partnered with Weichai, China in 2018. Weichai is a large industrial enterprise that produces hundreds of thousands of diesel engines every year.
Part of Weichai's mission in collaboration with Ballard is to help us accelerate the industrialization of fuel cell products so that costs can continue to be reduced and provide attractive total life cycle costs for car operators."
2. Leverage supply chain development to acquire different suppliers
At Ballard, we are continuing to develop our fuel cell supply chain, particularly in our joint venture with us in China. These partnerships will give us access to new suppliers and a very different supply chain, which will ensure that we can further reduce costs.
In addition, the automotive supply chain is currently developing low-cost and reliable fuel cell powertrain components. This includes balancing the key elements of the plant, which will have a significant impact on the cost of the overall system.
3. Focus on internal projects to reduce our fuel cell stack costs
Internally, Ballard is continuing to improve our processes, membrane electrode assemblies (MEAs), and fuel cell stack designs. We are also focusing on technological innovations to increase power density and reduce precious metal catalyst loads on fuel cell stacks.
We've made three key improvements in these areas:
Choose low-cost carbon instead of metal to make our bipolar plates (learn more in this blog)
Automate production lines to reduce labor costs and improve production capacity
Implement process design and capacity expansion to increase production and support future growth
4. Improve our recycling and refurbishment process
Our ability to recycle catalysts, reuse bipolar plates, and refurbish fuel cells is a real advantage for both Ballard and our customers. Doing so reduces the total life cycle cost of our products, reduces the environmental impact and generates residual value for the vehicle.
As a result, the economy has improved, which suggests that fuel cell technology is becoming a bank financing for cars.
The final idea
The cost of fuel cell electric vehicles is on a downward trend, and with the expansion of industrialization, the potential for further cost reduction is huge.
Today, in some specific use cases, the total cost of ownership of commercial fuel cell vehicles is comparable to that of pure electric vehicles, and by 2030, it will be lower than the cost of pure electric vehicles and diesel vehicles.
At Ballard, we are committed to achieving ambitious and achievable cost reductions by focusing on internal processes, technological innovation and strategic industrial partnerships.
Founder of Ballard and Hydrogenic, Hydrogenic was later acquired by Cummins
We are excited to enter the new decade as fuel cell technology will dramatically impact the mobility landscape, creating a more positive, cleaner and more sustainable future for all."
"The transition from a gasoline economy to a hydrogen economy will require the combined efforts of academia, government and industry. These forces are taking shape and making progress. It is important not to impose such significant changes on countries that are unwilling to participate, but to let us all work together to find an economically viable path to change. ”
—Jeffrey Ballard (1932-2008)
Over the years, with passion and determination, Ballard has become a leader in PEM fuel cell technology, offering products and services with the power to change the world
Fuel Cell Price to Drop 70-80% as Production Volume Scales (ballard.com)