BMW Thinks Hydrogen Has A Bright Future. Here’s Why

Hydrogen fuel cell electric vehicles once seemed like the perfect way to move beyond petroleum. There are fueling stations just like the cars so many people know and love, but without the harmful tailpipe emissions. Toyota even bet big on the technology with models like the Mirai. But FCEVs were quickly overshadowed by what became a far more popular alternative: battery electric vehicles. As it stands, the hydrogen refueling infrastructure is crumbling in the U.S. whereas EVs are taking off.

The main roadblocks are the high costs of the fuel cells, limited hydrogen supply and the fact that transporting and pumping liquid hydrogen is much more difficult than expected.

In the U.S., California is the only state where hydrogen refueling stations are available, but those have been fading in numbers after Shell closed all of its seven stations earlier this year. As of September 11, there were only 43 stations currently operational in the state as per the Hydrogen Fuel Cell Partnership.

But German auto giant BMW is not ready to close the chapter on FCEVs. While not on the scale of Toyota, it has played with H2 concepts and R&D for years, and now things seem to be accelerating. BMW launched a pilot fleet of iX5 Hydrogen models in Germany last year; those cars use Toyota’s third-generation fuel cells. A production version of that model would arrive by 2028 and there could potentially be more BMW FCEVs after that.

At New York's recent Climate Week events, officials from BMW said three things could make FCEVs a viable alternative to EVs: a growing hydrogen infrastructure for commercial vehicles that passenger vehicles could benefit from, hydrogen’s “load balancing” role in stationary energy storage for excess renewable energy and the benefits of the tech in certain driving conditions.

It's crucial to note BMW is hardly giving up on EVs, and is actually doing better with them than many established automakers. And company officials have told InsideEVs in the past that hydrogen R&D spending is "a drop in the bucket" when compared to what it's doing with battery EVs. But that bucket may now be getting bigger as BMW explores options for the future. 

Federal Investments In Hydrogen
“When you build out stations for heavy-duty, building light duty gets cheaper and easier,” said Lewis Fulton, the director of the Energy Futures Program at the University of California Davis, who spoke at a panel on hydrogen hosted by BMW in New York City. The stations for heavy-duty trucks can be easily redesigned to accommodate light-duty vehicles, Fulton said.

For commercial vehicles and some other industries like steel and cement, hydrogen has garnered billions of dollars in federal investments to boost production and supply. The U.S. DOE released its National Zero Emission Freight Corridor Strategy in March, which laid out a plan to increase the share of battery-electric and hydrogen-powered trucks in the U.S.

The DOE plans to do this by supporting companies that will build “Regional Clean Hydrogen Hubs.” The Biden Administration, through the Bipartisan Infrastructure Law, has awarded $7 billion to establish these hubs, which are a network of clean hydrogen producers and connecting infrastructure.

The DOE has already started awarding projects to companies that specialize in producing clean hydrogen. Those projects span across the U.S., including Texas, North Dakota, South Dakota, Minnesota, Pennsylvania, Delaware, New Jersey, Illinois, Indiana and Michigan. Nikola has already sold 200 hydrogen-powered Class-8 rigs in the U.S., 88 of which were sold in Q3 alone.

BMW thinks that’s a solid foundation for light-duty FCEVs.

Hydrogen To Store Electricity
Another reason BMW thinks FCEVs could work is hydrogen’s role as a storage mechanism.

“Power has to be used when it is produced or it has to be stored. And grid-scale battery storage is very expensive,” said Jason Munster, the head of hydrogen consulting firm CleanEpic and the former director of analysis at the DOE’s Office of Clean Energy Demonstrations. Storing electricity by converting it into hydrogen is apparently more feasible.

EVs need massive investments in grid expansion. Munster cited the $6 billion Champlain Hudson Power Express transmission line from Quebec to New York City that is nearing completion after two decades. When completed in 2026, it's projected to provide 20% of NYC's electricity needs from hydropower. 

If grid expansion takes so long, making more chargers available for EVs could become a problem—that’s already one of the reasons why permitting processes for bringing chargers online takes years. (Although that’s improving and the U.S. is now adding 1,000 new chargers every week)

Where things get interesting is how excess renewable energy can be stored as hydrogen.

America’s energy output from wind and solar is expected to increase significantly in the coming years. The surplus electricity from renewable sources can be used to produce hydrogen through a process called electrolysis, which can then be stored and converted back to electricity to balance grid fluctuations during peak demand periods.

That’s what’s happening in California as documented by NPR. California produces excess renewable energy in Spring as it has more solar capacity than any other state.

When that happens, utilities in California can send the extra power over to a Chevron-Mitsubishi hydrogen plant in the Utah desert. There, the excess electricity is used to run machines called electrolyzers that split water molecules to make hydrogen which then gets stored in an underground cavern the size of the Empire State Building.

From here, the gas can be piped to the nearby Intermountain Power Project, which currently runs on coal but is soon expected to be powered by the world’s first gas turbine designed and built to operate on 100% green hydrogen to generate electricity.

The automaker also said the benefits of FCEVs in terms of real-world driving are clear. They indeed are, at least on paper, until you try refueling them.

FCEVs emit nothing but water, they’re better than EVs in cold climates as fuel cells remain consistent in cold temperatures and don’t risk losing efficiency and range. And lastly, FCEVs can do a better job at towing and hauling, similar to gas cars, minus the harmful emissions.

Unconvincing For The U.S., Viable For Other Countries
To tie all of this back to FCEVs that consumers in the U.S. will buy, drive and be able to easily refuel without breaking the bank is a huge stretch. Almost unrealistic given the current circumstances.

Experts at BMW's panel last week said the cost per kilogram for hydrogen production is expected to decline over time when produced at scale. But they had no convincing answer when asked if it would remain cheap by the time it reaches the consumer, after storage, transportation and logistics costs are factored in.

S&P Global said average hydrogen prices at California pumps reached a record high in September at $33.49 per kilogram (2.2 pounds). One kg of hydrogen contains about the same energy as one gallon of gas and also delivers a similar efficiency. As per the DOE, they can deliver over 60% efficiency theoretically but in the real world they’re nowhere near that.

EVs, on the other hand, can convert over 90% of the battery energy into mechanical power at wheels—they’re by far the most efficient.

Plus, America is already deeply divided on electric cars. EV sales are increasing, but not without extreme polarization and politicization. Throw in another propulsion type there and it’s anyone’s guess how consumers would react. On his campaign trail, former president Donald Trump is already villainizing hydrogen by saying inaccurate things like “It will blow up. And when it blows up, you are not recognizable.”

Plus, only 43 hydrogen stations are active in California at the moment. By comparison, there are more than 47,000 Level 2 and DC fast charging ports for EVs in the state, as per the Alternative Fuels Data Center. That explains why people are buying Teslas and not Toyota Mirais and Hyundai Nexos.

BMW isn’t the only one keeping FCEVs on standby. Toyota, Honda, and Hyundai aren’t giving up on hydrogen either. Honda recently launched the CRV e:FCEV in California, a plug-in hybrid that can run on both, a rechargeable battery and hydrogen tanks. The next-generation Hyundai Nexo is also undergoing testing, local reports from Korea suggest.

Hydrogen also seems more promising beyond the U.S. Europe now has more than 250 hydrogen stations, China has an estimated 197 stations, Japan and South Korea both have more than 160 stations online, according to H2Stations.org, which tracks the deployment worldwide. BMW sells more cars in China and Asia than any other region.

In Europe and Asia, fuel cell technology could be a small part of the electrification mix, but in the U.S., it's a gamble that may never pay off. Hybrids, EVs, and PHEVs are slowly winning hearts here—FCEVs may not complement them in any meaningful way anytime soon.