Two fuel cell collaborations were announced the same week in January that the hydrogen energy market was projected to be worth over $180 billion by 2050. Toyota and BMW announced a joint project to develop an automotive fuel cell system, including a fuel-cell stack, hydrogen tank, motor and battery, to be completed in 2020. Daimler AG, Ford Motor Company, and Renault-Nissan, also announced a project to develop a common fuel cell system.
Both collaborations are signs that the private sector fuel cell vehicle industry is developing and hydrogen infrastructure is growing globally. As quoted in the Wall Street Journal, "The [Daimler-Nissan-Ford] collaboration sends a clear signal to suppliers, policy makers and the industry to encourage further development of hydrogen refueling stations and other infrastructure necessary to allow the vehicles to be mass-marketed," Renault-Nissan, Ford and Daimler said.
Once the Daimler-Nissan-Ford fuel cell system is developed, each company will proceed to launch its own affordable mass-produced fuel cell electric vehicle (EV). This could happen as early as 2017, and be the first fuel cell cars to be produced this way. The Toyota-BMW project has the additional goal to further develop hydrogen infrastructure codes and standards.
The largest challenge in the production of commercialized fuel cell EVs is the high cost of production and engineering. Daimler, Ford, and Nissan are all equally investing in the research and production of this project which results in lower individual cost for the companies while still achieving the large end results. Toyota and BMW are not planning for capital tie up. BMW is also providing BMW-made diesel engines to Toyota beginning in 2014 due to BMW’s need to cut carbon emissions, a declining diesel engine market in Europe, an increasing diesel market in Asia, and engineering skills from Toyota to help with battery research.
By combining forces, these companies increase the breadth and depth of their familiarity with fuel cells. Daimler, Ford, and Nissan will have 60 years of experience working with fuel cells between them, and 6.2 million miles traveled by fuel cell test vehicles.
Daimler, Ford and Ballard have pursued a strategic alliance since 1997, formalized in 2008 as Automotive Fuel Cell Cooperation (AFCC). In February 2013, Ford took over Ballard’s share of the company. Renault-Nissan will not join the AFCC but the newly announced partnership will benefit from the AFCC’s successes. AFCC supplies the fuel cell systems for all 17 of Daimler’s Evobus fuel cell bus deployments in Europe under the CHIC project.
Collaboration on fuel cell system commonality appears to be one solution to overcoming the cost challenges of fuel cell EVs. Fuel Cell Today’s January Analyst View outlines several recent supply change integrations within the industry that will likely assist with market growth and increased benefits from economies of scale. The analysis concludes that mergers within the fuel cell industry will continue as a way to exploit the best technology and reach commercial cost targets.