Battery Electrical Cars Going Gangbusters, Hydrogen Vehicles Losing Momentum
China and India have very aggressive near-term battery electrified vehicle goals.
Daimler announced that the fuel cell no longer plays a central role in the company’s planning; its electrified vehicle program has won.
Five vehicle manufacturers proceed with hydrogen programs, but it is hard to see how they can challenge with momentum from battery electrical vehicles.
Battery electrical vehicles to predominate sales by 2030?
It is fascinating how quickly a revolution can take form. Here I argue that the battery electrical vehicle (BEV) has reached take off and that this is going to convert not only the car industry but also the oil industry. The implications for your energy and transport investments are becoming more evident.
Battery electrified cars in 2017
While the release of the GM (NYSE:GM) Bolt has been perhaps less dramatic than some had hoped, the momentum is building for the release of the Tesla (NASDAQ:TSLA) Model Three. Indeed there is so much hype about the Model Trio, that Tesla has an anti-marketing campaign (no test drives or advertising for 6-9 months) to quiet request, which shows signs of being very hot.
Meantime China resumes to set the scene and all of the signs are that it is showcasing “rough love” to make the industry stronger with fewer manufacturers. Big companies like BYD (OTCPK:BYDDY), BAIC (OTC:BCCMY) and Geely (OTCPK:GELYY) will most likely thrive, but many of the two hundred electrified vehicle manufacturers in China will fight. By cutting subsidies, the number of BEVs and plug-in hybrid cars sold in Q1 two thousand seventeen in China is down 5% over last year, but the plan is to grow production from
400,000 BEVs in two thousand sixteen to two million in 2020, and for clean cars to be 20% of sales in 2025.
India has even more dramatic plans to have 100% of cars sold in two thousand thirty to be electrical.
There is news of transformational switches planned all around the world. For example a latest report indicates plans to commence from scrape a fresh company to build a Gigafactory for automotive electrical batteries and to mass manufacture BEVs in Australia by 2020. By 2020!
Hydrogen fuel cell cars
In January thirteen leading energy and transport industry companies launched a global initiative, the “Hydrogen Council,” to foster a long-term vision for hydrogen powered vehicles. This included six car companies: Daimler (OTCPK:DDAIY), BMW Group (OTCPK:BMWYY), Honda (NYSE:HMC), Hyundai (OTC:HYMLF), Kawasaki (OTCPK:KWHIY) and Toyota (NYSE:TM).
Daimler: Less than six months later, Daimler has announced that hydrogen vehicles are no longer central to their long-term car plans. CEO Dieter Zetsche stated at an automotive Congress in March that the edge that hydrogen technology had over total battery technology (BEV) is dwindling. The key edge worried driving range and minimal refueling times. CEO Zetsche acknowledged that battery costs were rapidly declining while hydrogen fuel technology remains expensive. The company plans to release its hydrogen GLC SUV either at the end of this year or early next year for fleet operators, but the problem for commercial viability revolves around manufacture cost and availability of hydrogen produced through renewable technology rather than the existing source through natural gas.
Honda: A significant feature of a Honda Clarity sale is up to $15,000 of free fuel (for a 3-year period). In the US, it is available only in California.
BMW: BMW proceeds a dual BEV (BMW i3) and hydrogen vehicle (based on BMW 5Series GT) strategy with both BEV and hydrogen vehicles showcased at the two thousand seventeen Hannover Messe in late April as its “NewEnergy-4-Mobility2050” zero-emission initiative. This display involved a partnership with Shell (NYSE:RDS.A)(NYSE:RDS.B) concerning a hydrogen fuelling pump dispenser.
Hyundai: Hyundai is the very first auto maker to mass produce fuel cell vehicles and recently it extended its hydrogen thrust to include a Fuel Cell SUV concept car at the Geneva Auto Showcase.
Kawasaki: Kawasaki talks a good story concerning hydrogen vehicles.
Toyota: While Toyota has embarked on a BEV program, it resumes its Mirai hydrogen fuel cell car sales. Sales of Mirai in the US were seventy two in 2015, one thousand thirty four in 2016, and four hundred seventeen in January-April 2017. In Japan, there are one thousand seven hundred Mirai vehicles on the roads. These sales are based on very limited distribution networks and special 3-year deals on the hydrogen fuel. No one is paying for fuel at the moment.
In summary, major manufacturer Daimler already has effectively given up its hydrogen car program, while the other five manufacturers proceed with very petite numbers of vehicles focused on local hydrogen outlets.
Is there hope for fuel cell vehicles?
The “Hydrogen Council” which was established in Davos earlier this year, understood that there could be no hydrogen fuel cell car future without major government investment. Very recently five entities, Japan, Norway, South Korea, California US and Australian state South Australia, have shown signs of enhanced commitment to building hydrogen refueling networks. Indeed there is a big thrust in Japan to showcase hydrogen transport at the two thousand twenty Olympic Games. This will be a major challenge as by two thousand twenty I suspect that BEVs will be well entrenched.
I’ve made clear in several articles that I think BEVs are going to win this race because the momentum is enhancing at an astonishing rate, especially in China and India. I think this means that the companies that proceed with hydrogen vehicle programs will have to, like Daimler, eventually (and possibly fairly soon) give up their hydrogen vehicle ambitions.
The thicker issue is what 20% of fresh car sales in China being BEVs in two thousand twenty five and India having 100% fresh car sales as BEVs by two thousand thirty will mean for the oil industry. It embarks to look like the BEV projections of the oil and gas majors, which were substantially enlargened inbetween two thousand sixteen and 2017, will have to be totally rethought. This has major implications for your oil and gas company investments. Pay attention.
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