The enthusiasm for hydrogen as the fuel of the future is waning, as hydrogen projects get canceled and hydrogen prices skyrocket. Those who invested in Fuel Cell Electric Vehicles (FCEVs) like the Hyundai Nexo or Toyota Mirai are facing a harsh reality check.
Despite the proven superiority of battery-electric vehicles in replacing internal combustion engine (ICE) vehicles, some still cling to the hope of a miracle fuel saving the combustion engine. Hydrogen, with its promise of carbon-free burning, initially seemed like a perfect solution, given its abundance on Earth. However, reality has not been kind to hydrogen proponents.
Hydrogen vehicles remain rare due to their exorbitant prices, and hydrogen production, transportation, and storage have proven to be nightmarish challenges. Consequently, hydrogen refueling stations are limited to small areas, such as California in the US, and the cost of clean hydrogen makes little economic sense. Nevertheless, car manufacturers like Toyota have invested heavily in hydrogen vehicle development, with the Toyota Mirai being a common sight in California thanks to substantial hydrogen refueling subsidies.
Shell, the world’s largest oil company and a significant hydrogen fuel supplier, has been closing car-focused hydrogen filling stations worldwide. In August, Shell announced the closure of all its car-focused stations in California, retaining only three heavy-duty stations. Even plans to build 48 new hydrogen filling stations in California, backed by a $41 million grant, were scrapped by Shell due to “political and economic uncertainty.”
Building a hydrogen filling station costs around $2 million, but with only 17,000 hydrogen-fueled cars sold or leased in California, recouping the investment seems unlikely. This has led to higher hydrogen prices, making FCEVs more expensive to operate.
California’s largest hydrogen retailer, True Zero, raised hydrogen prices to $36 per kilogram, a 20% increase from $30. In April 2021, the same stations charged $13 per kilogram. Consequently, owning an FCEV, even with incentives like Toyota’s free hydrogen fuel offer, becomes costly compared to electric vehicles (EVs).
Comparing a Toyota Mirai with a Tesla Model 3, the Mirai’s operating cost is significantly higher. The Mirai costs $202 to fill its 5.6-kilogram hydrogen tank, resulting in roughly $0.50 per mile traveled, while the Model 3 costs $0.036 per mile to fully charge its 60-kWh battery.
As the world shifts away from fossil fuels, the price of refueling ICE vehicles is expected to rise dramatically. Oil companies, realizing this, are embracing hydrogen as a fuel and natural gas replacement. However, some, like Shell, are investing heavily in EV charging stations, recognizing the growing dominance of electric vehicles.