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15th November 2007

Since the announcement of the sale of Ballard Power Systems’ automotive fuel cell business to Daimler and Ford, a number of analysts have been quick to condemn the automotive fuel cell industry in general, asserting that if one of its standard bearers has been unable to last the course, then they can have little confidence that the technology is approaching market readiness.

This is perhaps too harsh a judgment, in Fuel Cell Today’s view, expressed in its latest newsletter. Whilst the industry now freely admits past culpability on the charge of over-hyping and under-delivering on fuel cells in transport, it has for some time been much more cautious in its market development projections.

The developments at Ballard are indeed significant for the fuel cell industry as a whole, but not necessarily in a negative way. Perhaps what we are seeing is evidence of the process of consolidation that often precedes the establishment of any new market, rather than merely a company falling by the wayside because the race it has chosen was too long.

It could be a positive sign for the industry, as the economies of scale needed to make automotive fuel cells a commercial reality could be achieved sooner. Coming as it does at a time when manufacturers in Japan, in particular Honda, are announcing plans to commercialise fuel cell vehicles, it seems that the big US and European motor manufacturers are having to raise their game to compete in the nascent fuel cell vehicle market (as GM has recently explicitly stated). Although commercialisation may be achieved soon in some applications, fuel cell vehicles are still some way from profitability. The new investment by Ford and Daimler should mean that the auto assets get the long-term backing required to become successful.

- Fuel Cell Today also reports that Honda has begun the process of developing a solar-powered home hydrogen production system for drivers of its future fuel cell cars, within the next decade.

(www.fuelcelltoday.com)

- Volkwagen has presented a space up! blue FCV concept at the current Los Angeles Auto Show (November 14-25) featuring the world’s first high temperature fuel cell, an array of twelve lithium-ion batteries, and a solar roof panel. (See separate news story in today's bulletin.)