Fuel Cell Economics vs Batteries

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We’ve been hearing a lot about fuel cell electric vehicles (FCEVs) lately, thanks in large part to Toyota and its Mirai. But how does a FCEV really compare to a battery-electric vehicle (BEV) like the Tesla or a LEAF?  I wanted to look at the economics between FCEVs and BEVs, and then also make some guesses about infrastructure costs. Have a look and feel free to send feedback!

Fuel Cell Economics

There are a couple of main pieces that we have to look at when looking at the economics of fuel cells:

1. The actual cost of the fuel cell stack, which is the important bit that actually turns hydrogen into electricity.
2. The cost of the hydrogen fuel itself.
3. The cost of the fuelling infrastructure.

The fuel cell stack is actually not that horribly expensive. Prices would currently be about $55/kW… assuming massive economies of scale that don’t exist today — 500,000 vehicles per year.

So, to get a fuel cell stack that would be comparable to a Model S would cost about $17,000 (if FCEV production could somehow get up to 500,000 vehicles per year beforehand). That’s not really all that bad. But, there is a twist here. The fuel cell in cars actually degrades over time, losing performance. Right now, the state of the art fuel cell is losing about 10% performance after just 2,500 hours. That’s about 75,000 miles. Perhaps that’s not all that bad. After all, how often do you really mash the accelerator? (For the purposes of this discussion, let’s ignore how I drive). You’d think that. But what this really means is that your 10-year-old car is going to feel worn out. And it will be, with ever-decreasing available performance. It also means that one of the fundamental things people complain about regarding BEVs also applies to FCVs: Critical components fundamentally wear out, and will at some point require an expensive replacement, even with the best possible care. For comparison, it’s estimated that Tesla has already broken the $200/kWh battery cost, making the illustrious Model S 85 battery cost about …  you guessed it: $17,000. Now, yes, fuel cells will get cheaper, but Tesla is building a Gigafactory expected to drop costs by an additional 30%. That trend of decreasing costs won’t end soon for either technology. Given how well Teslas have performed, it may actually turn out that the batteries are more resilient than the fuel cells that hope to replace them, and at comparable cost.

The Fuel for Fuel Cells

The cost of fuel is the other issue with fuel cell economics. Electricity is relatively cheap, but hydrogen fuel is pretty expensive. Right now, state-of-the-art hydrogen extraction from natural gas, pressurized and delivered to the customer, costs about $4.50 for a gallon of gasoline equivalent (GGe). Since the fuel is derived from natural gas, and requires a lot of electricity to compress, store, and dispense, the net global warming potential reduction for the fuel is modest compared to hybrids like the Prius, let alone BEVs. Hydrogen production from fossil fuels is a mature technology because there are industrial uses for the gas. As a result, price reductions are unlikely. You can produce hydrogen from renewable energy, but costs escalate quickly. Right now, it’s between $6.00 and $11.00 per GGe. That’s actually assuming economies of scale that don’t exist right now. Yes, that’s right, your highly expensive new-fangled fuel cell automobile will also cost you between 3 to 5 times the current price for fuel, to actually make a difference in CO2 emissions, and it won’t actually do all that much better on that fuel than the Prius in terms of fuel economy.

The cost of fuel delivery infrastructure is the other doozy. Unlike a BEV, which can charge anywhere on the ubiquitous electrical network, fuel cells must be refuelled at a commercial station. As such, you need a lot more refuelling stations than you need Superchargers. It’s estimated that, to replace the existing gasoline infrastructure with hydrogen would cost about $500 billion. By comparison, Superchargers are only really used during road trips. And that lets me get to the fun stuff that triggered this post: Fermi estimation….

The Cost of a Complete Supercharger System

I wanted to get an idea of how much it would cost to get enough Superchargers available, within an order of magnitude. Do note: This is not an exact figure. It’s just supposed to be a rough estimate, to see where the chips land.

Assumptions:

• 1.6 billion person-trips per year in the US (according to US Travel)
• 2.3 person average occupancy in most cars
• Average trip distance = 760 miles (According to US Travel, again)
• Average range of a BEV = 250 miles (assuming Model S range or eventual vehicles that will have such range)
• 16 hours of usable time per Supercharger, and 30 minutes of time per charge to yield 200-mile range

• Car leaves home fully charged, and does not charge at destination
• Cost of a 4-stall Supercharger station at $100,000 (rumored price, not completely ridiculous)

Put this all together?

You need a net total of 150,000 Supercharger stalls, at a cost of about $4 billion. That’s right, friends, for roughly the cost of two B2 stealth bombers, we could have an amazing EV network, capable of letting everyone go on their road trips with reckless abandon. If the cost of Supercharger deployment falls, the price will fall quickly as well, which is also part of a trend of the falling cost of power electronics.

Another issue with my estimation? It assumes that all air travelers switch to going via road trip as well… Hey, if I had a Model S, you’d have to pay me to fly….