Monday, February 07, 2005

FT talks to Larry Burns

More publicity for Larry Burns and GM:
One big problem is cost. Fuel cell units are 10 times more expensive to make than petrol or diesel engines. The other is the lack of a refuelling infrastructure, which will need huge investment to create.

The fuel cell vehicle does not look like sharing the fate of the battery-powered car, which was 'just around the corner' for almost a century. But some other leading carmakers suggest it will be nearer 2020 before fuel cell cars start to reach the market in big enough numbers to begin affecting demand for oil even slightly.

Firstly, Cost and infrastructure are the right problems, but by no means the only problem. Since ICE vehicles are such a well developed technology, it is not good enough for Fuel Cell Vehicles (FCVs) to be comparable to them, but FCVs will need to do better to succeed. They may have to offer other attributes that current ICEs don't offer.
Secondly, it is hard to think that FCVs will make a big difference in oil consumption by 2020. Even if the FCVs are able to break 2% market share by 2020, I would consider that a pretty good deal. Just think about it this way. The Toyota Prius and Honda Insight were launched in 1997. This is 2005 and the current market share of hybrids is a little less than one percent. That is 8 years to get to one percent! Fleet turnover is a slow process and it is hard for new vehicle technology to break in.


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