Hydrogen Fuel Cells May Be Tesla's BiggestFuture Sales Threat
Competition from other manufacturers with BEVs could equal the impact fuel cell electric vehicles (FCEV) could bring toTesla from now until 2020.
FCEV cars from Toyota and Honda available inCalifornia are incredible bargains measured against the Model 3.
Elon Musk likes to disparage hydrogen fuelcells but they are getting serious support from unlikely sources.
Hydrogen is a growing factor not only incars but in long-distance trucking as well.
The only thing restricting FCEV growth arefueling station networks. A position similar to Tesla five years ago before its"Supercharger" network, which today only has just over 1,000 globallocations.
First, let's clarify something I often findasked on the internet. Hydrogen gas is NOT a fuel, not often used with internalcombustion engines mainly due to cost. Gasoline is much cheaper, abouttwo-thirds cheaper. Hydrogen gas is used in transportation as the"fuel" in fuel cells that gets converted into electricity to powerelectric motors. Gasoline and diesel fuel cannot be used in fuel cells. So thetwo most common ways to power electric motors in cars and trucks today are batteries and hydrogen fuel cells. Batteries have been getting the most pressand have enjoyed a big head start. But quietly, behind the scenes, thelandscape is shifting and hydrogen is on the move.
Batteries for use in cars and trucks areheavy and expensive. Tesla (TSLA) will not disclose the cost of a replacementbattery pack or electric motors for its vehicles. Any Tesla replacements required up until now have been done under warranty. In reviewing Teslainvoices posted to the internet they never disclose the costs attributable toany repairs done under warranty. GM (GM) quotes the battery pack replacementfor the Chevy Bolt at $15,734.29.
Part of the high costs of batteries are thematerials that go into them which are on the rise. The linked New York Times article from last week quotes the following:
PRICE OF COBALT:钴的价格：
Up 115 percent this year 今年上涨了115%
PRICE OF LITHIUM:锂的价格
Up 45 percent 今年上涨了45%
PRICE OF GRAPHITE:石墨的价格
Up 30 percent 今年上涨了30%
In an effort to achieve Elon Musk's questfor a "greener" planet one has to question the effectiveness of batteries. The idea was to get away from fossil fuels that emit CO2 into the atmosphere. So with batteries, we are still mining for minerals using heavy equipment that burns diesel. The raw ores must still be further refined and shipped to battery cell manufacturers. More fuel burned. More CO2 released. Thesame CO2 that traps heat from the sun contributing to global warming.
The most serious issue facing batteries for global automakers like Tesla is the Chinese advantage.
But manufacturers are also dealing with a geopolitical dimension. Three-quarters of the world’s reserves of lithium, a crucial ingredient in the most common kind of electriccar battery, are in China and Chile, according to the United States Geological Survey. As demand surges, China could deploy its natural resources as adiplomatic cudgel the same way that Saudi Arabia uses oil." (NY Times Dec 18, 2017)
Is it any wonder theChinese government is fully behind the effort to globally replace gasoline anddiesel engines with battery electric vehicles (BEVs) or as China calls them NewEnergy Vehicles (NEVs)? While this would be great for China, it could prove tobe a future disaster for all other auto manufacturers.
Hydrogen fuel cells 氢能燃料电池
Producing unlimited amounts of hydrogen isas simple as two ingredients: Water and electricity. Hydrogen is extracted fromwater in a process called electrolysis. According to the U.S. Department ofEnergy "...a fuel cell coupled with an electric motor is two to three timesmore efficient than an internal combustion engine running on gasoline."
Hydrogen production to power fuel cells isabout where BEV charging was five years ago, but ramping up faster. Forcompanies like Tesla, this growing energy source could represent a blow to sales of those vehicles dependent on batteries to store and generate power torun electric motors. The bigger problem for Tesla is they are a one-act show.They only build BEVs. Every other major manufacturer gets the bulk of theirprofits from ICE sales. They are spending some of those profits in developing alternatives to ICE, but none have staked their entire existence on BEVs asTesla has done.
Where Tesla has had to foot the bill to getits Supercharger network built, the growing global hydrogen network is getting much broader support even from the oil and gas industry itself not wanting tobe left behind in the adoption of cleaner and more efficient energy generation.
One differentiating factor in the auto andtruck industry is in the refueling time. Car and truck fill-ups using hydrogengas are completed in about the same time it takes to fill a gasoline or dieseltank - under 10 minutes. That is a huge advantage to the 40-60 minutes even Superchargers need to recharge a Tesla lithium-ion battery pack. The most popular method, home charging, takes hours overnight.
New Advances in Hydrogen Generation制氢方面的新优势
Unlike coal, oil or natural gas, methaneand hydrogen can be generated in naturally occurring processes. Methane gas is a natural byproduct of landfills that's being captured and used to heat and power businesses. Hydrogen can be generated at will and on-site by separating theoxygen and hydrogen molecules in water using an electrolyzer.
CNBC recently reportedon a Swiss hydroelectric plant being used to power a hydrogen generation plant.The hydrogen is compressed in a trailer tank and periodically moved to avehicle refueling station to be downloaded into station storage tanks. This isjust one example of renewable energy being used to generate hydrogen forvehicle fueling.
British firm ITM Power PLC (OTC:ITMPF)builds and sells hydrogen fueling stations designed to generate hydrogen gason-site for car, truck and bus fueling in the United Kingdom.
Nikola Motors(private), builder of the proposed Nikola One and Two Class 8 semi trucks hascontracted with Oslo, Norway,-based Nel ASA to build its initial 16-stationhydrogen refueling network here in the U.S. The purchase order for the first two stations has already been issued. While mocked by many as ineffective Nikola may be on to something big.
Nikola公司，Nikola One和 Two Class8的半挂卡车的生产商，和挪威的位于Oslo的NELASA公司签订了合同，帮助其在美国建立最初始的16个加氢站。前2个加氢站的订单已经生成。尽管有很多人想看Nikola的笑话，心想他们可能做不出什么大事儿来。
Nikola's proposed network will allow themto sell hydrogen to car and truck users outside their own group of buyers fromthe outset, creating another new revenue stream. Profits will help offset thecosts of building their network. Nikola is looking to use electricity from renewable sources at each site being considered.
The advantages of these types of refuelingstations is their ability to generate hydrogen during off-peak hours when electricity rates are lower and store the hydrogen in tanks to be dispensed atwill 24/7. linked to a solar or wind farm stations can generate hydrogen atzero cost, near zero CO2 generation. They also can reduce the size of expensivebattery packs in cars and semi trucks where the weight of batteries is acritical limitation in range or payload.
Tesla's proposed Semi is expected to carry800kWh or more of batteries to achieve just 500 miles of range. The Nikola Onelong-distance truck will have a range of 800-1,200 miles running on easily refuelable hydrogen tanks and a 320kWh battery pack that never needs to beplugged into a charger. The Nikola One also cuts about 2,000 lbs off the weightof a comparable fully fueled diesel semi. We are still waiting for Tesla toannounce the weight of their Semi.
特斯拉提议说其半挂卡车预计能携带800kWh或是更多容量的电池，行驶里程为500英里。Nikola One长途卡车行驶里程为800-1200英里，有着320kWh的电池组，不需要充电器。Nikola One的重量比柴油半卡还减少了约2000磅。我们还在等着特斯拉宣布它们的车身重量。
Royal Dutch Shell is supporting hydrogen. 壳牌石油支持氢能的发展
Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B)seems to not be taking any chances. They are playing the long game inalternative energy solutions. They have been working with BMW's Designworks ona new and futuristic station design. This short video shows the idea behindthis process of using otherwise lost excess power from renewables to create anduse hydrogen at what could become large savings.
The concept is even more appealing today aswe expand the amount of solar and wind power being generated. It is becomingcommon to see windmills shut down on windy days because the grid cannot acceptthe additional energy. I saw this routinely up in Montana. This means lost revenue to the company that owns the wind or solar farms. Finding new ways toabsorb/sell this extra power is a better solution for everyone. With the conversion to easily stored hydrogen, stations can take advantage of the lowes available electricity rates and store the created hydrogen in tanks for lateruse. Batteries cannot be filled beyond their much smaller capacities.
Shell with hydrogen stations in operationin California, England and Germany has taken quite a lead over other oilcompanies in finding ways to put available clean energy to use. Shell takesabout two months to construct a hydrogen station that can be located at existinggas stations using an area about the size of a tennis court.
Eleven Japanese companies, includingautomotive giants Toyota, Nissan, and Honda, and oil companies JXTG Nippon Oiland Idemitsu Kosan, have signed an agreement to form a new company in thespring of 2018, aimed at the full-fledged development of hydrogen rechargingstations (HRS) for fuel cell vehicles (FCV)." (FuelsandLubes.com 12/21/17)
Even the U.S. Department of Energy is inthe act to promote hydrogen. On January 19, 2017, they awarded a $1 millionprize to the developers of a new, compact hydrogen fueling station called SimpleFuel. The energy department is convinced that hydrogen fuel cells andbattery electric vehicles are the best ways to get U.S. drivers off gasoline.The lacking ingredient they feel is a hydrogen fueling network.
At current counts from the U.S. Dept. ofEnergy, there are 39 public hydrogen stations in four states (CA, MA, CT andSC). 34 more are planned for 2018 in 6 states (NY and RI will be adding publicstations in 2018). There also are 24 private H2 stations across eight additional states with seven more stations planned for 2018. (TX, IL, MI, OH,MD DE, PA, and NJ). That is a total of 104 that are known to be planned by theend of 2018. That number will grow once Nikola announces the locations they arechoosing for their network rollout.
Clean Energy Fuels (CLNE) already hasteamed up with Pilot/Flying J travel centers to install CNG/LNG refueling pumps on existing sites. The opportunity and space exist at these same locations toinstall hydrogen generating stations for use by both cars and trucks.
Tesla will be at a disadvantage for tworeasons. 1) They built a Supercharger network that could only support cars. Sonow they need another entire network for trucks. 2) Because of the time ittakes to recharge batteries. In the time it will take a Tesla"Megacharger" stall to power up one truck for 400 miles, a hydrogenstall could have fueled 2-3 trucks for an average of 1,000 miles, and can beoperated at peak efficiency 24 hours a day. Tesla will need late-night/earlymorning recharging to minimize electricity costs they have guaranteed to their customers at just $.07/kWh.
Outside the U.S. 美国以外的国家氢能发展的状况
Sofar we have just been talking about the activity in the U.S. Let's shift now toChina where on Christmas Eve it was announced that an investment of $1.75billion USD (11.5 billion yuan) will be spent to build the country's firs tresearch and production business park for hydrogen fuel cells, according to authorities of the Wuhan Economic and Technological Development Zone, in Hubei Province. Their focus, for now, is on fuel cells for generators and coaches(buses).
Europe is further ahead in the expansion ofhydrogen refueling stations than we are here in the U.S. as you can see lookingat this map, and for good reason. Gasoline is much more expensive there. Dieselautos are more plentiful than gas cars due to fuel costs and mileage ratings.In the first half of this year gasoline-powered car sales exceeded diesel salesin Europe for the first time since 2009 because of the revelations of true diesel emissions. The backlash also has fueled sales of "alternative"vehicles which rose by 35% in the first half of 2017.
Americans are in no rush to look for alternative fuels because we are not feeling the pain of $5-6/gallon gas. Dueto our wide open spaces, smog is hardly an issue anymore because of thelowering of emissions we have achieved to date.
Toyota, Honda and others are quietlygearing up on hydrogen vehicles.
Toyota (TM) builds and sells the Mirai herein the U.S., Japan, Europe and the United Arab Emirates. U.S. Sales in 2017 areup 50% over 2016 but remain largely limited to California due to a lack of hydrogen infrastructure. That picture should be changing in 2018.
Not to be left out, Honda (HMC) is in thegame as well with three versions of its Clarity model. A battery electric BEV,a PHEV plug-in hybrid with a gas engine, and the FCEV hydrogen version.
Both the Mirai and Clarity FCEVs qualifyfor the much higher California CVRP rebate of $5,000 vs. $2,500 for BEVs or$1,500 for PHEVs.
Toyota's Mirai is $349per month for 36 months, $2,499 due at drive off and includes $15,000 of freehydrogen as well. Incredibly, if you purchase a Mirai (which qualifies you forthe $7,500 federal tax credit) Toyota will throw in another $7,500 in"purchase support." You still get the $15,000 of free fuel and the$5,000 California rebate. So either one is a budget-minded commuter's version of heaven.
There's an even more compelling case forhydrogen. Steven Beatty, managing director of Toyota Canada, said in aninterview last year:
It offers a driving experience that’s verymuch like the car that you have in your driveway today — the quick fill-ups,the long range, the overall performance of the vehicle is very similar,” hesaid, adding that these characteristics make hydrogen more reliable thanelectric for long-range trips.
We’re standing right on the threshold ofwhat I think is a revolution in the auto industry.” When you compare these cars to the newTesla Model 3 there's going to be some resistance from Tesla buyers. The Model3 has no advertised lease programs at this time. With the current models costing $50,000 and up, the car is hitting buyers wallets for around $800-plusper month on a 60-month loan. The Model 3 buyer does not get free access to theSupercharger network as the Model S and Model X currently do. (That privilege will expire for new owners of those cars at the end of January.)
“我们正站在汽车行业的革命性的门槛上”。当你把这些汽车跟新的特斯拉Model 3相比较的时候，特斯拉的买家们可能就会遇到些阻力了。特斯拉Model3 目前还没有做广告的计划。目前该车型的售价是5万美元，如果贷款60个月的话，每个月要还800多美元。但Model3的买家，不能像Model S 或是Model X那样免费接入特斯拉的超级充电桩的网络。（2018年1月底这些新车主的特权即将到期。）
The hydrogen infrastructure here in theU.S. today is about where the Tesla Supercharger network was just a few yearsago. For now, as it was back then, the expansion is focused where the greates tincentives are being offered. As the system expands sales will expand as well.But this time Toyota or Honda is not building the system on their own. State agencies are ponying up millions to assist in the effort. Royal Dutch Shellalready has operational stations in California. With a state incentive twice that of BEVs, FCEVs are becoming more compelling. No one should lose sight ofthe fact Tesla is likely to lose the full federal tax incentive in mid to late2018, making sales tougher not only in their home market of California butacross the country.
Even though the Tesla Semi is expected tohit the highways before Nikola, they have a serious up hill battle in increasingreservation counts. With the largest order to date from UPS for just 125 trucks(2% of their fleet), Tesla's lack of true test data could be hampering reservations. It may be why we have not heard about a FedEx order for Tesla trucks yet. The trucks that are being reserved are for companies to conduct their own tests in a real-world environment and that's forcing reservations for small numbers of trucks in relation to fleet sizes.
With Toyota's hydrogen semi truck alreadyhauling freight at the ports of Long Beach and Los Angeles, Tesla's numbers aregoing to have to be really good to justify new truck purchases for short hauls.Toyota's truck which uses a diesel semi truck conversion could be duplicated cheaper and faster than waiting to buy new Tesla trucks. Other engine and truck builders are reported to be working on new hydrogen-powered systems and designs(Kenworth is one).
There should be no doubt in anyone's mind that the internal combustion engine (ICE) is on its way out, and the sooner the better. Electrification is coming fast. Electric motors are cheaper, cleaner,easier to maintain, and should last longer than comparable gas engines. Lower costs of operation are obvious with no required oil changes or tune-ups. Now itis just a matter of determining the best method to power these new motors and Idoubt it will be "winner takes all." Batteries will have their place but are still very expensive, have an undetermined useful life at this point,and will require proper disposal. Hydrogen fuel cell electric systems emit oxygen and water vapor both of which are harmless to the environment, and their battery packs are much smaller.
Tesla needs to step up their game. New promises, like the pickup truck announcement, are no longer moving the needleas we saw with a 2.4% drop in share price on Tuesday. I honestly do not seeanyting in Tesla's near future to warrant holding shares. There may be a slight bump with deliveries next week but it will be short lived once the results of Q4 are published in February. I have to rate TSLA a sell at this point. I donot recommend a short sale of the stock. It is just too volatile. Wait until after the Q4 results. If CoverDrive is correct as reported Tuesday by Montana Skeptic (here) and Tesla pushes the $2 billion mark in losses in 2017, it will be a long ride down from there.
Disclosure: I am/we are short TSLA VIAOPTIONS.
I wrote this article myself, and itexpresses my own opinions. I am not receiving compensation for it (other thanfrom Seeking Alpha). I have no business relationship with any company whosestock is mentioned in this article.
Additional disclosure: For this article, Ileft out a discussion of the Hyundai Tucson FCEV because it is a compact SUVnot a sedan and priced $100 higher per month on a lease. However, it doesinclude free hydrogen like the others.