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BLDP: Hydrogen & Fuel Cell Solutions for Transportation, Part II


The alphaDIRECT Insight

The Deloitte China-Ballard joint white paper, published in 01.2020, focuses on TCO analysis of mobility applications. The white paper encompasses various transportation use cases in different parts of the globe, providing detailed cost comparisons between fuel cell electric, battery electric and internal combustion engine solutions. The white paper concludes that fuel cells will be the lowest-cost solution available within this decade, and sooner than previously expected. In this interview we review the implications for Ballard and the overall fuel cell sector. As with most technology, cost reduction is a significant factor in driving wide scale commercial adoption, with fuel cell technology already having been proven highly efficient and effective for certain transportation use cases. The white paper is available for download from Ballard’s website at

Download Part II of the Interview

Shawn Severson: Ken, let’s talk a bit more about the total cost of ownership, or TCO. Clearly investors are familiar with internal combustion engines and to some degree also battery electric vehicles, but can you address the fuel infrastructure, maintenance, and other aspects of fuel cell electric vehicles?

Kenneth DeWoskin:  Absolutely, Shawn. Let me start by saying that we have a long history of studying these issues. In our report we note that in the United States in 1974, a conference was convened at Miami University to look at the production and infrastructure issues related to the use of hydrogen. The study was not specifically for mobility, but rather for a broad number of energy applications.

The main operational issues with hydrogen are the production, storage, transport costs, and the facility cost associated with filling the vehicle storage tanks. Of course, hydrogen safety was also a topic to be better understood.

All of these issues in hydrogen production, transport, storage, and fueling are highly sensitive to scale and that is one reason why we are encouraged by the growth trends that underlie our white paper projections.

Right now, we have a 40% disadvantage with fuel cell electric vehicles, or FCEVs, compared to lithium battery electric vehicles, or BEVs, and about a 90% disadvantage compared to internal combustion engine, or ICE, vehicles.  However, we expect the crossover point to occur within this decade. Current economic applications that minimize these costs do cluster around fleets and, what I would call closed system applications like warehouses and intercity logistics systems, where centralized storage and fueling facilities can serve a substantial and also predictable number of vehicles. This is already, in my view, a significant market opportunity globally and its continued growth will actually chart the way for broader applications with more open and infrastructure-intensive applications.

The costs of fuel cells themselves will come down and they are less bound by costly material requirements of lithium batteries, for example. This was an interesting thing to contemplate. Fuel cells will see significant cost reductions as manufacturing scales up and as the technology continues to develop.

This is because fuel cells, while they use platinum, that only represents a small percentage of the cost of a cell. When compared to lithium batteries, and their dependence on high material costs such as substantial quantities of lithium, cobalt, and other materials – these are all materials that are subject to finite supplies and they could see a significant cost appreciation due to limited availability.

Lithium mining, for example, is now experiencing tremendous environmental pushback and potential high environmental remediation costs and there are geopolitical risks that involve everything from embargoes to local instability in countries where lithium is acquired. Fuel cells avoid this and it’s obvious that there is real potential for significant cost reduction as technology continues to develop and as manufacturing scales up significantly.

It is almost common sense that lithium batteries are likely to become much more expensive as their deployment becomes broader in the world over the next three to five years period. Hydrogen production using modern electrolysis technology, can reach about an 80% conversion efficiency that is far higher than hydrogen produced by steam methane reforming from natural gas and other sources. Fossil fuel sources, for example, deliver around 60% efficiency.  So, as high-tech production technology becomes more widely deployed for hydrogen, hydrogen itself will become very competitive in terms of its production costs.

In thinking about the entirety of the hydrogen market, the technologies that have been developed, such as electrolysis, lead to an inevitable conclusion that hydrogen itself is likely to be reduced significantly in cost as production scales up and as the latest technologies are disseminated around the world for production and usage. Other critically important points we plan to explore in the next two white paper volumes in this series are the role hydrogen plays in renewable energy storage and the distribution of benefits of offshore wind farms, for example. We will look at all of these issues and every one of them is a vector in the same direction, which is to reduce hydrogen cost for production, distribution, storage, and ultimately, application on a much broader scale.