Tuesday, February 01, 2005

Automakers Wonder Where the Profit Is. Hydrogen? Hybrids? No, Finance.



Quick quote from a CBS Marketwatch article:

Last week, Nissan chief executive Carlos Ghosn lamented that while gas-electric hybrid cars are in vogue, their cost of production makes no economic sense.

He also dashed hopes for hydrogen-fuel-cell vehicles: "The cost to build one fuel-cell car is about $800,000. Do the math and you figure out that we will have to reduce the cost of that car by more than 95 percent in order to gain widespread marketplace acceptance," Ghosn said in a speech at the National Automobile Dealers Association annual convention in New Orleans.

That means gas-powered cars and trucks are where auto companies will have to stay to find profit from vehicle sales. But that isn't really the case either. Ford and GM make more money through their financing arms than the actual manufacturing of cars of trucks.

/endquote

Well the good news for those looking forward to a hydrogen economy is that the vehicles have got about 20% cheaper, last thing I heard was they cost about one million dollars each. The bad news is that the infrastructure will costs HUNDREDS of billions and the energy & car companies are looking at you the taxpayer to pay for it. And then of course there's the small question of how to produce hydrogen economically using renewable energy. Seems like the much hyped hydrogen economy is still a few decades of at the very least.

So if selling cars isn't really that profitable any more (although I find it hard to believe selling giant SUVs and pick-ups which don't have to meet emissions or safety standards isn't profitable) then why not go after the giant emerging markets of China and India? And why not go after them with a truely innovative product like an electric vehicle. If most of the money is made through finance, why not expand your customer base with a zero emissions electric car.

Full CBS Marketwatch Article on the Future of the Auto Industry

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11 Comments:

Blogger The Propel Project said...

What about diesel vehicles running renewable and domestically produced biodiesel? The infrastructure is already in place, the technology is "old" and proven. A biodiesel-based, hybrid-diesel vehicle would give this so called hydrogen future a serious run for its money. As in, much less cost to implement. The technology already exists, and our dependence on unstable and autocratic oil producing nations would be severed more quickly. I dare say that hydrogen is a red herring used by big oil and Detroit to postpone any action and keep control of their markets. A push of real investment dollars in biofuels would scare the pants off these legacy corporations. Consumer choice- uh oh!

10:32 pm, February 01, 2005  
Blogger Engineer-Poet said...

I believe you're right about the boondoggle aspect of hydrogen (we already have the infrastructure to go electric), however you are DEAD WRONG about the feasibility of a biodiesel economy.  Biodiesel would inevitably be captured by the farm lobby, and the subsidies would only be available to farmers of conventional oilseed crops.  These crops cannot even satisfy our current demand for diesel even if grown on all unused cropland, and could never satisfy total demand for motor gasoline, jet fuel, etc.  Biodiesel from algae could be sufficiently productive to work, but there is no constituency to push this.

I intend to start making biodiesel in the near future, but it's not a panacea.  The near future belongs to plug-in hybrids, and the people who want to "drive green" will be putting solar panels on their roofs to supply their cars with energy.

6:00 pm, February 08, 2005  
Blogger John H said...

Hydrogen fuel is misunderstood as shown by the comments made. The auto and gas industry have always been threatened by hydrogen, thats why they touted the Hindenburg as an explosion. It was just a fire like gasoline or anything else would have burned, as usual linited by the supply of oxygen. Explosions only happen with chemicals that have their own oxygen like nitrates. Natural gas can explode and often does, (it is dense) since it collects in low spots and mixes with oxygen. Hydrogen rises so cant explode unless confined in a tank or pipe such as gasoline vapor with proper oxygen content.

4:48 pm, March 21, 2005  
Blogger John H said...

Hydrogen infrastructure is already in place it travels fine in the natural gas pipe network easily separates upon arrival but its not necessesary to separate hydrogen it has the exact same BTUs as natural gas or propane.

4:56 pm, March 21, 2005  
Blogger John H said...

Why are fuel cells popular? Because the industry can charge $70000. for a car. Fuel cells/catalys is totally un-necessary, since your car can run on hydrogen right now with minimal modification of $100. Also why is bio-fuel popular? Because major landowners get tons of subsidies to produce grain for fuel. the fertilizer needed is an environmental hazard at least it kills fish. And so it really is not cheaper than oil and if the demand went up no way to catch up. It could never replace enough oil to make a differecne. We only have hydrogen. Get rid of all the hydrogen myths and you will see why the energy industries try to discredit it. Dont forget Edison almost killed alternating current because it was "too dangerous".

5:05 pm, March 21, 2005  
Anonymous Anonymous said...

Since hydrogen production requires electricity it makes sense to build production and storage facilities near wind farms. Production would vary with wind speed and proximity to the power grid is not a problem.

8:23 am, May 07, 2005  
Anonymous Anonymous said...

Hydrogen fuled cars are going to cost alot but we are running out of oil and need a new fuel to run our cars. We need to find a way to make Hydrogen Fuled cars affordable. Now there are new Hybrid gas/eletric cars coming out so at leasts thats a start.

9:16 am, May 09, 2005  
Anonymous Adrian Akau said...

I wonder if engines could be designed with a double set of fuel injectors, one for liquids and one for gas such as hydrogen. The injection of hydrogen would serve to raise the power output of the motor.

A second thought would be to make a "soda pop" type of fuel composed of liquid fuel and hydrogen under pressure. The hydrogen might be place into the liquid just before the injection stage so that a normal gasoline or diesel tank could be used. This would enable engines to operate without internal modification.

There might also be some other way of temporarily attaching the hydrogen to regular liquid fuel so as to increase its energy content.

adrianakau@aol.com

1:22 am, July 17, 2005  
Anonymous divydovy said...

Finance is a vital one - nearly everything energy needs an investment - so far there is no proper scheme for offsetting high initial capital costs against lifetime system costs.

However, WRT the H2 infrastructure. Yes, it would cost billions to transform our infrastructure. The USDOE reckoned about $12Bn for the US to give H2 access to 90% of its population.

Has anyone stopped to check the cost of oil infrastructure recently? $25Bn for the Alaskan pipeline. How much for the war in Iraq? What is the overall cost of fossil fuels used as energy? I think $12Bn is a bargain - and so obviously does George W Bush himself. I hate agreeing with that man.

9:01 am, February 13, 2006  
Anonymous Anonymous said...

Greetings:
almost everywhere one looks, one see disinformation about energy.
Hydrogen is not a fuel , it is an energy storage medium.
Natural Hydrogen floats out into space ( naturally).


Think of it like the way, we store electrical power generation , we pump water up hill into a lake. (at midnight to 4am).
Then, in the morning they generate power for all those people making toast in them morning.
Peak demand.
Or at night when we step in to that wasteful hot tub.

No one calls an artificial lake, a fuel source.

Ok,
Hydrogen can be made by electrolysis of water.
It can be made from steam splitting Natural gas (methane). ( cheapest method to date but NG is in Depletion in the USA)
It can be hyrdocracked out of OIL ( the largest amount on earth to day , this second, and every day).
Go to Chevron dot com and read.

Water can be split directly via the high temperature fission reactor method. ( I would live next to one !)
The Russians are building a liquid lead cooled reactor now to test this theory. ( so is Bush , go to DOE and read).

In each of the cases above, the problem is always that the cost is vastly too high or it is just simpler to
burn what mother nature gives us for free ( dino oil).
No one wastes more energy then you net. ( unless you are crazy or on some new religious kick !).

Even I ( if not arrested) could distill crude in my back yard and make about 47% gasoline and burn it in my
engine ( after retarding the timing because my gas is a crappy 80 octane). ( wasting only small amounts of energy)

Then the answer is just this , gee you are burning Hydrogen now ( see, in you gas tank) it is called
the “hydro (gen) carbon” called Gasoline. ( or Diesel Oil).
You are just wasting the carbon in the molecule chain.

If you want to save money on fuel, buy an Echo car. ( or tiny diesel car)
If you want to save the planet , walk more.

If you think the ZEV is cool , check out how much coal gets wasted ( 51% of all electricity uses coal in the USA and rising) between the coal fired plant and the charged battery in your ZEV car ( over 50% end to end) .

It is all a lesson in economics and is mostly not political.
The politics comes when we have to beg the Saudi’s for more Oil each year.

If you were given 10 choices ( just imagine for a moment) of fuel at the pump station and your car was a super multi-fueled machine, which fuel would you pick?
Gasoline $2.85 , Hydrogen $4.85 , LNG $3.50 , Rape Seed Oil $4.35 , E100 $4.00 (Ethanol) , Recycled French fry oil $4.35 , then repeat all the above and more for foreign and domestic.( you my wish to play politics). WHAT CHOICE WOULD YOU PICK and more important, the other people?
Try to be honest with youself.

Further reading
Read THE PRIZE , by Daniel Yergen ( URL: transcripts.cnn.com/TRANSCRIPTS/0204/13/tt.00.html)
And the book called one thousand barrels a second ( if you are time limited,a new hard back!).

Good day and happy hunting.

4:49 pm, April 11, 2006  
Anonymous Anonymous said...

The best choice that has been overlooked is the ability to burn hydrogen in a normal combustion engine. Hydrogen that can be produced from a catalatic reaction from water.

8:13 am, May 03, 2006  

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