DETROIT General Motors Co(GM.N) and Honda Motor Co will jointly develop hydrogen fuel-cell vehicle systems over the next seven years, the latest alliance in an industrywide effort to cut the cost of the new technology while meeting stricter global emissions rules.
The two automakers, which announced the partnership on Tuesday, will also develop a refueling infrastructure that will be crucial for consumer acceptance and the long-term viability of fuel-cell vehicles.
Fuel-cell vehicles are getting renewed attention this year as automakers worldwide race to meet global emissions and fuel economy limits that are set to get tougher over the next 12 years.
In the United States, for example, automakers must achieve a corporate average fuel economy of 54.5 miles per gallon by 2025 across their lineup, a technical measure which translates to 36 mpg or higher in actual driving.
"When you look ahead to 2025 when you have 54 mile-per-gallon fuel economy standards, something needs to happen, and it's not going to be (battery) electric vehicles," said Dennis Virag, president of the Ann Arbor, Michigan-based Automotive Consulting Group.
GM and Honda said they will build on each other's technology and share suppliers to lower the cost of fuel-cell vehicles, which are more expensive to build than electric cars.
"At GM, we believe in hydrogen fuel-cell technology as one of several possible alternatives to more traditional forms of propulsion, to help reduce petroleum dependence," GM Vice Chairman Steve Girsky said Tuesday at a press conference in New York.
"However, the cost of such technology has not come down as far as it must to become more commercially viable," he added.
Fuel-cell cars use a "stack" of cells that combine hydrogen with oxygen in the air to generate electricity. Their only emission is water vapor and they can run five times longer than electric cars.
It takes just minutes to fill the tank with hydrogen compared with eight hours or so to recharge an electric battery.
There are just two fuel-cell vehicles available in the U.S. market the Honda FCX Clarity and the Mercedes-Benz F-Cell. Honda plans to launch the successor of the FCX in Japan and the United States in 2015.
One barrier to their widespread adoption is the high cost of the platinum needed to kick-start the chemical reaction within the fuel cell. The platinum alone adds thousands of dollars in costs to each vehicle.
But the partnership between Honda and GM will help the companies by combining their areas of expertise to help bring down the costs of mass-producing fuel-cell vehicles by 2020, said Virag.
Another issue is the lack of hydrogen stations in the United States, which cost $1 million or more to build. On its website, the U.S. Department of Energy lists 10 public hydrogen stations, mostly in southern California.
As part of the collaboration, GM and Honda said they would work with local governments and others to expand the network of hydrogen stations.
Global automakers have recently formed a number of tie-ups to lower the costs of fuel-cell development. In January, Toyota Motor Corp and BMW AG(BMWG.DE) outlined plans to launch fuel-cell vehicles around 2020.
That same month, Daimler AG(DAIGn.DE), Ford Motor Co (F.N) and Nissan Motor Co announced a separate tie-up to build fuel-cell vehicles within five years.
The partnerships came after the failure of electric cars to meet sales expectations, despite heavy global subsidies. Hybrids have gained ground, but industry analysts say more is needed to meet the new regulatory targets.
(Editing by Bob Burgdorfer, G Crosse)