Honda makes big bet on fuel cells with GM partnership

Honda — a major employer in Clark and Champaign counties — has made a big bet on the future of fuel cell technology, an energy system that company leaders and analysts said could be the next phase for powering vehicles of the future.

The automaker, which employs thousands of Ohioans, recently announced an $85 million joint venture with GM to mass produce an advanced hydrogen fuel cell system in southern Michigan, creating about 100 jobs. Production could begin in 2020.

“With the ability to mass produce hydrogen fuel cells, we are at a turning point in history — like the invention of automobile mass production, or home computers and cell phones,” said Jeffrey Smith, Honda’s vice president of North American corporate communications. “It’s that important.”

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But analysts said several obstacles — including cost and infrastructure — stand in the way of pushing the technology into the mainstream.

Honda is a major local employer, with about 1,400 workers from Clark and Champaign counties and about 13,000 Ohioans overall.

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Fuel cell production will take place in GM’s Brownstown, Mich., facility by employees of GM Subsystems, Smith said. It’s not expected to have an impact on Honda’s operations in Ohio.

Vehicles using the technology would be powered with an electric motor, and could be refueled using renewable resources such as wind and biomass. Water is the only emission the vehicles produce.

The agreement shows GM and Honda are taking a big step toward mass manufacturing fuel cell vehicles, said Michelle Krebs, an analyst for Autotrader. However, exactly how Honda defines mass production is still unclear, she said.

The technology has been in the research and testing phase for decades, Krebs said, but obstacles remain that range from the cost of the vehicles to building a refueling infrastructure.

For example, the Toyota Mirai, a competitor, costs about $58,000. Honda’s Clarity Fuel Cell model isn’t widely available for sale, but is expected to be a similar price and has a lease price of about $369 per month.

Other competitors, including Hyundai, also produce vehicles that use fuel cells. Smith said the joint venture that begins in 2020 for the next generation of the vehicle will lead to lower costs for buyers.

For now, Honda’s vehicle is only available in California and it’s not clear how long it might take before it makes its way to Ohio. There are about 40 hydrogen refueling stations in California now, with plans to have about 100 stations in the near future. Honda began U.S. deliveries of the vehicle in December, and delivered about 50 units by the end of last month.

“Hydrogen fuel cells have long been seen as the silver bullet for lowering emissions and, depending on the source of the hydrogen, eliminating dependence on oil, particularly foreign oil,” Krebs said.

Honda is focusing on building its market in California now, so it’s not clear how long it will take before fuel cell vehicles are available in Ohio. Honda’s partnership with GM will allow the companies to address some of those hurdles, Smith said.

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“On the issue of cost, our ability to mass produce a fuel cell system will result in lower costs, thus greater consumer acceptance, and thus the growth of the fuel cell market,” Smith said.

Along with focusing on ways to drive down costs, Smith said the manufacturers will also work with state governments and public-private partnerships to address infrastructure concerns.

In the meantime, Honda continued setting a solid sales pace for its gasoline-powered models. The automaker sets new January records for total vehicle and total truck sales last month, according to information from the company.

The company reported total January sales of 106,380 Honda and Acura vehicles, a 5.9 percent increase compared to the same time last year and a record for the month. The company’s CR-V model led the way with more than 29,000 vehicles sold. The CR-V is produced at Honda’s East Liberty plant in Logan County.

Honda hit an all-time sales record last year, part of an industry-wide trend in which automakers hit a record 17.5 million vehicles sold.

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