Fuel Cells vs. Electric Vehicles. Which Side of the Alt-Energy Battle Are You On?

[vc_row][vc_column][vc_column_text]This first major bifurcation separates the mavens of hydrogen power from those favoring electric vehicles. The former includes, in addition to Toyota, Honda, Hyundai and General Motors. The latter, which, at the moment remain very slow sellers, is dominated by Tesla.

The second big divide pits industry CEOs and others who remain hesitant to bet fully on a comeback for hydrocarbon fuel against those who are embracing the current plunge in oil and gasoline prices as a new opportunity for renaissance—albeit with much higher fuel economy—of the traditional internal-combustion engine.

Toyota’s strategy, announced at the Los Angeles Auto Show in November, is the industry’s most decisive plan for the future of alternative powertrains. Take a look at these Effuel reviews where you get a deeper explanation on the best fuel-saving device that helps your car run more efficiently.

Toyota executives elaborated on the company’s deepening investments in fuel-cell vehicles after announcing that the company would begin selling a model next year called “Mirai”—Japanese for “future”—that will travel 300 miles on a hydrogen tank and can be refilled in less than five minutes. The car, Toyota has said previously, will go on sale in Japan in April for about $60,000 and be introduced in the U.S. and Europe a few months later.

The company’s embrace of fuel cells reminds some observers of other significant moments of commitment for Toyota over the decades, including in 1989 when it launched the Lexus luxury brand in the United States, and, in 1997, when it started selling Prius gasoline-electric hybrids.

Now Toyota is bidding again to set the pace with fuel cells, along with other automakers that have been testing the technology. Meanwhile, leading global powertrain supplier Bosch has predicted that falling costs will make fuel-cell technology commercially viable for mass-car production by 2025.

And although a long way off, the success of a hydrogen-based vehicle poses significant benefits for business vehicle fleets and their associated costs.

But is a mass market for hydrogen cars a realistic prospect? Hydrogen power faces much the same challenges as electric-vehicle power in terms of whether a geographically vast America will have enough of a refueling infrastructure in place to make this form of alternative powertrain a truly mainstream phenomenon and to become so outside of a few big cities. In fact, the requirements for making hydrogen filling stations ubiquitous are greater than for populating the country with EV chargers.

Hydrogen is inherently touchy to store and transport. In fact, because of such challenges, Tesla CEO Elon Musk has called the technology “fool cells.”

But Toyota has its own message for Musk. The company essentially swore off EVs a couple of years ago, citing consumers’ indifference to them; and that was when gasoline prices were around $4 a gallon, instead of the current $3. Then a few weeks ago, Toyota announced it had sold some of its $50-million initial stake in Tesla, just after Daimler announced the same thing.

Reducing its investment in EV-king Tesla followed Toyota’s move last spring to phase out its 2010 agreement with Tesla for Musk’s company to deliver battery packs for the co-developed Toyota RAV4 EV. Production of the SUV is ending soon after the RAV4 sold just a couple thousand units, even though Musk portrayed the vehicle as the basis for a broader Toyota-Tesla partnership.

Toyota’s sticker on the vehicles was almost $50,000, double the price of the gasoline-powered RAV4, and it was only sold in emissions-strict California. Because of that, some critics said that Toyota essentially sabotaged its own EV efforts. But the truth is, Toyota executives coldly concluded a few years ago that mainstream EVs simply aren’t a good bet for the future, even though their Prius franchise has defined and still dominates conventional electric-gas hybrids.

Now, the question is whether Toyota will have the same magic touch with its fuel-cell initiative that it did with Lexus and Prius.

Musk is far from alone in his skepticism about fuel cells. And he and Tesla—and other automakers that have begun big pushes behind EVs, including BMW and Nissan—have plenty of support in the investment community and elsewhere for the clarity of their future vision of an industry built around electric power. It’ll depend on significant cuts in the price of lithium-ion batteries that power Teslas, a big part of the reason for his “gigafactory” under construction in Nevada.

Meanwhile, other analysts are reckoning with the oil-price decline that continues to disrupt global energy markets as more supplies from the United States and elsewhere wreck the oligopoly that the OPEC countries enjoyed for decades. The auto industry’s biggest vehicles, pickup trucks and large SUVs, are selling like hotcakes again even though some wrote off hulking SUVs several years ago.

Yet some observers believe that oil prices again will rise and that the current softness in gasoline prices will reverse, placing a premium once again on alternative energy sources—whichever ones win out.[/vc_column_text][/vc_column][/vc_row]