Why Elon Musk is Wrong – The Future of Hydrogen-Fuelled Transportation

Josh Gilbert

“Extremely silly,” “very difficult,” “terrible” and “incredibly dumb.” A few choice words which suggest Elon Musk doesn’t believe in a future in which hydrogen-powered vehicles play a particularly important role. But he’s wrong. In this blog post, we aim to highlight some of the success stories in the sector, and suggest that there are in fact many reasons to be cheerful when imagining an (at least partly) hydrogen-powered future.

The Argument Against

Despite what we here at CTG see as an area of significant future opportunity, it’s clear why Musk, and many other parties, think the way they do regarding the prospects of hydrogen-powered transportation. As the Tesla Model 3 moves into its first few garages, ChargePoint and others raise hundreds of millions of dollars for the rollout of EV charging infrastructure, and everybody from Volvo to Porsche plan releases of all-electric models, it seems that EVs have won both the battle and the war for the future of transportation. The falling cost and improved performance of lithium-ion batteries have led to what appears to be the ultimate power source for automobiles. Despite fuel-cell electric vehicles (FCEV) possessing a better range and drastically quicker refuelling times, there has been limited choice of vehicles, and even more limited consumer interest in driving them.  But despite the lagging adoption of FCEVs relative to their battery-electric cousins, there is significant progress being made in specific geographies, as well as other hydrogen-powered transportation applications beyond consumer vehicles. As such, hydrogen players are moving quickly in recent months, in attempts to secure a strong position in a market that could grow rapidly in size from 2020 onwards.

The Argument For: Signs of Growth

Where there is growth in hydrogen-fuelled transportation, it has tended to be in specific geographic pockets, spread over the globe. Due to the ‘chicken-and-egg’ problem shared by both hydrogen mobility and battery-electric vehicles (consumer demand for vehicles is required to justify infrastructure expenditures, but development of re-charging and refuelling infrastructure is an important precursor to customer demand), government today plays a hugely important role in driving innovation via partnerships and subsidized pilot schemes in hydrogen mobility.

United States

In California, generous governmental support and subsidies also help the expansion of hydrogen fuelling infrastructure and on-site equipment installation. The California Energy Commission, the DoE and the California Fuel Cell Partnership are three examples of these supportive public entities, with the DoE recently announcing $15.8 million in funding for new R&D in the area. It is also worth noting that this regional development is in part supported by the multi-billion-dollar settlements from the VW emissions scandal, of which the first $800 million tranche was approved earlier this week.

Further to this government support, significant partnerships, mergers and acquisitions have occurred in recent months, giving support to the notion that hydrogen-fuelled transportation continues to be an important part of the future. In 2017 alone, we have seen partnerships for hydrogen-powered delivery vehicles for UPS and FedEx (with Plug Power and Hydrogenics, respectively), Proton Onsite’s acquisition by Nel ASA, and Praxair’s merger with Linde Group. Niche uses such as delivery vehicles highlight some of the unique advantages that hydrogen power has over current lithium-ion battery powered vehicles, namely, faster refueling and longer usage cycles. For vehicles that are in more constant use, these traits prove highly valuable, as well as the fact that they are centrally parked when not in use, allowing limited hydrogen fuelling resources to fuel multiple vehicles from a single depot.


In Japan, there is strong governmental support for hydrogen technologies, with companies like Toyota leading the charge towards a ‘hydrogen economy’ ready for the 2020 Tokyo Olympics. This hydrogen economy ranges from hydrogen-powered buses to second generation FCEVs, such as the Toyota Mirai. As a nation, it has bet big on hydrogen-powered transportation, and with this strong government mandate, there appears to be acceptance of the reality of a trial-and-error period for the technology to develop more fully.

Within Europe, efforts have focused upon countries in which corporate headquarters of leading hydrogen/gas companies are based. For example, Nel ASA in Norway, ITM Power in Great Britain, and Linde Group in Germany. These companies have been able to leverage hydrogen infrastructure integration in their specific regions, working via public-private partnerships to engender progress. For example, H2Mobility programs in the UK, Germany, and wider Europe are funded by public sector grants, and pan-European projects such as the HyFive initiative. Perhaps the biggest of these initiatives is the Hydrogen Council, which was announced in 2017 at the World Economic Forum in Davos by 13 partners, who have promised a whopping $10.7 billion in hydrogen infrastructure investment over the next decade. Partnerships such as these are crucial at this early stage of development for the sector; mitigating risk for the individual players, and allowing the pooling of resources to address the large outlay for infrastructure.

Lastly, there is a consensus amongst hydrogen companies that Chinese companies are increasingly a force to be reckoned with in the hydrogen-powered transportation sector, with companies such as Peric showing their ability to compete, and potentially drive the price point down through manufacturing and operational efficiencies.

Conclusions, and further blogs

From the above, it is clear that there are significant efforts being made in certain geographies to drive hydrogen transportation and the accompanying infrastructure. Further to this, there are a plethora of use cases, ranging from ferries, ships and maritime applications, to warehouse and logistical solutions, to even electrolysis of hydrogen found on asteroids to support interstellar transportation. That’s all for now, but expect more on these other applications in future blogs.




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