Following the unveiling of the new Honda FCX Clarity at the recent LA Auto Show, I sat down for another chat with Stephen Ellis. Steve is the Marketing manager for alternative fuel programs at Honda of America. We discussed the new car, Honda's Home Energy Station and hydrogen cost and availability.

AutoblogGreen: Let's talk a little bit about what, if anything, aside from the front end has changed from the concept. Are there any major mechanical changes from the concept or is it basically the same as what we drove last year.

Stephen Ellis: Mechanically they are same except, I think, the interior is well-appointed, a completely finished interior. Also now you are seeing that it has the climate controlled seats with heating and ventilation cooling built-in.

ABG: You are going to start series production of this vehicle next summer. It is going to be available at least initially in Southern California, Los Angeles area based on availability of hydrogen refilling stations. Once more stations become available, will the availability of the vehicle be expanded?

SE: That is the idea is that we look long and hard at this, if you think about two years ago when we were doing a lot of planning, the idea was that we would a few more stations, both in volume and what you call accessibility.

(Q&A continues after the break)
: So taking these three markets gives the best case for customer satisfaction. The stations and the people nearby and yet having the secondary station areas and that is something that I can give you more detail on. For example, we will call these the primary stations, the three markets in Santa Monica, Torrance, South Bay which includes Palos Verde and Irvine, Newport Beach.

Aside from that are the other stations that people will be able to access. The Burbank Station, South AQMD and Diamond Bar and also a station in Long Beach, along the 405 corridor. If you know the LA market and visualize that as if you are looking at it from space or Google or a MapQuest map, you can see that, that is a pretty good area in Southern California that people can operate.

ABG: With the range capability of the vehicle, pretty much the entire area is within reach of those vehicles. As long as if people are going to go a little further afield, they make sure that they fuel-up before they go and they should be okay. One thing that I noticed, Honda has stayed with 5,000 PSI storage tanks whereas at least Toyota, General Motors and some other manufacturers have migrated to 10,000 PSI. What is the reason for that?

SE: Well, it is multiple, one is that we have now a track record with 5,000 PSI, we have a refueling station network at 5,000 PSI and moving to 10 now adds some new burden to that station infrastructure. That is causing little bit of struggle right now for some. We are doing things with this car that no one else has done. A lease to the customer without a team of engineers in the back seat and a three-year lease showing the confidence that they are building technology. So 5,000 PSI gives us confidence to do that with a growing station network and leveraging the existing station network.

ABG: For the people that lease these vehicles, how much is it going to cost them to fill up an FCX with hydrogen?

SE: Of the three primary stations, one of them today is delivering hydrogen at $4.99 a kilogram, so $5.00, let's just round it at that, with a 68 mile per kilogram rating. You can quickly do the math and figure out that that is going to cost you $2.00 per gallon equivalent for a gasoline.

ABG: I think that gas in this area of California is approaching $4.00 a gallon if not more than that in some areas

SE: Yes, even if you round it to three, you have this equation. This proves that this once described barrier of having low-cost hydrogen can be overcome. Those hydrogen providers will price their fuel at a strategic level, so they learn also. One of the stations will be in Torrance being fed off of a hydrogen pipeline from a large scale hydrogen production plant. That is probably fair to say will be the lowest cost delivered hydrogen in the world because of a very low cost of producing and delivering it that way.

ABG: Is that price being subsidized by Honda or the suppliers or is that the cost of production?

SE: We will let the customer bear the cost of the hydrogen at the service stage. It is not a barrier and all that.

ABG: So that $5.00 or $6.00 per kilogram price is a realistic price then? It is not an artificially low price?

SE: Well, you would have to ask the providers whether that is a subsidized price of the fuel. And there is a good chance that is because most of these stations are still part of a project for research too. But clearly the major hydrogen providers are all saying that the DOE goals are easily achievable and that will not be a barrier. So pricing it today at something nearer to what it should be when it is relevant for the masses is not a bad way to go.

ABG: Certainly with a limited market, it is not like it is going to cost them a whole lot right now to do that, even if they were subsidizing the price significantly. As far as expansion of availability, one idea that came up in a recent discussion I had with Larry Nitz from General Motors, was the idea that if oil companies or gas stations did not want to make the investment to install a hydrogen fueling infrastructure, perhaps the companies like Honda, GM and others that want to build hydrogen vehicles should pursue doing that in conjunction with their dealers. There is an idea that has been put forward that you cover the majority of the potential market in the United States for example, with about 12,000 fueling stations as opposed to the 170, 000 gas stations we had today.

Perhaps if you put hydrogen fueling stations at dealerships and have the car companies work with dealers and the hydrogen suppliers to install filling stations at dealerships. Is that something that Honda might consider doing?

SE: I think no matter what people think today of oil companies and things like that, you cannot deny that what they are doing in bringing fuel to the customer is done very well today. We have seen gasoline stations move from grungy, grimy places that were not so pleasant to virtual food stops and well-lit and very convenient and credit card access. That has been a shift from how our parents did it to how it is done today.

In some ways, the case is made that if they are so good at doing that then adopting hydrogen and making hydrogen stations at gasoline stations is not a bad idea. The idea of doing it with dealers now, moves dealerships out of their core competencies.

They are good at selling cars and of course that is debatable just as oil companies are good at delivering gas. But the fact is, that is how it is done today and it is done very efficiently.

ABG: Right, one possible argument for going that direction for dealers is that as we move forward with electrified vehicles whether they are fuel-cell or battery-powered vehicles, there is a potential that many of these vehicles will require a lot less maintenance and a lot less service, that is one of the potential advantages of electrified drive systems. If they were to go down this path of maybe installing hydrogen refilling stations at their dealerships that might be an extra revenue stream for them.

SE: I think this is almost like another day discussion as to the merits of less required maintenance of electric-drive vehicles. Let's face it a lot of what is required today doesn't necessarily have to do with the internal combustion engine.

So, maybe there is more made of than needs to be. The Home Energy Station, I think is an example of looking for a new value in how we bring fuel to customer's vehicle. We learned that through electric vehicles. So, there was that old question: What are the top 20 reasons why you want to drive an electric car? When you ask that pre-purchase, the ability to refuel at home was down on 20th. After ownership it was the top three. See you do not know how good it is until you have experienced it.

Well, the Phill natural gas compressor the home, for CNG vehicles is a perfect example of that. Those people that have put Phill on their home, they love it. It works extremely well. Now build on that and bring hydrogen to a person's home.

So we have the opportunity to take what is well-accepted and understood, micro-co-gen, add the fuel component to that for your car and you have a new value. But you have the same value that the electric vehicle person experienced which they liked positively. You have the same value that the driver of the CNG car with Phill experiences, now applied to hydrogen. The difference is, you have the fast fill capability since stations are out on the road. So when you want to take that drive to Las Vegas, just one station in Victorville and one at the Bun-boy in Baker is going to get you that trip with no added burden and time just like the gasoline car.

ABG: The Home Energy Station, let's go over a little bit how that one works. It's using natural gas to produce hydrogen, and also generating heat for the home. It also produces electricity for the home.

SE: So here is how it works, it takes your existing natural gas pipe to your home today. It reforms that using SMR steam methane reformation. That hydrogen stream is used through a fuel cell stack to make electricity for your home. The process of doing that also creates heat. You can capture that heat and use that for hot water or to heat your home. But the third part is that hydrogen stream is then compressed and used to refuel your car.

ABG: So the heat to generate the steam for the reformation process is coming from burning the gas or from the fuel cell stack in the generating station.

SE: Both, you are capturing what would normally be lost heat energy and that adds to the efficiency equation. So, by capturing that heat, having this kind of distributed generation system, the goals of the unit like that are to have CO2 emission reductions greater than the way it is done today.

So it take your conventional way of bringing electricity to the home, heat to the home and now this offers a chance to reduce the CO2 compared to those traditional means. The other side of that equation of course is cost. So the goal also is to have that done in a more cost-effective manner.

Check out Part 2 of the interview here.

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