ABG: What kind of efficiency are you are looking at right now for the Home Energy Station? How long does it take to produce how much hydrogen? How efficient is the process? How would the cost of operating such a device compared to what we use today?
SE: I think Home Energy Station puts into perspective that here we are now removing the tail pipe from the equation of emissions and now looking to the upstream. So whether it is the energy to charge an electric vehicle, a plug-in hybrid or to fuel any other car we have to look to the upstream.
Home Energy Station is a research project still that is targeting these efficiencies such that we have this near 50 percent CO2 reduction on a well-to-wheel basis when matched with hydrogen fuel cell car. And that is again taking advantage of these efficiencies. Today, using steam methane reformation of making hydrogen from natural gas in these large plants, we have shown this graphically that we have over 50 percent CO2 reduction when combined with the FCX. This new FCX using that same process now will moves that to 60 percent. So that's a step in the right direction.
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ABG: That is the well-to-wheel efficiency of the whole system?
SE: So, if we can achieve that with Home Energy Station then add the value of cost reduction. Now we have a value equation that people can aspire to.
ABG: Is something like the Home Energy Station, something that you could see perhaps within the next decade or is it farther out as far as something people might be able to install in their homes?
SE: No, definitely within the next decade. We will see some deployments of that. This is the fourth generation that we are showing here today, that is what the press release covers. In each generation it just keeps getting better. Smaller, more efficient, greater values and we will reach a point where we then move it from behind the fence at Honda R&D to deploying it in some customer deployments for more demonstration. Then that offers the opportunity to learn from that and looking into the value equations for bringing into production.
ABG: As far as the cost of the fuel cell stack today, how is that looking right now? GM, for example, has indicated that their goal is to get the cost of their fifth-gen fuel cell stack that they recently announced, in volume production down to $50 a kilowatt by end of the decade. Where is your stack standing as far as cost goes? Are you in similar price range?
SE: We are not naming numbers like that Sam, but the V-flow stack of this latest generation clearly demonstrates that shift, that movement from this traditional hand-built process to mass manufacturability. I toured the labs, at Honda R&D, and saw both the research side of it and also the production side of it and it is extremely impressive to see the advances that have been made.
So when we dissected this and you think about the stamped metal plates for example, how we're applying at the sealing gasket surfaces to that, eliminating the parts necessary, making this so it can be assembled on a assembly line process. That in and of itself is a massive step to the cost reduction. So the numbers, our engineering team will do presentations and announcements and SAE papers as they choose to take that in public but clearly this is on the right track.
ABG: Obviously, you're not prepared to talk about volume targets right now and I think the first couple of years as your market base is fairly small, it is going to be pretty low volumes. Assuming that hydrogen fueling infrastructure becomes available, what sort of time frame would you see getting to volumes upwards of 10,000 units a year? Is that something you might perceive by the middle of next decade or is it farther out than that?
SE: Well, our president once said that it might be by 2018 that we will achieve the next level of cost reductions and manufacturability to make hydrogen fuel cell cars equivalent in price to let's say a high priced sports car or something like that. So between now and let us say that ten year period of time we will keep working on making the advances. But yes, it sounds fair to say, let's look at where we are at ten years from now and time will tell.
I think that is the risk of trying to set a number by a certain date because there are so many variables that we cannot always control. So the important thing is that we are on the right track within a ten year window of time. I think we will see in great advances made both in obviously the technology of the product but also in the ramp up, the volume of cars that are deployed.
ABG: Since you are responsible for alternative fuel programs at Honda, maybe if you could talk for a moment about some of the other things that are going on. Is there any work being done, if you can talk about it, as far as battery electrics or is that something you cannot discuss at the moment.
SE: I know that you are looking for specific answer. We tend to get more generalized and the door is open for everything. I think that is the key. One of the interesting aspects of this car is that we are deploying with a lithium ion battery.
As you know, the application of that lithium ion battery has a big bearing on these issues of its durability and any other issues. So in this application we have great confidence. It is still fair to say that we feel we have ways to go with advances in battery technology to deploy one where you are truly cycling it through its full range and having it achieved the life that would be expected and of course the cost is very much connected to that.
ABG: Right now, with batteries it is very much a case of you have price, weight and capacity. You can have any two of those three.
SE: You understand. So I think, Sam, going back to the very first interview where I talked about batteries. That was probably eight years ago. Some of the same challenges still exist today while recognizing the advances that have been made. We are going to do the right thing and the best thing we can do at the right time. Everyone wants to know when we are going to do a plug-in hybrid vehicle? When are we going to do a pure battery EV?
We are not going to make announcements like that until it becomes a strategic plan to do so. But again, the door is open and we have to look at these technologies. So the shift from the ultra-capacitor in the previous car as the energy storage device to this lithium ion technology illustrates that very point that we look at what is the best technology to suit us. For this car we have determined it's a lithium ion battery and so be it, we've done that. When applied with the fuel cell vehicle like this and exercising it through that kind of narrower range, we have great confidence.
So, you had asked me about the 5,000 PSI versus 10,000 PSI. One other aspect of that to keep in mind, We have just achieved this significant improvement in range at that same 5,000 PSI pressure. So we have not just, let us say, thrown pressure at the vehicle to accomplish this range improvement.
To put that in perspective, the very first cars that we have delivered to the City of Los Angeles just five years ago were EPA rated at about a 170 mile range. Today, only 10 percent more fuel, we are at 270, so we add it up 100 mile range to those first vehicles that we delivered with only 10 percent more fuel. So that says that pressure is not the answer. It is one way. It is one part of the equation of improving the vehicle range.
But here again is a car that has better range than our natural gas powered Civic, that thousands of people drive in Southern California day in and day out using a small natural gas refueling network. So if one said, "What is the model that exists to show some confidence that hydrogen fuel cell vehicles can succeed? Well, certainly that is based on the question, how do you define success and what would you constitute as a market. So, thousands of people driving natural gas vehicles with 200 to 220 mile range.
Today in Southern California, that is exactly what people do, using the oil with 25 percent CO2 reduction and the ability to refuel from home. So when we say, those drivers are apprentices for hydrogen fuel cell vehicles, now I think more and more people see why. But we can make the advances. We can achieve range without solely relying on more pressure.
ABG: Obviously adding more fuel is the easy way to do it, relatively speaking. Obviously you made improvements at the fundamental level or the root level to improve the overall efficiency of the system rather than just adding more fuel to the equation.
SE: And even weight reduction. We are of course looking at 10,000 PSI. You have to. This is not rocket science. Someone said to me "Hey, even I, could do the math." I understand that 10,000 PSI using the exact same tank size envelope in the vehicle might give you, for example 50 percent more range. So take the 270 mile range, do the math on that. See there is an example of what could be achieved just by doing that but today we are going to learn a lot with vehicle that goes 270 miles.
ABG: And within the scope of what you are trying to do with this program right now that 270 mile range is probably good enough for the time being, for the next few years until the refueling infrastructure expands and becomes more available.
SE: Yes, I myself was one of the first drivers of a Civic GX natural gas, drove it to Las Vegas. And I knew that done wrong, I could fail. Not so much the trip there because when you think about that trip, once you climb out of the LA basin and you're kind of up in high desert. You have got a couple of roller coasters to go over there and then it is down hill for the last 40 miles. Turn that trip around; your first 40 are uphill.
ABG: That becomes a problem.
SE: And then you have make it to Victorville. With the installation of one station, now, I can tell people confidently, Sure, you can drive with natural gas to Las Vegas. So that again is a model of what type of hurdles we have to cross for a hydrogen fuel cell car. So here is a car of a greater range than a Civic GX that again with one hydrogen station between Southern California and Las Vegas and there already is a hydrogen station there on that end in Las Vegas because we are leasing the current FCX to the City of Las Vegas. So just one station say at the Bun-Boy there would accomplish the goal of letting this car have the utility of driving between here and Vegas.
ABG: I think that feeds into that whole idea that you don't necessarily have to have hydrogen available at every single gas station in this country to make it a viable alternative.
SE: And then it is just a matter of connecting those dots and then bridging those gaps and then again when our natural gas Civic first launched it was very difficult to drive it from here to there. Now, I know that a half of dozen people that do it every month. So there is a model that exists. Today, with the introduction of FCX Clarity I think we have clearly advanced electric vehicles.
ABG: Great, thanks for your time today Steve.