GM, Honda begin U.S. fuel cell production toward replacing diesel

An employee assembles a fuel cell system in the module final assembly at Fuel Cell System Manufacturing LLC, GM and Honda’s fuel cell joint venture in Brownstown, Michigan.

Courtesy image

BROWNSTOWN, Mich. – General Motors and Honda Motor have begun commercial production of hydrogen fuel cell systems in a step toward offering alternative zero-emissions solutions beyond battery-electric vehicles.

The fuel cell systems are produced through a 50-50 joint venture between the automakers at an $85 million facility in suburban Detroit. The companies, which are marketing and selling products separately, are calling the “large-scale” production at the joint venture the first of its kind in the U.S.

Many in the automotive industry view fuel cells as a replacement for use cases for diesel fuel in things such as generators, heavy-duty trucks, semitrucks and construction equipment, among others.

Executives for both automakers and the Fuel Cell System Manufacturing LLC joint venture, as it’s called, said the start of commercial production marked a historical moment for the technology, which has been under development for decades.

And it comes at a key time for fuel cells.

Tightening emissions regulations, technological improvements, and heightened attention on environmental, social and corporate-governance, or ESG, efforts have created a clear opportunity, officials said.

“We’re getting some scale capability; we’re bringing costs down. And now we can start to move it into these segments where before it wasn’t really feasible,” Charlie Freese, executive director of GM’s “Hydrotec” fuel cell products, told CNBC during an event at the plant.

Jay Joseph, vice president of sustainability and business development at American Honda Motor Co., on Jan. 24 discusses the company’s upcoming fuel cell vehicle that will be based off the CR-V crossover.

Michael Wayland/CNBC

“If we don’t plant the seeds of future use for hydrogen today, it’ll just be delayed even further,” said Jay Joseph, vice president of sustainability and business development at American Honda Motor Co.

Honda and GM began working together on the current fuel cell system in 2013. The highly automated process of producing the systems is complex and involves expensive materials such as platinum and carbon fiber, combined to produce flat “cells.” Each fuel cell system has 307 cells in it that are vertically stacked.

Honda’s system is expected to be introduced into vehicles this year with a crossover based on the popular CR-V. GM’s first applications are expected to be for backup power stations and large trucks in Autocar’s fleet.

Honda’s forthcoming fuel cell vehicle is expected to be sold primarily in California, where some retail refueling stations for hydrogen vehicles have already been installed. The Japanese automaker previously sold a fuel cell vehicle called the Clarity, which ended production in 2021.

Production and challenges

Honda expects to sell roughly 2,000 of the fuel cell systems annually by 2025, followed by 60,000 units in 2030 and a few hundred thousand units per year by the second half of the 2030s.

That production volume compares with millions of traditional vehicles and EVs that GM and Honda are expected to produce in the years head.

GM declined to release production or sales expectations for its fuel cell system, but Freese said the factory is capable of scaling as needed and that both automakers are “looking at the same market and seeing the same kinds of opportunities.”

A GM Hydrotec fuel cell power cube on display at the company’s joint venture facility with Honda in Brownstown, Michigan.

Michael Wayland/CNBC

In 2017, GM said it expected to produce at least one fuel cell passenger vehicle by 2023, however it ditched that plan less than three years later to focus on battery-electric vehicles for consumers.

Freese said GM continues to view fuel cells as supplemental to GM’s plans for battery-electric vehicles, which include ending production of traditional gas-powered vehicles for consumers by 2035.

Hydrogen fuel cell electric vehicles and equipment operate much like battery-electric ones but are powered by electricity generated from hydrogen and oxygen instead of pure batteries, with water vapor as the only byproduct. They’re filled up with a nozzle almost as quickly as traditional gas and diesel vehicles.

Fuel cell vehicles face the same challenges as battery-electric models, including consumer acceptance, fueling infrastructure and cost. Those hurdles are why many expect fuel cells to first enter commercial applications such as trucking with its set routes and destinations.

The challenges are also why some critics doubt the potential market. Elon Musk, CEO of U.S. leader in battery-electric vehicles Tesla, has criticized fuel cells as “fool cells,” a “load of rubbish” and “mind-bogglingly stupid.”

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