Fuel Cell Car Momentum Carried by High Gas Prices

Americans have short-term memories. When gas prices surpassed $4.00 a gallon across the country in the months following Hurricane Katrina, both we consumers and the automakers swore we'd drive (and produce) more fuel-efficient cars. A few people traded in their giant SUVs in favor of smaller cars. Some even bought Toyota's Prius hybrid car. But fast-forward a year from that time, with gas prices down again, we all returned to (wasteful) business as usual.

Maybe this time, everyone will stop believing it's a temporary fluke. As surging oil prices begin to stall the global economic recovery, consumers, automakers and investors are getting serious about alternative technologies. Investors are hopeful that the fuel cell vehicle sector will get a boost from the new drive (no pun intended) toward alternative fuels. Fuel cells can be used not only for vehicles, of course, but also heating and cooling systems and backup power for cell phone towers.

The Bedford Report, a new analyst paper, examines the outlook for fuel cells for cars and provides research reports on two prominent fuel cell companies: FuelCell Energy, Inc. and Plug Power, Inc.

Fuel cells can convert the stored energy in fuels like natural gas or hydrogen gas into electricity without combustion. They are somewhat similar to batteries, although fuel must be fed continuously to them. Fuel cells can operate on a variety of fuels, including natural gas and renewable fuels such as landfill gas.

Ford and Toyota are now both stressing the importance of breaking the dependence on foreign oil, and both companies say they could be mass producing fuel cell cars by 2015. Executives at Toyota say the company aims to slash the cost of hydrogen fuel cell technology before it starts selling its fuel cell sedan. Shinzo Kobuki, senior managing director in charge of Toyota's battery technology, says the goal is to bring the cost of the fuel stack and high-pressure hydrogen tank to one-twentieth of 2008 levels.

Access to the full company reports can be found at: www.bedfordreport.com/2011-05-FCEL andwww.bedfordreport.com/2011-05-PLUG