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Hydrogen Cars and Toyota's New Toy
Posted by: David Kerr (IP Logged)
Date: November 14, 2013 04:14PM

Hydrogen cars may be the next big thing. Tesla (TSLA) has shown us that electric cars can be stylish and impressive with its sleek Model S sedan, but maybe it’s time for something new. Toyota (TM) recently released some information of its latest concept car, the fuel-celled Toyota FCV Concept. If you were to ask about a fuel-celled vehicle 10 years ago, before battery-powered vehicles were the dominate alternative, people would think you were talking about some sort of futuristic space ship. The intriguing thing about fuel-celled cars is that instead of relying on a traditional battery pack for power, it has a system (fuel cell) that makes its own electricity right on board.

Fuel cells operate by converting hydrogen’s energy into electricity by oxidizing it. Basically, the hydrogen atoms are combined with oxygen atoms. This creates electricity, along with water. The only exhaust that the vehicle actually produces is the vapor from the water. Fuel-cell cars share the same benefits as electric cars: clean and extremely quiet, but they don’t have to deal with the challenges of lithium-ion batteries that engineers and automobile designers constantly face.

These batteries are expensive and bulky, not to mention heavy. Several years ago, the majority of analysts expected these batteries to be much lighter and less expensive by now. Unfortunately, this isn’t the case. I believe that this is why automobile makers have been searching for alternatives, such as fuel-celled cars.

Toyota isn’t the only automobile maker investing in fuel cells. Ford (F), General Motors (GM), Hyundai and Honda (HMC) have stated that they will be releasing fuel-celled vehicles within the next several years.

One of the biggest hurdles here, in my view, is going to be the need for “gas” stations to fill up on the fuel cell’s energy. Unlike the battery operated alternative, fuel cells cannot be recharged. They require a tank of hydrogen in order to make electricity. That means that fuel-cell owners will need to find a station that sells hydrogen (there aren’t many). According to research, the number of stations selling hydrogen is likely to increase as the need increases. Lucky for us, hydrogen is fairly easy to produce. It can be made from natural gas or water, both of which are relatively cheap.

Do you think the hydrogen car will catch on with consumers, or will it just be overlooked? Maybe a safer play would be to stick with natural gas companies, as the need for natural gas continues to rise.

Stocks Discussed: TSLA, TM, GM, F, HMC,
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