The study—“A portfolio of powertrains for Europe: a fact-based analysis”—compares the economics, sustainability and performance of fuel cell, battery-electric, hybrid-electric and plug-in hybrid electric vehicles in achieving the decarbonization goal.

With the number of passenger cars set to rise to 273 million in Europe—and to 2.5 billion worldwide—by 2050, this may not be achievable through improvements to the traditional internal combustion engine or alternative fuels: the traditional combustion engine is expected to improve by 30%, so achieving full decarbonisation is not possible through efficiency alone. There is also uncertainty as to whether large amounts of (sustainably produced) biofuels—i.e. more than 50% of demand—will be available for passenger cars, given the potential demand for biofuels from other sectors, such as goods vehicles, aviation, marine, power and heavy industry. Combined with the increasing scarcity and cost of energy resources, it is therefore vital to develop a range of technologies that will ensure the long-term sustainability of mobility in Europe.

To this end, a group of companies, government organisations and an NGO—the majority with a specific interest in the potential (or the commercialisation) of fuel cell electric vehicles (FCEVs) and hydrogen, but with a product range also spanning battery electric vehicles (BEVs), plug-in hybrids (PHEVs) and conventional vehicles with internal combustion engines (ICEs) including hybridisation—undertook a study on passenger cars in order to assess alternative powertrains most likely to fulfil that need. Medium- or heavy-duty vehicles were not included.

—“A portfolio of powertrains for Europe”

The consortium considered it particularly important to re-assess the role of FCEVs in the light of recent technological breakthroughs in fuel cell and electric systems that have now increased their efficiency and cost-competitiveness significantly.

To develop a factual evaluation of the economics, sustainability and performance of the range of powertrain alternatives across the entire, members of the consortium provided confidential and proprietary data on what they called an “unprecedented scale”— including vehicle costs, operating costs, fuel and infrastructure cost.

To ensure a realistic outcome, the study included a balanced mix of vehicle segments. The study also only considered vehicle technologies that are proven in R&D today and capable of a) scale-up and commercial deployment and b) meeting the EU’s CO₂ reduction goal for 2050—i.e., there was no consideration of breakthrough technologies. Average values were taken, with no “cherry-picking” of the most favorable data.

The group then used a combined forecasting and backcasting approach to calculate the results: from 2010 to 2020, global cost and performance data were forecasted, based on proprietary industry data; after 2020, on projected learning rates. To test the sensitivity of these data to a broad range of market outcomes, the study defined three European “worlds” for 2050, assuming various powertrain penetrations:

1. A world skewed towards ICE (5% FCEVs, 10% BEVs, 25% PHEVs, 60% ICEs)
2. A world skewed towards electric powertrains (25% FCEVs, 35% BEVs, 35% PHEVs, 5% ICEs)
3. A world skewed towards FCEVs (50% FCEVs, 25% BEVs, 20% PHEVs, 5% ICEs)

These three were then backcasted to 2010, resulting in a development pathway for each powertrain. The study found that the impact of the different “worlds” on FCEV costs was not significant; as a result, the report focuses on results for the second “world” as having a balanced split between the four powertrains (25% FCEVs, 35% BEVs, 35% PHEVs and 5% ICEs).

Among the major findings of the study are:

• BEVs, PHEVs and FCEVs have the potential to significantly reduce CO₂ and local emissions. Electric vehicles (BEVs, FCEVs and PHEVs in electric drive) can be fuelled by a wide variety of primary energy sources, thereby reducing oil dependency and enhancing security of energy supply. Well-to-wheel efficiency analysis also shows that electric vehicles are more energy-efficient than ICEs over a broader range of primary energy sources.

  Owing to limits in battery capacity and driving range (currently 100-200 km (62-124 miles) for a medium-sized car) and a current recharging time of several hours, BEVs are ideally suited to smaller cars and shorter trips, i.e. urban driving (including new transportation models such as car sharing).

  With a driving range and performance comparable to ICEs, FCEVs are the lowest- carbon solution for medium/larger cars and longer trips. These car segments account for 50% of all cars and 75% of CO₂ emissions, hence replacing one ICE with one FCEV achieves a relatively high CO₂ reduction.

  With a smaller battery capacity than BEVs, PHEVs have an electric driving range of 40-60 km (25-37 miles). Combined with the additional blending of biofuels, they could show emission reductions for longer trips.

  ICEs have the potential to reduce their CO₂ footprint significantly through an average 30% improvement in energy efficiency by 2020 and the additional blending of biofuels. After 2020, however, further engine efficiency improvements are limited and relatively costly, while the amount of biofuels that will be available may be limited.

• After 2025, the total cost of ownership (TCO) of all the powertrains converges. In the study, the economic comparison between powertrains is based on the total cost of ownership (TCO). BEVs and FCEVs are expected to have a higher purchase price than ICEs (battery and fuel cell related) and a lower fuel cost (due to greater efficiency and no use of oil) and a lower maintenance cost (fewer rotating parts).

  The cost of fuel cell systems is expected to decrease by 90% and component costs for BEVs by 80% by 2020, due to economies of scale and incremental improvements in technology. Around 30% of technology improvements in BEVs and PHEVs also apply to FCEVs and vice versa. This assumes that FCEVs and BEVs will be mass produced, with infrastructure a key prerequisite to be in place. The cost of hydrogen also reduces by 70% by 2025 due to higher utilization of the refuelling infrastructure and economies of scale.

  PHEVs are more economic than BEVs and FCEVs in the short term. The gap gradually closes and by 2030 PHEVs are cost-competitive with BEVs for smaller cars, with both BEVs and FCEVs for medium cars and less competitive than FCEVs for larger cars.

  While the fuel economy of ICEs is expected to improve by an average of 30% by 2020, costs also increase due to full hybridization and further measures such as the use of lighter weight materials.

  The TCOs of all four powertrains is expected to converge after 2025—or earlier, with tax exemptions and/or incentives during the ramp-up phase. For larger cars, the TCO of FCEVs is expected to be lower than PHEVs and BEVs as of 2030. By 2050, it is also (significantly) lower than the ICE. For medium-sized cars, the TCOs for all technologies converge by 2050. BEVs have a (small) TCO advantage over FCEVs in the smaller car segments.

• A portfolio of powertrains can meet the needs of consumers and the environment. BEVs have a shorter range than FCEVs, PHEVs and ICEs: an average, medium-sized BEV with maximum battery loading cannot drive far beyond 150 km (93 miles) at 120 km/h (75 mph) on the highway, if real driving conditions are assumed (and taking expected improvements until 2020 into account).

  Charging times are also significantly longer: 6-8 hours using normal charging equipment. Fast charging may become widespread, but the impact on battery performance degradation over time and power grid stability is unclear. Moreover, it takes 15-30 minutes to (partially) recharge the battery. Battery swapping reduces refuelling time; it is expected to be feasible if used once every two months or less and battery standards are adopted by a majority of car manufacturers. BEVs are therefore ideally suited to smaller cars and urban driving, potentially achieving ~80% CO₂ reduction by 2030 compared to today.

  FCEVs have a driving performance (similar acceleration), range (around 600 km/373 miles) and refuelling time (< 5 minutes) comparable to ICEs. They are therefore a feasible low-carbon substitute for ICEs for medium/larger cars and longer trips, potentially achieving 80% CO₂ reduction by 2030 compared to today.

  PHEVs have a similar range and performance to ICEs, but electric driving only applies to shorter distances, while the amount of biofuels available for longer trips is uncertain. They represent an attractive solution, reducing CO₂ considerably compared to ICEs.

• Costs for a hydrogen infrastructure are approximately 5% of the overall cost of FCEVs (€1,000-2,000/US$1,365-2,730 per car). For consumers who prefer larger cars and drive longer distances, FCEVs have clear benefits in a CO₂-constrained world. This segment represents around 50% of cars driven and can therefore justify a dedicated hydrogen infrastructure.

  The value of the FCEV over alternative powertrains in terms of TCO and emissions (including the cost of the hydrogen infrastructure) is positive beyond 2030. The economic gap prior to 2030 is almost completely determined by the higher purchase price, not by the cost of the hydrogen infrastructure. The study concludes that if this consumer segment prefers the FCEV, the cost of the infrastructure (5% of the TCO) will not be prohibitive to its roll-out. However, it notes, an orchestrated investment plan is required to build up the first critical mass of hydrogen supply.

• The deployment of FCEVs will incur a cost to society in the early years. The benefits of lower CO₂ emissions, lower local emissions (NO₂, particles), diversification of primary energy sources and the transition to renewable energy all come at an initial cost. These will ultimately marginalize with the reduction in battery and fuel cell costs, economies of scale and potentially increasing costs for fossil fuels and ICE specifications.

  A roll-out scenario that assumes 100,000 FCEVs in 2015, 1 million in 2020 and a 25% share of the total EU passenger car market in 2050 results in a cumulative economic gap of approximately €25 billion (US$34 billion) by 2020—mainly due to the cost of the fuel cell system in the next decade, but also including around €3 billion for a hydrogen supply infrastructure. The CO₂ abatement cost is expected to range between €150 (US$205) and €200 (US$273) per tonne in 2030 and becomes negative for larger cars after 2030.

  A hydrogen supply infrastructure for around 1 million FCEVs by 2020 requires an investment of €3 billion (US$4.1 billion) (production, distribution, retail), of which €1 billion (US$1.4 billion) relates to retail infrastructure—concentrated in high-density areas (large cities, highways) and building on existing infrastructure.

  The emerging FCEV market (2010-20) requires close value chain synchronization and external stimulus in order to overcome the first-mover risk of building hydrogen retail infrastructure. While the initial investment is relatively low, the risk is high and therefore greatly reduced if many companies invest, co-ordinated by governments and supported by dedicated legislation and funding. With the market established, subsequent investment (2020-30) will present a significantly reduced risk and by 2030 any potentially remaining economic gap is expected to be directly passed on to the consumer.

The study also details next steps, noting that investment cycles in energy infrastructure are long and suggesting that BEV and FCEV infrastructure and scale-up should be initiated as soon as possible in order to develop these technologies as material transportation options beyond 2020. In the short term, it concludes, CO₂ emissions will therefore have to be reduced by more efficient ICEs and PHEVs—combined with biofuels—while taking two concrete actions.

The first is to develop a comprehensive and co-ordinated EU market launch plan study for the deployment of FCEVs and hydrogen infrastructure in Europe. The second is to take a similar action to support the roll-out of BEVs and PHEVs in the EU.

Resources

• A portfolio of powertrains for Europe: a fact-based analysis