Putting the cart before the horse? A look at the early attempts to push Hydrogen vehicles to the road

Type de publication:

Conference Paper

Source:

28th Gerpisa International Colloquium : Going Digital. Transforming the Automotive Industry 8-12, June 2020, Paris (2020)

Mots-clés:

Early Entry, Fuel cell Vehicles., Industry Life Cycle, new products; automotive industry

Résumé:

 

28th Gerpisa International Colloquium :

Going Digital. Transforming the Automotive Industry

8-12, June 2020

Ann Arbour and Detroit, Michigan, USA

 

Project of communication

Putting the cart before the horse? A look at the early attempts to push Hydrogen vehicles to the road

By

Martin Paquette

 

PhD Student in Economics, GREThA UMR CNRS 5113 Université de Bordeaux & PSA Group, , martin.paquette@u-bordeaux.fr

 

Keywords: Industry Life Cycle; Early Entry; new products; automotive industry; Fuel cell Vehicles.

Sub-Theme 1.  New product architectures: electrification, digitalization and beyond

 

Abstract:

As concerns for global warming increase, most governments are pushed to seeking solutions to reduce carbon emissions. Since a significant portion of emissions are caused by the use of motorized vehicle to transport people on a daily basis, the search for new fuels to replace gasoline and diesel has taken a central role in climate change policies. As of today the most prominent alternative to conventional vehicles are electric cars (EVs). However, while electric vehicle are slowly gaining terrain, with increased number of sales and large manufacturers engaging in their production and commercialization, they still face a series of challenges to overcome. Most importantly, because they require long charging times and offer lower autonomy than regular vehicles, they force their users to change their behavior. While they might suffice to serve most of everyday mobility needs, especially in urban areas, they limit the potential freedom that has remained a strong argument for the ownership of a personal vehicle.

In front of these issues inherent to EVs, Fuel cell electric vehicles, powered by hydrogen, (FCEVs), are presented as a more convenient, yet still eco-friendly, alternative. Compared to their fully electric counterparts, FCEV propose a higher range, lower refueling time, while keeping the advantage of not emitting CO2. However, hydrogen vehicles are not without their own sets of limitations. FCEVs are more expensive that EVs, as fuel cells required to turn hydrogen into electricity rely on rare materials such as platinum. On board hydrogen storage requires it to be either pressurized or cooled down to -252,87 °C thus making the vehicles tank a particularly troublesome technical challenge. When it comes to hydrogen production, electrolysis represents a small portion of hydrogen production compared to other methods that involve some level of CO2 emissions. For these reasons and more, it seems likely that hydrogen vehicles are not ready for their deployment on a mass scale. It is not unusual for technologies in their early stages of implementation to suffer from such weaknesses. As time goes by, costs are expected to go down and performances should improve. What is however more surprising is the amount of hype that is being generated by hydrogen cars, as well as the level of activity performed by several large and credible actors. Car manufacturers such as Toyota, Hyundai or Honda already offer commercial hydrogen vehicles. Several large bus manufacturers and operators have begun deploying hydrogen buses. Finally, a number of public entities have deployed programs pushing for the testing and deployment of hydrogen based mobility solutions. The activity of all of these actors is not restricted to research. Indeed, many of these actors are, at the present time, producing FCEVs, and commercializing them, as an attempt to accelerate its adoption. Their attempts at building FCEV legitimacy in the eyes on consumers and public entities alike is likely to determine if, and how fast hydrogen vehicles are expected to diffuse in the coming decades.

The literature on industrial emergence proposes that during their early stages, industries are plagued by a series of issues such as low legitimacy, unrefined technology and small market size. These issues render these early stage industries unappealing to most companies, since they entail high uncertainty, high costs and low rewards. However the industry can only be moved forward if actors invest in it. One of the proposed solution to this chicken-and-egg dilemma is for pioneering firms to engage early in the industry, thus incurring the initial risks and costs, to legitimize it enough so that other firms may decide to enter it in turn at a later stage (Gustafson et al. 2015). In other worlds, the successful emergence of a sector, and eventually an industry, may require for enough firms to engage early in its development. As such, while forecasting the future of any early stage industry is a risky endeavor, understanding these early hydrogen proponents might provide key insight as to its future development.

In order world, to better forecast the evolution of the hydrogen  vehicle industry, we may need to answer the following questions : What is the level of activity around FCEV deployment? Who are the actors behind these initiatives?

This paper proposes to survey deployments of FCEVs around the world, and identify the firms responsible for them. These actors will then be looked at individually to assess their nature and the level of their investment in the deployment of the technology. From a theoretical perspective, this paper hopes to enrich the literature in Industrial Emergence by applying its concepts to an industry that is still in its early emergence state, and where the ultimate outcome is not yet known.

 

 

 

The paper is organized as follows:

I-            The role of new entrants in early industries

  • A framework of industrial emergence
  • Early firm activity as a key function for industrial emergence

II-   The implementation of Hydrogen Vehicles

  • An overview of technical and societal challenges
  • Surveying deployment projects : where are there FCEV’s on the road?
  • The identification and qualification of firms responsible for FCEV deployment

III-        The road forward for FCEVs

  • Future evolution scenarios
  • Can any technology be fuelled by hype? A comparison with autonomous vehicles and early electric cars.

 

References:

Constance E. Helfat and Marvin B Lieberman (2002), “The birth of capabilities: market entry and the importance of pre-history”, Industrial and Corporate Change, vol 11, Number 4, 725-760.

Geroski. P. A. (1995) “What do we know about entry?” International Journal of Industrial Organization, 13, 421-440.

Jeffrey G. Covin and Dessin P. Selvin (1990), “New venture strategic posture and performance: an industry life cycle analysis”, Journal of Business Venturing 5, 123-135.

Steven Klepper (2002), “The capabilities of new firms and the evolution of the US automobile industry”, Industrial and Corporate Change, vol 11, Number 4, 645-666.

Robin Gustafson et al. (2015), “Emergence of Industries: A Review and Future Directions”, International Journal of Management Reviews, Vol. 18, 28–50 (2016)

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