GM, Honda to invest $85M to produce hydrogen fuel cells

General Motors and Honda said today that hydrogen fuel-cell vehicles are at the cusp of becoming mainstream as they announced they will invest $85 million to jointly produce advanced hydrogen fuel cell systems in Brownstown Township and create 100 jobs.

Each automaker plans to contribute $42.5 million to Fuel Cell System Manufacturing, a new joint venture, and they expect production will begin by 2020 at an existing plant where GM makes battery packs for the Chevrolet Volt and several hybrids.

The two automakers made the announcement Monday immediately after a decision by the Michigan Economic Development Corp., the state’s economic development arm, to award a $2 million performance-based grant to the project for an expected 64 jobs. The higher investment and job number applies to all of money and jobs to support the joint venture while the state's figure is based on the investments and jobs in Brownstown.

According to the MEDC, “the company also considered various locations throughout the United States, including one existing site in an adjacent state. The company also considered a greenfield development for this project.”

GM and Honda declined to say what kind of production volume they expect for the plant.

For years, automakers have said hydrogen-powered cars could have a big future as an alternative to gasoline-powered vehicles but a lack of refueling infrastructure and development challenges delayed their introduction. Now, Honda, Toyota and Hyundai all offer hydrogen-powered cars or crossovers to consumers in California and the zero emission vehicles are emerging as a sensible alternative for some consumers.

Dan Nicholson, GM's vice president of global propulsion systems, said automakers are making major advances with hydrogen fuel cell technology.

"They are not a science project anymore, they are a mainstream energy choice," Nicholson said. "Our common, next generation fuel cell system is smaller and lighter. More reliable, more durable and more refined. And it is much less complex than what came before it."

Mark Reuss, GM's executive vice president and global product chief, said hydrogen-powered vehicles go beyond sales to individual consumers.

"We have not announced any retail fuel cell vehicle plans," Reuss said. "I would encourage you to think outside of the auto industry...because a fuel cell can be used in many different applications, including aerospace, military -- all of those types of things."

Fuel cell vehicles operate on hydrogen. Water vapor is the only emission from fuel cell vehicles. GM and Honda first began working together in 2013 to develop a next-generation fuel cell system and hydrogen storage technologies.

"This foundation of our outstanding teamwork will now take us to the stage of joint mass production of a fuel cell system," said Toshiaki Mikoshiba, Honda's chief operating officer in North American region. "Honda has always been open to strategic partnerships that benefit our customers and society."

The new company -- Fuel Cell System Manufacturing -- will be managed by a board of directors with three executives from each company and a rotating chairperson.

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Honda, perhaps more than any other automaker, has believed in the future of hydrogen powered cars. Honda's Clarity Fuel Cell went on sale in the U.S. in December in California with the automaker selling eight of the sedans in its first month.

The automaker is offering leases of the Clarity at an introductory price of $369 a month for 36 months with a $2,868 down payment. Honda also offers an allowance of 20,000 miles per year, up to $15,000 of hydrogen fuel.

The Clarity Fuel Cell features a driving range of 366 miles and fuel economy rating of 68 miles per gallon of gasoline-equivalent combined with zero emissions.

Meanwhile, GM has invested more than $2.5 billion in hydrogen fuel cell technology and is among patent leaders in fuel cell technology.

GM tested the Electrovan, the world’s first hydrogen-powered fuel cell vehicle, in 1966. Back then, the hydrogen fuel cell system occupied nearly the entire van.

"It was basically the whole van. That whole floor of the van was a fuel cell," Reuss said.

In contrast, the fuel cell stack revealed by Honda and GM on Monday was about the size of a standard automotive transmission.

"Our technical team has done a wonderful job of taking cost and size out of that," Reuss said.

Contact Brent Snavely: 313-222-6512 or bsnavely@freepress.com. Follow him on Twitter @BrentSnavely.