The Future of Hydrogen Cars

Proton OnSite's lack of progress toward its proposed "hydrogen highway" demonstrates the low priority America gives this alternative fuel.

Gas tank: A tank of hydrogen that is used to fuel 90 small vehicles at a BMW plant in Spartanburg, South Carolina.

In October 2010, Proton OnSite's subsidiary SunHydro opened a hydrogen fuel station at its Wallingford, Connecticut, headquarters. The station was the first of at least nine that the company planned to build up and down the East Coast to supply hydrogen-powered fuel-cell electric vehicles. Yet SunHydro has not built a single additional station since.

Despite the stall, Proton investor and SunHydro cofounder Tom Sullivan, who made his fortune with the Lumber Liquidators hardwood flooring chain, sees only opportunity.

Fuel-cell cars are ultimately electric cars, but they use hydrogen as fuel. The fuel cells convert the energy stored in hydrogen into electricity, yielding water vapor as the only byproduct. SunHydro also uses water as its starting point for producing hydrogen, splitting the molecules into hydrogen and oxygen by means of solar power, theoretically making the whole fuel chain ecologically sound.

Proton's cofounder and CEO Robert Friedland says the company is still planning to roll out SunHydro stations, but in clusters within cities rather than as individual stations hundreds of miles apart. He explains the change as having been dictated by the needs of carmakers. "[A cluster] would allow automakers to sell their vehicles in that geographic location because the refueling need for the local vehicles would be satisfied," Friedland says. But clearly the company is also responding to the less-than-humming hydrogen-energy business climate. The company, founded as Proton Energy, rebranded itself as Proton OnSite in April when it increased its offerings from hydrogen production systems to include nitrogen generators, tanks, and compressors.

Friedland admits the cluster model is a departure from the original "hydrogen highway" plan. "While [that plan] might work in terms of allowing someone to drive from Maine to Miami, it does not resolve the day-to-day, week-to-week need of filling up," he says. Since opening that first station, SunHydro has begun working with carmakers to synchronize plans for station openings with those for rollouts of hydrogen fuel-cell cars on the East Coast. Carmakers say their markets are likely to include New York, New Jersey, Connecticut, and Washington, DC. "This does not imply that clusters will not evolve in other states along the East Coast," Friedland says.

Yet, he concedes, plans remain tentative. "Tom [Sullivan] is pragmatic at the end of the day, and I think he expected a higher level of engagement from the auto manufacturers to bring vehicles to the East Coast," Friedland says. "We speak to the car people several times a month, and plans for East Coast vehicles are still up in the air."

Friedland says automakers have expressed definite intentions to introduce production fuel-cell vehicles sometime in 2014 or 2015. But, he adds, "they have also been clear that early rollout will be in areas that have adequate refueling infrastructure." This demonstrates the chicken-and-egg problem that has plagued fuel-cell cars for over a decade: carmakers fear there won't be a market unless consumers have easy access to hydrogen fuel stations, but there's little incentive for entrepreneurs to build stations without cars to fill.

Although the automotive industry continues to insist that fuel-cell vehicles will be retail-ready in the next few years, hydrogen is simply not the alternative fuel of choice, even for companies seeking to burnish their image.