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Get Ready For Fuel Cells.

Suppliers should begin investigating the materials, system and processes needed to build these zero-emission `engines' and their drive systems -- or risk being left behind.

Pistons, rings, con rods and crankshafts. Cylinder blocks, bearings, cams, valve springs, fuel injectors. Timing chains, exhaust systems, even the humble muffler. All are vital components to the internal combustion engine (ICE), the 115-year-old dinosaur that refuses to die because it gets cleaner and more efficient each year. But those components, along with the tools and facilities needed to produce them, are defined for extinction, if the development of a 160-year-old technology -- the fuel cell -- continues at its current pace.

Sure, reports of the ICE's demise have been greatly exaggerated for decades. But more stringent regulations and technological advances are altering the landscape and many automakers are preparing for the change. Ford Chairman William Ford Jr. says his company will move away from the ICE and predicts that, "in our working lifetime we will be a fuel cell driven enterprise."

He may be right For the first time in history, fossil-fueled piston power faces a wall that may be insurmountable -- California's Zero-Emission Vehicle (ZEV) mandate. The 2004 law, which by auto industry calendars takes effect just one product cycle away, has also been adopted by a number of northeastern U.S. states. It calls for 10% of an automaker's vehicles sold in the Golden State to be ZEVs. Even the cleanest ultra-low-emission ICEs can't cut it, and battery-powered EVs are unlikely to be the industry's zero-emissions savior.

That role is increasingly seen as falling to fuel cell-powered vehicles.

A recent study of global powertrain trends by Autofacts Group, a unit of Pricewaterhouse Coopers, projects that automotive fuel cell use "will advance rapidly" beyond 2005. The study predicts fuel cell annual volumes to hit the million-unit level by around 2010 -- roughly three product cycles from today. Its development and sales will be spurred by the U.S. ZEV mandate and various environmental pressures in Europe.

"The major driver of powertrain technology and innovation going forward will continue to be government regulations and legislation," says Autofacts Managing Director Chris Benko. He and other industry analysts predict that political fallout from global climate meetings, such as those held in Buenos Aries and Kyoto, will continue to pressure the world's automakers to reduce exhaust emissions, as it's done in California. And more stringent standards are guaranteed to keep coming.

But the industry is doing a slow turn on emismons issues. What used to be reluctant compliance is becoming a competitive battleground. The speed at which automakers can introduce major technologies, such as affordable fuel cells, to meet the stricter regulations is increasingly viewed by vehicle buyers and shareholders as a strategic market advantage.

Virtually every ms0or automaker has a fuel cell development program underway. DaimlerChrysler (DC) has dedicated a group of 900 people to work on them full-time, and has formed a multi-billion-dollar alliance with Ford and Canadian fuel cell technologist Ballard Power Systems. DC has progressed the farthest. Five years ago its NECAR1 was the size of a moving van, filled with a huge, low-powered fuel cell and storage tanks. The 1999 NECAR4's fuel cell fits under the little A-Class car's sandwich-type floor. It's 800% smaller and produces nearly four times the power.

GM and Toyota recently forged their own fuel cell development axis. BMW is working closely with Delphi and International Fuel Cells, Nissan and Renault have a project ... the list goes on, and includes numerous similar ventures among drive systems and power control specialists.

A fleet of up to 50 fuel cell-powered test cars and buses will reach California roads between 2000 and 2003, part of an effort by the DC-Ford-Ballard alliance. It's supported by Shell, ARCO and Texaco, which are beginning to evaluate hydrogen fuel supply.

Despite the many advances, however, NECAR4 and its counterparts are still roughly 10 times too costly and 30% overweight to be viable in today's market. Numerous issues, from cold starting to leak detection, still hamper hydrogen as an automotive fuel.

Durability cycles of critical items such as the proton-exchange membrane, are still unclear.

"Fuel cells are not fail-safe," notes Chris Borroni-Bird, DaimlerChrysler's senior manager of technology strategy planning. "The membrane cannot have any holes in it, so manufacturing quality control must be very stringent." Even the catalytic coatings on the bipolar plates cannot be porous. "It's a challenge when you're talking about a flow field with grooves in it," he adds. (see sidebar.)

High noble metals content in the catalysts will keep stack costs high. Experts say a midsize car will require l0 grams of platinum for its fuel cell.

Overall, the learning curve is steep. That's why industry leaders, including GM Vice Chairman Harry Pearce and DC's engineering technologies chief Bernard Robertson, are telling suppliers: "We need your help."

Time To Investigate

According to DC fuel cell program chief Dr. Ferdinand Panik, 50% of the automotive fuel cell's cost reduction will come from volume production. The other half will come from less expensive materials and greater tooling efficiencies. For automotive and non-automotive suppliers alike, opportunity is waiting -- but only for those companies that are forward thinking and willing to jump in on a medium-to-long-term development curve with almost no short-term payoff. Ballard will produce only about 10,000 stacks to meet DC's 2004 vehicle production target, says company President and CEO Firoz Rasul. That's hardly a juicy incentive for suppliers used to million-unit volumes.

"It's definitely a paradigm shift for the auto industry," observes auto industry analyst Mike Robinet, with CSM Forecasting in Northville, Mich. "And it won't happen overnight. But it's not too early for suppliers to begin investigating the materials, systems and processes needed to build the fuel cell "engines" and their drive systems -- or risk being left behind."

John Wallace, director of Ford's environmental vehicle group, says "it's appropriate for suppliers to take action, but it's not an emergency next week. We'll have IC engines around for a long time." Still, he counsels suppliers to begin discussing what they have to contribute to a new fuel cell supply chain in their strategic plans.

Many vendors geared to ICE supply have yet to seriously consider exactly what fuel cells are, and what's needed for their production. "We haven't made plans to look at them yet," admits Borg-Warner CEO John Fiedler.

Firms wedded to ICE components, such as crankshaft forgers or piston-ring makers, see fuel cells as a distant threat, if at all. But unless they keep a close eye on the horizon, such companies risk following the buggy-whip makers of the last century into oblivion, says CSM's Robinet.

However, for suppliers that make other key automotive items, such as heat exchangers, power distribution systems, electric motors, pumps, condensers and fasteners, fuel cells present great opportunity. It's all a matter of assessing core competencies, evaluating resources and establishing a long-term plan.

"I'll bet `what if this thing really takes off?.' is going through the minds of some supplier CEOs," says Byron McCormick, co-director of GM's Global Alternative Propulsion Center in Kastel, Germany. "The important thing they should remember is, they don't want to be caught unprepared if it does."

What OEMs Want

Fuel cell experts, engineers, industry analysts and automaker executives interviewed for this story say suppliers interested in fuel cell development and production should consider the following:

* Electrical and electronic systems suppliers, and software specialists, will be best suited to move to this technology.

* Traditional engine and gearbox component makers now focused only on ICEs will be the most challenged and should search for fuel cell-oriented partners or acquisitions.

* Because of the systems-based design of the fuel cell vehicle's driveline, systems integrators will have an advantage.

* Materials suppliers with innovative solutions in metals or composites are sorely needed, in a variety of areas.

* Bring an ability to understand the automotive environment. Non-automotive suppliers, such as aerospace companies, not capable of high-volume production should master it.

* Quality issues and processes will follow automotive standards.

* Failure-mode analysis and design-of-experiments will be vastly different, and will have to be revised for fuel cell production.

Purchasing: Who To Contact?

So your company has a low-cost, high performance material that's perfect for fuel cell membranes. Or you've designed a new process that can stamp out stack plates like cookies, with Six Sigma precision. Who do you contact? Automakers suggest interested fuel cell suppliers, R&D firms and technologists should contact them through normal purchasing department channels. DC and Ford are staffing Ballard with purchasing and manufacturing people as it ramps up to volume production in 2003.

"Call us up at any of our three alternative propulsion centers (in Kastel, Germany, Warren, Mich., or Rochester, New York) and work with us," suggests GM's McCormick. He notes that GM has dedicated Gunther Schmirler, executive director of worldwide purchasing, to fuel cell sourcing.

Meanwhile, it's an open field right now. "There isn't a single piece of the fuel cell system that doesn't have opportunity," notes Ford's John Wallace. "This is a work in progress. There's not a single chunk that can't be redesigned for optimum performance, packaging or ease of manufacture."

Investigating your options today could avoid the buggy-whip route tomorrow.

RELATED ARTICLE: Targets Of Opportunity

Key fuel cell components and systems that suppliers should be investigating.

1. Fuel cell stack plates: Thinner, lighter-weight bipolar plates will help reduce overall stack mass. Graphite and carbon fiber are lighter than aluminum but costlier. Precision stamping and machining processes, tooling and stack assembly equipment are also needed.

2. Air compressors/pumps: Today's compressor makers can have a field day, say fuel cell engineers. Oxygen pumps need to be quieter, less costly.

3. Fuel cell membrane: Greater durability, higher temperature performance (90 to 95-degrees C, instead of 80 to 85-degrees C) and lower cost materials are needed.

4. Heat exchangers: Fuel cells produce low-grade waste heat. "We have to be innovative in how we deal with this," says an engineer, "and heat exchanger makers can help."

5. Catalytic materials: The fuel cell is a dream come true for catalyst makers, say engineers. Fuel cells use catalysts in a number of areas, but they're not all precious-metal cats. Some are cheap metal-oxide types.

6. Filters: Keeping the methanol that goes into the stack clean, and thus the fuel cell unpoisoned by sulfur and CO, is a job for filters and traps. "We need a replaceable filter element, a huge one," notes an engineer.

7. Fuel tank: On-board reforming of methanol into hydrogen is just a starting point, before hydrogen fueling infrastructure is created. Cryogenic storage of liquid hydrogen is not really practical, nor is the cost of carbon fiber and metal hydride tanks. Tank specialists, take note.

8. Refueling hardware: Experts say hydrogen filling stations will robotically "dock" the fuel-filling device to the vehicle. Couplers, connectors and delivery systems are needed.

9. Piping, clamps, fasteners: Current suppliers of this hardware will find even more opportunity with fuel cells, say engineers.

10. Electric motor drives; Perhaps the most mature aspect of the fuel cell drivetrain, but lower mass, cost, and greater package efficiency are needed.

11. Fuel reformer: Size and mass reduction are an immediate bogey for this device that converts methanol or gasoline to hydrogen on board the vehicle.

12. Sensors: Fuel cells will spur demand for fast-acting chemical sensors, diagnostic sensors and leak-detection sensors.

13. Coolants: Developers need a coolant that doesn't freeze at -40 degrees C. They're looking at various glycol mixtures that meet that spec, and won't poison the stack.

14. Powertrain control unit Same needs as piston engines -- fast response and plenty of processing power.

15. Battery: Fuel cell vehicles may still require a small storage battery to power the system heater for cold starts.

16. Package module: Structure that surrounds and supports the fuel cell and can be easily disengaged to drop the powerplant for servicing. Needed: low-mass fabrications.

17. Seals: Advanced seals are required on the stack to separate hydrogen from the oxygen going in.


Fuel cells are a chemistry lover's dream. They generate electricity directly from a reaction between oxygen and hydrogen. The heart of the fuel cell is known as the stack, it's made like a battery, with each pair of electrodes (an anode and cathode) comprising one cell. To build a more powerful fuel cell, simply add stacks. DaimlerChrysler's NECAR4 uses two stacks of 160 cells each to produce about 90hp (70 kW).

The electrodes, also called flow field or bipolar plates (inset, above right), can be made out of various materials. NECAR4's plates are graphite. They're coated with a noble-metal catalyst -- platinum in this case. Each pair of bipolar plates is separated by a proton exchange membrane (PEM) (inset, above left), that's made of wafer-thin polymer sheet. The most popular membrane material used by fuel cell developers is Nation, made by DuPont, but others are also being developed.

The fuel cell operates at about 80-degrees C. To start the process, hydrogen gas flows through precisely milled channels in the plate on one side of the PEM (it looks like an automatic transmission valve body), while oxygen is pumped into the other side. The catalyst causes a reaction of the two gases -- hydrogen is ionized by the catalyst on one side. The free electrons stripped off the hydrogen atom are conducted (in the form of usable electrical current) through an external circuit. The protons migrate through the PEM to the cathode plate, where the catalyst causes them to combine with the oxygen and with electrons from the external circuit. Water vapor and heat are the fuel cell's only emissions.

Besides the oxygen pump, which on NECAR4 is a Wankel-type rotary unit, the system has no moving parts.

The hydrogen fuel can be carried on the vehicle as a compressed or liquefied gas, or extracted (reformed) from gasoline, methanol, propane or ethanol, also on board the vehicle.--LB

RELATED ARTICLE: Ballard: `Mainstream Technology'

In the last 10 years, Canada's Ballard Power Systems has risen from a 35-person R&D firm working mainly for the Canadian military to the world's best known independent automotive fuel cell technologist. With a growing staff of 1,000 worldwide, the publicly-held company develops fuel cells for everything from laptop computers to power utilities. It is preparing to mass-produce fuel cell stacks for a waiting list of major automakers, beginning in 2000 and ramping to about 10,000 units annually by 2003.

Clearly, Ballard wants to be your stack supplier. The company's first milestone was demonstrating fuel cells with power densities suitable for automobiles. In the meantime, it established a strong technology base, developing its own custom Proton Exchange Membrane (PEM) material and a unique, continuous process of manufacturing the bipolar plates. "Now, our challenge is to lower the cost of our designs and materials," explains President and CEO Firoz Rasul.

Though Ballard has developed fuel cells for the big OEMs, and has strong links with DC and Ford, Rasul asserts he'll keep his company independent. "We don't want to become captive suppliers," he tells AI. "The purpose of this exercise is to make money. This is mainstream technology we're developing. It's not a niche."--LB

RELATED ARTICLE: How Fuel Cell Vehicles Will Impact The Auto Industry


Will change the make/buy decision on major systems, especially the powertrain. Will drive acquisitions or joint ventures with fuel cell technologists (Ballard, IFC, Ecostar, etc.) or investments to manufacture stack, driveline, etc., in house.


Will accelerate use of lightweight materials. Will significantly replace or eliminate most internal combustion components. Will drive merger and acquisition decisions to reposition key players.


Will create investment requirements to develop hydrogen fuel sources. Will spur merger or alliances between fuel providers (that have infrastructure in place) and those that don't. Will drive capacity expansion for hydrogen, methanol.


Will create new market opportunities. Could reduce service business, putting strain on parts inventory storage capacity.


Will drive long-term investment decisions as participants reposition themselves. Will drive inventory management policies in parts suppliers.

Sources: McKinsey & Co., various industry sources
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Author:Brooke, Lindsay
Publication:Automotive Industries
Geographic Code:1USA
Date:Jun 1, 1999
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