You should be very bullish on fuel cells. Their time is now, and there is money to be made.
Last week, Sprint announced a plan to put fuel cell-powered relays on top of buildings and cell towers, as they are more reliable than diesel generators or batteries for backup power.
Hyundai has come out with a fuel cell-powered SUV that it will start leasing at $499 per month.
Toyota has also announced a new hydrogen fuel cell-powered car that it will sell in 2015. The concept car runs on a Lexus HS body and is powered by a “stack” that fits under the front seat.
Consumer Reports liked it:
“On the road, the FCV, enclosed in a Lexus HS body, felt just like any electric car. It showed an abundance of effortless power right out of the gate and a quiet glide throughout. Maximum speed is 100 mph. The ride is compliant and typically Toyota unobtrusive. Handling is reminiscent of a Prius or Lexus HS, which means it’s a bit mundane and uninviting. But here’s the thing: It takes just 3 to 5 minutes to fuel up and give the car a 300-mile driving range, according to Toyota. No battery-electric car can come remotely close to that.
Fuel cell vehicles are electric cars that use a fuel cell, which produces its own electricity, instead of battery-stored electricity. A chemical reaction between hydrogen and oxygen from the atmosphere produces the electricity needed to spin the vehicle’s electric drive motor. Manufacturers the world over have been working on this technology for more than 20 years but cost and the lack of infrastructure have been major obstacles.”
Cheaper, Lighter and Stronger
Back in 2007, Toyota came out with a Highlander fuel cell hybrid vehicle. It could go over 300 miles on a tank of compressed hydrogen, but it cost more than a million dollars a vehicle. In contrast, the new Toyota FC will cost just $50,000 to make.
That’s a 95% reduction in cost in just seven years and without economies of scale, which means they are only going to get cheaper.
The new fuel cell stack is one-third the size of the old one and produces twice the energy. It can be refueled in three to five minutes.
Fuel cells also benefit from producing only water and oxygen in exhaust. This will go far in helping to meet the new California zero-emissions laws.
We Have No More Power
Obviously, there is no infrastructure for hydrogen-powered cars. Right now, there are only nine public filling stations in California for refueling hydrogen fuel cell cars. But Toyota will help finance another 91 by next year.
I don’t know if Toyota will ever make money on fuel cell cars; no fuel cell company has ever made money. But I do know we now have proof of concept.
Fuel cell companies have been beaten with the ugly stick for about 15 years now. They are cheap. The average market cap is under $200 million.
That said, they are starting to move higher. One company I’ve told my readers to invest in has gone from $0.17 to $3.65 in the past year. Another one in my portfolio has doubled since December.
These fuel cells stocks are just starting to run… but cars won’t be the major use.
No, it will be in energy storage. Everywhere you now see a battery, you will soon see a fuel cell. They will be in phones, toys, boats, airliners, and — most important of all — electricity storage.
Fuel cells are infinitely scalable, much less expensive than batteries, and they work much longer. Furthermore, they can be charged in non-peak hours using formally wasted energy.
This is the year they hit the tipping point of low cost and rapid expansion.
Fuel cell companies will be profitable this year. And I know when a company goes from losing money to making money, its stock takes off.
You want to own fuel cell stocks now.
Until next time,
Christian DeHaemer
