SEPTEMBER 12, 2006

Autos

By Gail Edmondson


BMW's H-Bomb

BMW will introduce limited production of hydrogen cars in 2007, but don't expect to find one at your local showroom any time soon


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BMW aims to clock another milestone next April in the long road to bringing clean-burning hydrogen cars to market.


The German luxury auto maker announced Sept. 12 it will launch limited production next year of 7 Series luxury sedans with an engine that can run on both gasoline and hydrogen. When the engine burns hydrogen, the only emission is water vapor.

BMW will build only a few hundred hydrogen-gasoline 7 Series, which will be leased to opinion leaders such as politicians to prove hydrogen technology to power cars is feasible. The lease rates will be comparable to those for a high-end BMW 760 LI. For now, hydrogen cars aren't commercially viable because there are no economies of scale and no filling stations in most countries for customers to tank up with hydrogen.

GAS OPTION.  "The technology is still in its early stages. But there will be a revolution when it finally arrives," says Raymond Freymann, head of BMW Group Research & Technology, the auto maker's Munich-based skunkworks.

Germany has only a handful of hydrogen fuel stations, including one in Munich and one in Berlin, built in part to serve BMW's R&D
project with hydrogen cars. If the cars aren't near hydrogen filling stations, they simply run on gasoline. That's why the next vital step is convincing political leaders to support the creation of an alternative infrastructure of hydrogen filling stations.

"We want to show the world that the concept is convincing. The key to opening up a possible market is a product," says Daniel Kammerer, head of BMW's CleanEnergy Communications division.

BMW's announcement comes after several years of performance and durability tests on an in-house fleet of prototype hydrogen 7 Series, which already have clocked more than 200,000 kilometers.

30 YEARS OF RESEARCH.  BMW is one of a handful of auto makers—including General Motors (GM), Honda (HMC), Peugeot, and Mazda—which are placing big bets on hydrogen as a future alternative fuel. BMW is particularly interested in seeing hydrogen technology succeed, since it believes only hydrogen engines—not electric hybrids or fuel cells—can power the kind of high-performance cars that are the essence of BMW's sporty brand image.

BMW's engineers, who started working on a hydrogen car in 1976, have already built five generations of hydrogen engines and a 285-horsepower hydrogen race car called the H2R that has racked up nine speed and acceleration records at a French racetrack, reaching speeds of 185 mph. The H2R's record-breaking performance "marks the start of the hydrogen age," says BMW development chief Burkhard Goeschel. BMW's new hydrogen 7 Series will have a 260-horsepower bi-fuel engine with a top speed limited to 143 mph, and will accelerate from 0 to 62 in 9.5 seconds.

Another constraint until hydrogen fuel is plentiful: The bi-fuel 12-cylinder 7 Series will need two separate fuel tanks. That technical challenge limits the logic of putting the technology in other models for now. The German auto maker is also working on fuel-cell technology, like most rivals, but it remains convinced that hydrogen is the best alternative technology for the future. BMW sees hybrid technology as an intermediary technology on the way to hydrogen cars and aims to offer hydrogen versions of all its cars in the long term.

OTHER OFFERINGS.  BMW estimates that the era of hydrogen-fueled cars is more than 10 years off—and that by 2025 only 2% of new cars sold in Germany will be hydrogen cars. That translates into some 140,000 vehicles. "This is the opening of a market," says Kammerer. But global demand may be prompted by experiments in foreign markets too. California Governor Arnold Schwarzenegger is backing the construction of a "hydrogen highway" in California, a corridor which will be dotted with hydrogen filling stations.

Honda has shown its FCX hydrogen-oxygen fuel cell concept car, which is three to four years from production. Honda is also working on a "Home Energy Station" to get around the limitations on refueling, which can also meet residential energy needs, supplying electricity and heat by generating hydrogen from natural gas. Honda says the system can lower a home's total energy consumption by 50% and reduce carbon dioxide emissions by 40%.

And Mazda has unveiled a hydrogen Mazda 5 hybrid-electric concept car using a rotary dual-fuel engine.

Edmondson is a senior correspondent in BusinessWeek's Frankfurt bureau


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