Panel, Conference Presentation
The Road to Profit in Alternative Fuels
Milken InstituteJoel Kurtzman, James Cameron, Yossi Hollander, Chris Hostetter, Andrew Littlefair, Paul Tellis, Zan Dubin-Scott, Tanner Krause, Rajiv Nair, Ahmed Heikal
- Toyota anticipates a market shift toward diverse fuel choices, projecting that fuel cell and electric vehicles could comprise over half of vehicles in California by 2030 and beyond, driven by an 80% greenhouse gas reduction mandate by 2050.
- Toyota plans to introduce a mid-size four-door fuel cell vehicle in California next year with a range exceeding 300 miles and a three-minute refuel time, aiming to scale from thousands to the majority of sales within 15 years while targeting 60 hydrogen stations by the end of 2016.
- Toyota predicts fuel cell costs will become cheaper than internal combustion engines between 2025 and 2030, with a cost reduction rate twice that of batteries over the next two generations, supported by expectations of green hydrogen production from waste and the use of hydrogen for grid storage.
- Clean Energy Fuels Corporation and other speakers identify natural gas as the next major market for heavy-duty trucks, citing a price advantage of $1.50 to $2.00 per gallon over gasoline or diesel and noting that every major original equipment manufacturer now offers natural gas engines.
- Yossi Hollander forecasts that while heavy-duty conversions are booming, a six to 12-month wait for parts and prohibitive EPA certification costs remain primary obstructions, with methanol conversion estimated at $100,000 to $150,000 per station versus at least $1 million for CNG or hydrogen.
- Yossi Hollander expects massive scale for alternative vehicle strategies to begin in 2030 or later, while predicting corn ethanol will remain the cheapest solution in Iowa for the foreseeable future and methanol from waste will be cheap in Los Angeles due to negative disposal costs.
- Infrastructure challenges include the time required to convert 118,000 gasoline stations, with only 5,000 diesel depots currently in the U.S., though California and other nations like Germany, England, and Japan are actively building networks of roughly 60 to 100 hydrogen stations.
- James Cameron and others suggest future innovations will emerge from the intersection of fuel and electricity engineering, with distributed power systems offering greater cyber resilience than centralized models despite the sector having been historically neglected by investors.
- Various speakers warn that the transportation fuel market faces a "chicken-and-egg" dynamic where station revenue depends on vehicle volume, a situation expected to be resolved through state subsidies, collaboration, and potential regulatory shifts allowing lower conversion costs of $300 or less for existing cars.
- Long-term predictions indicate that by the 2030s, various forms of electric cars will likely dominate new sales, though maintaining a single solution is viewed as expensive, whereas a diverse fuel mix could result in doubled mileage with high-octane fuels and potentially massive GDP growth if market access is liberalized.