BMW’s Hydrogen Fueled Future
BMW's vision of a hydrogen-powered transportation industry is ambitious, but it is unclear whether they will move quickly enough to make it a reality.
The Automobile Industry
Given the undeniable evidence of global warming, transportation’s large contribution to the global CO2 emissions makes the industry a prime target for government regulations but also one with opportunities to innovate and capture value.
Transportation’s energy source has historically been largely petroleum with little dependencies on renewal energy. However, we have seen in recent years the push towards more sustainable means due to governmental, competitive, and public relations pressures.
BMW, one of the world’s foremost luxury automobile manufacturer, faces a particularly daunting challenge to shift towards renewal energy as its primary markets (the EU and US) has aggressive emissions targets mandated by their respective governments. In addition, it also faces Tesla, a luxury electric car manufacturer, who entered the already competitive luxury automobile market.
Apparent in the most recent COP21 conference, the pressure to shift towards sustainable energy sources is further mounting. This lead to the European Automobile Manufacturer’s Association (ACEA), the main lobbying and standards group of the automobile industry that BMW of is a member of, to establish a framework on how they envision addressing the challenges of climate change. 
BMW’s Vision and Approach
For over 10 years, BMW has been investing in the development of automobiles that can use alternative energy sources. More specifically, BMW’s vision of the ultimate solution for sustainability is through hydrogen cell fueled cars.  This idea, along with the vision of more broadly designing cars that are highly fuel efficient is what the BMW CleanEnergy initiative comprises.
In 2006, BMW unveiled the Hydrogen 7, the company’s first foray into production-ready hydrogen cell fueled cars. While it was an engineering feat at the time, there were limitations to this model. The car had a slower high speed than its petroleum consume counterpart (the BMW 7 Series), weighed more, and had a base price tag of over $100,000 USD. Most importantly, the car was actually less fuel efficient in its consumption of hydrogen compared to petroleum (normalized on volume consumed vs. distance traveled) not to mention the need for an infrastructure to deliver hydrogen to customers. 
Recognizing the large gap between where the technology and infrastructure currently is and where it needs to be, BMW decided that it needed to buy time while still working towards minimizing emissions and ultimately having a sustainable product.
To do so, they focused on two shorter-term goals:
- Optimize existing technologies
- Debut BMW’s own electric cars
Optimizing existing technologies: This meant making their existing gas guzzling luxury sports cars run more efficiently without sacrificing performance. This came in several forms :
- Lightweight construction of the body of the car such as using carbon in the passenger cell and aluminum in the chassis (“BMW EfficientLightweight”)
- Better aerodynamics
- Better energy management through features such as the “Intelligent Start Stop” function that automatically shuts off the engine during the drive
Electric cars: In 2014, debuted the i8, a luxury sports car costing $140,700 MSRP, and the more affordable i3, a five-door urban electric car at $42,400 MSRP.
The two short-term strategies combined has since helped BMW lower their emissions from 145 grams of CO2 per km in 2011 to 127 g CO2/km 2015.  However, BMW maintains the vision to have hydrogen cell fueled cars as the long-term solution. As it currently stands, a mass market hydrogen-powered BMW will not be available until after the components are ready in 2020. 
Can they do more?
While BMW seems to be doing well with their short-term goals, it is critical that they increase their pace of development and introduction of their hydrogen-powered automobiles to the market. With Tesla and other competitors pushing electric cars aggressively into the market, consumers are starting to develop habits and trust around that technology. If BMW truly believes hydrogen is the future, their late entry into the market and potential need to change consumer habits/preferences away from electric cars may prove challenging.
In addition, they will need to invest heavily into building the infrastructure for consumers to refuel their hydrogen fueled cars conveniently. Tesla has already been investing heavily in researching superchargers and investigating multiple alternatives to not just meet but exceed the current level of convenience with gas cars. Hence, the wide-spread adoption of BMW’s hydrogen cell fueled cars will also depend heavily on their ability to build an infrastructure to service these type of cars.
Exhibit 1: International Energy Agency, “Transport, Energy, and CO2: Moving Toward Sustainability” (PDF file), downloaded from IEA website, https://www.iea.org, accessed November 3, 2016.
Exhibit 2 and : European Automobile Manufacturers Association, “ACEA Position Paper: The COP21 Climate Change Conference” (PDF file), downloaded from ACEA website, http://www.acea.be/, accessed November 3, 2016.
: Bruno Vanzieleghem, “BMW official announces the BMW Hydrogen 7,” AutoBlog, September 12, 2006, http://www.autoblog.com/, accessed November 2016.
: Ronald M. Dell, Patrick T. Moseley, and David A. J. Rand, Towards Sustainable Road Transport (Academic Press, 2014), p. 282.
: BMW, “BMW EfficientDynamics”, http://www.bmw.com/com/en/insights/technology/efficientdynamics/2015/index.html, accessed November 2016
: BMW, Sustainable Value Report 2015, p. 13
 and Cover Photo: Ronan Glon, “While You’re Charging Your EV, BMW is preparing for a hydrogen future,” Digital Trends, March 27, 2016, http://www.digitaltrends.com/, accessed November 2016
Student comments on BMW’s Hydrogen Fueled Future
It was interesting to know the fact that while, as I wrote in my post, Toyota is not introducing any EVs, BMW’s products lineup contains both EVs and FCV. Infrastructure is definitely a problem for this technology. You mentioned in the post “BMW decided that it needed to buy time while still working towards minimizing emissions and ultimately having a sustainable product”; I thought that BMW’s approach seems to be more reasonable than Toyota’s approach of ignoring EV technology and only focusing on hydrogen-fueled vehicles. It would be interesting if you could provide some information about what kind of approach BMW is taking to enhance infrastructure development.
It would be interesting to understand in further detail the fully-burdened environmental impact of hydrogen fueled vehicles, and how exactly BMW is thinking about them (vs. electric cars). I know that people like Elon Musk have been extremely critical of hydrogen cars in the past (pointing to the low efficiencies associated with splitting water, compressing or liquefying hydrogen, etc.). Here’s a clip of Elon Musk commenting on hydrogen cars: https://www.youtube.com/watch?v=Y_e7rA4fBAo
The 2020 timeline you noted above doesn’t seem very ambitious, and I wonder whether this is partly due to the fact that BMW is splitting its resources between electric and hydrogen vehicles. Perhaps the company is better off just focusing solely on electric vehicles, a space that seems to have more consumer momentum.
I think BMW should differentiate itself and go all in on hydrogen cars. I would love to see the greenhouse gas emissions numbers for hydrogen-powered and electric cars. The problem with electric cars is that the processes that go into making electricity are still not yet renewable. While there are more and more wind and solar farms, a lot of electricity is generated using natural gas and, depending where you are, coal. So while people love seeing electric cars because they themselves have low emissions, the emissions are just coming further upstream.
Hydrogen-powered cars run into similar issues. While electrolysis is the cleanest method of producing hydrogen for fuel cells, only 4% of hydrogen is produced this way. The other main method is steam reforming from natural gas.
This brings me back to my original question. Say I have one electric and one hydrogen powered car. What is the net carbon output to the environment to make that car go a certain distance? It’s probably tough to measure but would be good to know.
Very interesting article, I have not been aware so far of BMW’s earlier hydrogen program. I would be very interested in learning more about how BMW actually positions their strategy in terms of sustainability. If you look critically at the i3 and i8 models that BMW has introduced, you can quickly see how technologically inferior they are compared to Tesla models. Driving the i8 not on a hybrid mode, but on a pure electrical mode, it can go only 30-37kms before having to recharge while the larger Tesla models can take up a distance of a couple of hundred kms.
My very personal opinion is that BMW has not done enough in the past years to realize and accept the change that is happening and will eventually have to pay for this in the next decades – a challenge that many German companies face nowadays.