The global hydrogen revolution for commercial vehicles is already underway, says Craig Knight – and his company, Hyzon Motors, isn’t waiting around for traditional heavy-vehicle makers to go to market with fuel-cell trucks and buses.
“Hydrogen as a fuel for commercial transport is a reality today, not a decade from now,” he said in the introduction of a virtual ride event from Hyzon’s Netherlands facility on March 17. That facility is already assembling hydrogen fuel cell vehicles and the first ones will be delivered in Europe within a few months.
Although Hyzon is an expert in fuel-cell membranes, not in building commercial vehicles, CEO Knight says it expects to have Hyzon-branded, and Hyzon jointly branded, heavy-duty trucks in Europe and Class 8 demonstration trucks deployed to in the U.S. by the end of 2021.
If you’re like us, you’ve probably never heard of Hyzon Motors, at least not until recently. So we talked to CEO Craig Knight about his company and its goals. Following is a version of that interview, edited for clarity and length.
Q: You popped onto the radar screen fairly recently, so tell us about what you’re doing.
A: We're kind of an 18-year-old startup. The parent company that founded this business, Horizon Fuel Cell Technologies, is a company that I set up in 2003, together with our Chairman George Gu and some other guys. I no longer work in that business. I am 100% focused on this downstream, what we call an application business, for fuel cell technology.
Trucks and buses are just an application for the core technology that's been developed over this 17- to 18-year journey. In our experience in this sector, we've been able to assemble quite a bit of relevant IP [intellectual property] for designing and building fuel cells, and the components and sub-assemblies you need to make a fuel cell a useful thing. So, for example, we’re making our own MEAs [membrane electrode assemblies], which are really at the heart of a fuel cell – that's where the magic happens, where the reaction occurs.
We've had a lot of experience making and putting to use air-cooled fuel cells, and in the last five or six years have been very focused on liquid-cooled fuel cells, which are usually larger, higher-powered fuel cells. The liquid-cooled fuel cells we specifically set out to design and build for commercial transport.
In our considered opinion, the slam-dunk use case for hydrogen is heavy, high-utilization vehicles. A big vehicle that gets driven many hours a day is a bloody hard thing to get off fossil fuels without hydrogen. So we focus on those heavy kind of payload-imperative type vehicles, where they're paid to carry weight.
In the early stages, [we're focusing on vehicles] that operate on a back-to-base model. So this can be urban transit buses that run a lot of hours a day and come back to a depot, concrete trucks that go out of a plant and come back in to a depot, cold chain logistics delivery type trucks that go out a refrigerated warehouse and do all their deliveries around a city and come back, refuse trucks that go out of a depot and come back.
The use case for hydrogen in these kind of scenarios is really very compelling, because you're not dependent on the wider build-out of a hydrogen network to create viability at the fleet level. You just need one piece of hydrogen infrastructure.
Q: Are you building the entire fuel cell or just the MEA, the membrane electrode assembly?
A: The MEA is to be made in a new facility just announced in Chicago, and the fuel cell itself is to be made in the facility where I've been sitting the last few months in Rochester, New York [where Hyzon Motors is headquartered). Fuel cells will be built [in Rochester] and integrated to become essentially like fully integrated power trains, like engine replacements.
Q: And you do all the power electronics and cooling systems and everything as well, or does the truck manufacturer do all that?
A: Because the electric drive is a very different beast than the mechanical drive, the cooling requirements are different, because you need to cool the battery and the fuel cell. The design of the electric drive, the vehicle control units, how well the DC power is managed, all that is part of our activity and where we focus. We focus on everything from getting hydrogen into the thing that creates the power, the fuel cell, and getting that power to the wheels. So that's kind of our role. We don't build the wheels, we don't build the chassis, we don’t build the cab seats and the wind screens and everything – but everything to do with how you make that thing run on hydrogen. The other stuff we consider non-core.
Q: You're talking about producing quite a number of these things.
A: Up to 12,000 vehicles can be powered by that amount of MEA. So the fuel cell assembly plant we’re designing to a capacity of about 10,000 vehicle systems. And the MEA plant has to be able to supply that at least. So the MEA production facility is designed to be around about membranes for about 12,000. If you could run everything full tilt, you'd have some spare membranes if people wanted to buy them, I guess.
Q: Does the market exist for 12,000?
A: That's what we’re here to create.
Q: The MEA, you're not talking about one fuel cell assembly, but the entire stack, right?
A: Yes. When we talk about 12,000 units, that's 12,000 fuel cell stacks or systems that can power a vehicle. One MEA layer is a key component of a single cell, and you have 300 or 400 of those in a big stack. So we're talking about 12,000 stacks, not 12,000 MEA. So 12,000 engine replacements if you like, which becomes 12,000 vehicles, if they're a normal sized vehicle, or somewhat less if you've got really massive things like a road trains, or like traditional trains, or mining equipment powered by these things where you might need more than one stack.
You're talking about a scale that nobody's entertained before. You're talking about thousands of megawatts. So just to put that in context, the parent company Horizon Fuel Cell last year shipped over 36 megawatts of powertrains, which by global standards is a lot. But when you look at the scale of the truck industry, it's peanuts.
So at the moment the parent company could make hundreds of megawatts at full tilt, but there just hasn't been enough demand to do hundreds of megawatts. But we are pushing towards this application which has the potential to require far more fuel cells than anybody's ever built.
The nice thing about making a lot of fuel cells and putting them in a lot of trucks is that fuel cells are a cradle-to-cradle technology – you don't create a disposal issue with fuel cells. You can reuse everything in the fuel cell. We've even been talking to suppliers of platinum about the idea of borrowing the platinum from them instead of buying it. If there's an end-of-life truck that’s worn out, we can take the platinum out and put it in another fuel cell – reuse it, so there's no disposal consideration. You recover almost all of the platinum, like within 1 or 2%.
It's very different to battery chemistry, where you have to react the components to get the chemistry.
Q: So this 12,000 number, does that include North American production or global production?
A: That's going to supply all of the Hyzon Motors customers, everywhere, essentially. Within China, we would possibly purchase fuel cells from Horizon to put in Chinese vehicles. But our focus markets are Europe, North America, Australasia – the Western markets, if you like. At the moment, most of our orders are from Europe, Australia, and New Zealand.
Frankly, the U.S. is a little bit behind. We're only going to start deploying the first validation vehicles, the early trials with North American customers in California in the second half of this year. We will be deploying vehicles into about seven or eight different countries this year.
Q: How's the fuel-cell commercial vehicle market in those countries – Australia, New Zealand, Europe – compared to North America?
A: So in terms of penetration for hydrogen, it's still very early days, frankly. We're shipping our first shipments to Australia in the coming months, you know, and we’re the first in the market. In Europe, it's a little more developed, and we've got customers that are already driving fuel cell vehicles that were actually delivered by our JV partner over there. We set up a JV with them to do the local assembly, but using all of our fuel cell and hydrogen and control systems and all the rest of it under Hyzon Motors Europe.
We can tee up the hydrogen supply for the fleet operator relatively easily in quite a few European main cities now. And that's just a sign of things to come. This is not a science experiment anymore.
Q: Globally, we have a whole bunch of truck manufacturers – Paccar, Daimler, Volvo, Hyundai, and others – working on hydrogen fuel cell vehicles. And we also have a lot of hydrogen fuel cell people, like Ballard and Loop. Will you be able to get your fuel cells into people's trucks?
A: We spoke to some of the original equipment manufacturers when we were considering how best to create a global business around the fuel cell powertrains that had been developed by the parent company. But it was very obvious that they were not going to act with the kind of haste that we felt was warranted and, frankly, was of interest to us. So we could have worked with one or more of those guys and worked on their pace. But you know, we may have died in the meantime, because they are in no hurry to take diesel engines out of their trucks, frankly.
Now, that puts us in an interesting position. It means we could be an interesting supplier for some of those existing OEMs, but they also don't like to dilute their value proposition in the marketplace by using essentially someone else's engine. So we saw not a great level of enthusiasm to do that from truck OEMs.
Q: There’s plenty of OEs we hardly ever hear about in places like China, India, Africa. Are you talking to those people?
Some, but we're more focused on the developed markets because the move towards hydrogen is earlier, frankly. We are selling into a number of different countries, they all have different local regimes, but they all have a similar decarbonization imperative. And that's why we're strategically positioning ourselves in seven or eight of these countries that are taking quite a strong lead on hydrogen adoption.
And the U.S. is a little behind, but we see California as a fantastic market in the next several years, and we believe that California will just be the bellwether for this transition, because once California does the hard work, and we do the hard work with them, to get things established, deploying increasing numbers of hydrogen production facilities and increasing fleets running on hydrogen, the marginal cost of doing more and more hydrogen tractors coming down and down and down as you go forward.
We think that that's a very nice differentiation versus moving towards battery-electric trucking, because increasing penetration of battery electric tracking will face an increasing marginal cost of adoption. Due to grid limitations, due to infrastructure challenges within depots and so on, and due to the as yet elephant in the room issue of non-reusable materials.
Q: Everybody's after green hydrogen, but that doesn't really exist in great quantities yet. So are you prepared to advocate gray hydrogen or some other “dirtier” form in the interim, just to get this thing moving?
A: We advocate getting off diesel onto hydrogen. Trucks don't care what color the hydrogen is. We have a preference to go to green hydrogen, but we will not dictate to our customers what color they use.
It is our view that, just like renewable electricity is now the cheapest way to make power, green, hydrogen will become the most cost-effective way to make hydrogen. It will be the most cost effective path to supply fuel to vehicles.
We are strong advocates of localized hydrogen production models close to the point of usage of the fuel, so that you get away from the very challenging nature of hydrogen, which is transporting it to where it needs to be used. If you make the hydrogen somewhere close to the point of consumption, then your cost structure around dispensing is not unreasonable. You need to get to a decent scale for good economics of say a filling station, but with for example, material handling, warehousing type facilities running forklifts, they get to half a ton a day throughput of hydrogen without too big a challenge.
If you've got a depot full of buses or a container yard full of trucks, you get to a lot bigger scale than a warehouse running forklifts. Believe me, it's 20 to 30 times as much your hydrogen, you'll push through each bit of infrastructure. So that would suggest that the cost structures around putting hydrogen in buses and trucks will be significantly more attractive than the cost structure of putting hydrogen in the forklifts.
With that, it means the dispensing and supply and everything's economic, you still need the base production to be economic. So in our view, there are going to be a number of different hydrogen production technologies that come to light and become commercially attractive here in the next two or three years. And we are working with a number of partners on validating scale production of hydrogen that are not necessarily solar panel, solar panel plus and electrolyzer. It's something a little more creative than that. There are a number of options, and we're working on several.
And that's the sort of thing we'll be able to announce going forward. As we set up these hydrogen hubs with fleet operators, we’ll be able to say, here's how we're doing this, here's how we're getting to a really cost effective means of producing and supplying the hydrogen, here's how the truck can run at the same cost as it used to run on diesel.
That is the way we are viewing our task in terms of getting to a tipping point on adoption of these vehicles – we must get to the cost structure that approximates diesel. And in our view, we will be able to demonstrate the first of those types of local hydrogen production for fleet operations at diesel parity or better. The first place we’ll do it is in Australia. And that will be within the next 18 months. Not in 10 years.