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Auto Industry Giants Invest in New Energy Vehicles

In moves that will spur new energy vehicle demand, two new auto industry partnerships provide a look at a low-carbon economy of the future.

First, Honda Motor Co Ltd and General Motors Co (GM) have announced ambitious plans to expand pollution-free hydrogen fuel power systems in the US from 2020, a move that will not only create new jobs, but also drive forward the shift away from fossil fuel-dependent vehicles.

The companies revealed during a briefing in Detroit that they will invest $85 million to add a production line at a GM battery plant in Brownstown, Michigan, which is expected to create 100 new jobs. The fuel cell production line will be partly automated and is designed to be scaled up quickly if demand requires it. Both GM and Honda will hold 50 percent of the newly formed Fuel Cell System Manufacturing LLC, and their future fuel cell vehicles will share the same power system from 2020.

The two companies are among a handful of automakers to develop fuel cell vehicles, which combine hydrogen and oxygen to produce electricity and emit only water. However, a lack of infrastructure and low prices at the pump have geared consumers towards more traditional vehicles.

GM executive Mark Reuss said that the fuel cells could be used by ride-sharing companies such as affiliate Lyft and autonomous vehicles. The company has also identified opportunities in aerospace and military applications.

Honda said fuel cell vehicles are a crucial component to the company’s new-energy car lineup, constituting two thirds of its vehicle portfolio by 2030 from 5 percent now.

“The United States is where demand for fuel cell vehicles is going to be among the highest so we’ve decided to consolidate our manufacturing operations into one location there,” said Honda spokesman Teruhiko Tatebe.

Since its launch in Japan and the US last year, only 118 of Honda’s Clarity Fuel Cell vehicles have been produced at a hefty price of 7.66 million yen ($66,795). Honda currently manufactures the vehicle’s components in Japan, but it plans to move production of fuel cell systems to the US in order to cut costs. It is unclear at this point whether the company plans to continue assembling FCVs in Japan further down the line.

GM has been toying with the idea of hydrogen as fuel since the 1950s, when it debuted a modified Chevrolet Corvair minivan.

Meanwhile, Toyota Motor Corporation (Toyota) and Suzuki Motor Corporation (Suzuki) have come together under a new partnership to improve future mobility through new environmental and safety technologies.

The Japanese car makers announced their intentions for a partnership back in October, signaling a desire to remain competitive in European and North American markets. Though Toyota has been conducting its own R&D in environmental, IT and safety technology, there is still more to be done.

“The words of Chairman Osamu Suzuki at our joint press conference in October last year— ‘If you are running a company, you have to continue to take on challenges. You are running your company for the benefit of society, and this remains unchanged’— deeply resonated within me,” said Toyota President Akio Toyoda.

“Both of our companies intend to apply to the fullest the spirit of ‘Let’s do it,” and we want to cooperate toward enabling all people throughout the world to truly experience the joy of mobility and to achieving a society of future full of smiles. I am truly thankful for having been given this opportunity to work together with a company such as Suzuki, which overflows with the spirit of challenge. Toyota looks forward to learning much.”

While the two companies have yet to reveal on what exactly they intend to work together, though it is expected that autonomous driving systems will be a top priority. Toyota is already a leader in low-emission vehicles and self-driving technology and teamed with Suzuki’s expertise in building compact cars, the two could help establish economies of scale for small hybrid cars.

Toyota has suggested that this is just the beginning, and that more partnerships could be on the horizon. “We would like to always keep our doors open for new partnership opportunities, which will contribute to the making of ever better cars as well as to the development of the auto industry,” Toyoda stated last year.


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