Societal Life-Cycle Buy-Down Cost of Hydrogen Fuel Cell Vehicles

Societal life-cycle cost is employed for evaluating hydrogen fuel cell vehicles (FCVs) as compared with conventional gasoline vehicles. This metric includes consumer direct economic costs over the vehicle lifetime and external costs resulting from air pollution, noise, oil use, and greenhouse gas emissions over the full fuel cycle and vehicle lifetime. Noncost social transfers such as taxes and fees and producer surplus associated with fuel and the vehicle are also considered. Two different accounting stances are explored for estimating producer surplus for fuels: U.S. and global perspectives. Three different scenarios developed by the U.S. Department of Energy for hydrogen and FCV market penetration from 2010 to 2025 are analyzed. FCV costs are estimated by using a learning curve model characterized by three factors for key fuel cell stack components and auxiliary subsystems. The delivered hydrogen fuel cost is from the University of California, Davis, SSCHISM hydrogen supply pathway model. External costs are estimated by using the advanced vehicle cost and energy use model and the life-cycle emissions model (LEM). Upstream air pollution damage cost is estimated with the LEM and a simple normalized dispersion term method. The results show that FCVs become competitive with gasoline vehicles as their production volume increases, although the cost difference between these two vehicle types is initially very large. The cumulative investments needed to bring hydrogen FCVs down to societal life-cycle cost parity with gasoline vehicles (the buy-down cost) would be on the order of U.S.$10 billion, which depends on future gasoline prices and valuation of externalities.