Hawkeye: Thank you for discussing issues, and thank you for pointing out an error of mine, although your correction of it was incorrect. The exact language of the report was as follows:
"Fuel cell vehicle introduction will focus initially on the three states in the U.S. requiring the sale of Zero-Emission Vehicles by 2003 (California, New York and Massachusetts), as well as Germany and Japan. These highly populated areas are strong candidates for early adoption because they tend to have higher levels of pollution and offer maximum scale efficiencies for the first wave of methanol fuel infrastructure. It would cost less than $500 million to convert 10% of the stations in these target areas to methanol operation. assuming that methanol retail stations are required to cover all of North America, Europe and Japan the cost would still only be $1.9 billion for 10% of the stations and $4.7 billion for 25% of the stations."
My error was in not reading it carefully enough and thinking that the figures at the end applied to just the three states plus Germany and Japan, whereas it evidently means all 50 states plus Germany and Japan. So the initial capital cost for all the US, Germany and Japan would be about $19 billion (1.9/10% and 4.7/25%), not under $10 billion as you said or the much higher figure I guessed. As I mentioned previously, that doesn't include the ongoing interest expense on the capital tied up in the tanks and the methanol, and any opportunity cost if the methanol tank and pump replaces an otherwise profitable gasoline or diesel tank and pump.
In any event, this is an expense that someone is going to have to pay some significant portion of up front. If too few gas stations in the country carry methanol, people won't buy fc powered cars. I don't know what that percentage is - 10% might do it, or people might want to know that at least half the gas stations can serve them before they buy a fc car. My guess is somewhere in between those two figures, but reasonable people could certainly differ.
So who is going to pay for this? A rational gas station owner won't until there are enough fc cars around to do enough business. At first thought a combination of Daimler, Ballard, Ford, might rationally choose to spend the money, but these companies are not all in the same boat. Ballard will be spending its cash heavily over the five years to fund its share of the R&D, and won't be in a position to buy methanol set-ups for too many gas stations.
DCX and F will be capable of writing that kind of check, but would they want to? This would be an additional huge subsidy on top of the losses they expect to have for several years making the cars, and would provide a free ride for competing car makers. Plus, they do perfectly well selling conventional cars; Ballard will need this much more than they do, so I would expect any subsidy to come out of Ballard's hide, one way or another. I will elaborate on this point further if it isn't clear.
Hybrids don't have to spend a penny subsidizing any new infrastructures. One can buy a Toyota Prius or the new Honda car on the first day they come out next year and immediately drive them coast to coast. Their mileage and emissions profile blow away existing vehicles. With on the road experience, they will have years to get better before the first fc cars come out.
If fc cars were truly zero emission vehicles (i.e., they ran on hydrogen), then they might be better than a hybrid. But they won't be. Reforming methanol to create hydrogen causes some emissions (not huge, but not zero) and hurts efficiency, and reforming gasoline is worse on both counts.
If someone came up with a major, major breakthrough in hydrogen production and storage, drastically lowering the cost, I could easily be bullish on Ballard. That will happen some day, I believe, but it could well be 20 or 40 years from now. Until then, I think that the odds favor hybrids and other variants on existing technology.
Again, thanks for noticing my error. Assertions here to the contrary notwithstanding, I hate making making any errors in fact. I will now go over to the Yahoo board and post a correction there. Once again, I invite anyone who finds flaws in my facts or reasoning to tell what I have wrong, and why.
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