Thursday, April 25, 2024
NewsShell Pulls Out of the Hydrogen Market in California

Shell Pulls Out of the Hydrogen Market in California

Shell has announced it will shut down its hydrogen filling stations in California.

  • This means about 12% of all hydrogen refuelling stations in the State will close.

  • The company had also cancelled its plans to build more stations back in September.

  • Shell will continue to provide hydrogen for heavy trucks, but will focus on EV charging for passenger cars.

Shell has announced it will close all of its hydrogen fuelling stations in California, effectively shutting down 12% of the State’s network.

This number seems very large, but it is worth remembering that there are currently only 55 hydrogen filling stations in California, the only American State where the network is developed enough to make hydrogen fuel-cell vehicles a viable option for many drivers.

As such, Shell will only close 7 stations in total, of which five had already stopped serving customers throughout 2023.

The company says this decision is the result of hydrogen shortages that have plagued the supply chain for the last few months, in addition to “external market factors”, namely a lack of demand.

Therefore, Shell’s decision doesn’t come as much of a surprise, especially since the company had already cancelled its plans to expand its hydrogen fuelling network for passenger vehicles back in September.

Indeed, the energy supplier had previously planned to open 48 new hydrogen stations in California, pretty much doubling the total number of service stations available to vehicles powered by hydrogen in the State.

Now, Shell says it will concentrate its hydrogen efforts on heavy-duty trucks and transport vehicles rather than light-duty vehicles, preferring to invest in EV charging solutions for passenger cars instead.

In addition to the shortage of hydrogen and the lack of customer demand, Shell also mentioned its specialized equipment, supplied by Nel, as a source of concern, since the manufacturer is currently being sued by another hydrogen station operator in Japan who alleges Nel’s equipment has major faults.

While many automakers have expressed their optimism about hydrogen power for passenger vehicles, only Toyota, Honda, and Hyundai currently sell vehicles that use this fuel in California.

Due to this limited choice and likely to the small refuelling network, hydrogen-powered cars are not very popular in California, having sold only 3,143 units in 2023, making up about 1% of all electric vehicles sold in the State over the same period.

Despite this, Toyota, whose Mirai sedan is one of the most popular models in this small group of hydrogen fuel-cell vehicles, says it remains committed to supporting California’s hydrogen fueling network, while also recognizing that Mirai owners could experience fueling challenges due to Shell’s decision to close its stations.

Industry experts have previously expressed doubts about the viability of hydrogen power for passenger vehicles due to the high cost of filling stations and the difficulty of scaling eco-friendly hydrogen production methods to a useable level.

These experts also say that hydrogen power can have an advantage over fully-electric options in the case of heavy-duty vehicles, and it seems Shell shares this opinion.

Source: Carscoops

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