Ballard Power inks deal with Ford Company to supply fuel cell power to cars

By Lisa Sanders, CBS.MarketWatch.com Last Update: 4:07 PM ET Sept. 20, 2001

VANCOUVER, B.C. (CBS.MW) - Shares of Ballard Power climbed 9 percent Thursday after the fuel cell technology company said it's inked a deal with Ford Motor Co., it's largest to date.

Ballard (BLDP: news, chart, profile) rose $1.30 to close at $15.71 on the Nasdaq. Ford (F: news, chart, profile) shed 94 cents to close at $15.49.

Under the terms of the $22 million, three-year deal, Ballard will supply Ford with its Mark 900 Series fuel cell units.

Ford said it plans to launch its first fuel cell vehicle for consumer use in 2004.

"This is the largest order for Ballard fuel cells to date and represents Ford's commitment to deliver fuel cell vehicles," said Firoz Rasul, Ballard's chairman and chief executive.

BLDP takes full ownership of ventures (BLDP, DCX, F) By Michael Baron October 2,2001

Ballard Power Systems (BLDP) is gaining $3.16, or 16.7 percent, top $22.06, after the company agreed to acquire respective interests in XCELLSIS GmbH and Ecostar Electric Drive Systems LLC from Ford (F) and DaimlerChrysler (DCX) . These ventures were formed by the three companies in 1998. XCELLSIS develops proton exchange membrane fuel cell engines, while Ecostar develops electric drive trains. The deal calls for Ballard to issue a total of 18.4 million shares to DaimlerChrysler and Ford. The stock has a value of $348 million in U.S. dollars. Following the completion of the deal, Ford will own 19.5 percent and DaimlerChrysler will own 23.6 percent of Ballard. The companies also entered into a new 20-year vehicular fuel cell alliance agreement. In addition, DaimlerChrysler and Ford will invest an additional $110 million in Ballard.
http://www0.mercurycenter.com/premium/local/docs/fuelcell16.htm

Published Tuesday, Oct. 16, 2001, in the San Jose Mercury News

Study on fuel-cell cars calls for public funding

BY MATT NAUMAN

Mercury News

If fuel-cell vehicles are to become commercially viable, the government must spend millions of dollars to minimize the financial risks for car and oil companies, according to a new study.

That's because it will take years -- perhaps decades -- before anyone makes any money off of fuel-cell vehicles (FCVs) or the infrastructure needed to fuel and service them, the study says.

The study, to be released today, comes from the California Fuel Cell Partnership, a coalition of automakers, oil companies, fuel-cell companies and government agencies such as the state's Air Resources Board and Energy Commission.

The independent report was written by Robert Knight of Bevilacqua-Knight, a technical consulting firm for energy and transportation issues in Hayward.

This is taking a good first look at issues that confront industries and the legislation needed to bring a new technology to the marketplace that will be a benefit to society,'' said Peter Histon, a senior adviser for transportation and fuel for the BP oil company.

Although technical hurdles remain, the study's authors believe those can be overcome. However, making FCVs commercially viable will come with

high cost, difficulty and risk requiring public support,'' the study says.

Bringing Fuel Cell Vehicles to Market: Scenarios and Challenges with Fuel Alternatives'' will be presented today at the South Coast Air Quality Management District in Diamond Bar.

The study examines the promise and pitfalls of four fuel sources: direct-hydrogen, methanol, gasoline and ethanol.

A fuel cell is essentially a power plant that combines hydrogen and oxygen to create electricity. FCVs produce little or no pollution and are more fuel efficient than internal-combustion engines.

The Sacramento-based partnership was created in 1999. It plans to have 20 FCVs operating by the end of 2001 and 60 FCVs and 20 fuel-cell buses on the road by the end of 2003. The report calls for a major pilot project of 1,000 vehicles to be tested in commercial and government fleets in the future.

The report says federal and state governments will likely need to provide tax relief and tax incentives, underwrite fuel contracts, provide consumer price supports and even come up with some type of stranded investment insurance, in case the whole effort falls flat on its face.




Contact Matt Nauman at mnauman@sjmercury.com or (408) 920-5701. His fax number is (408) 271-3786.
Fuel Cell Cars Face Obstacles, but Said Viable

Updated: Tue, Oct 16, 2001 3:30 AM EDT

By Allan Dowd

VANCOUVER, British Columbia (Reuters) - Fuel cell vehicles can be commercially viable in California, North America's largest auto market, but a focused development effort and government help are needed to get them on the road, according to a study released on Tuesday.

The study, prepared for a private-public coalition testing the environmentally friendly vehicles, is one of the first detailed examinations of the hurdles faced by a technology that is sometimes hailed as a replacement for the internal combustion engine.

Car designers still faces obstacles, such as creating adequate fuel processing equipment on the vehicles, but if progress continues "all other challenges to (fuel cell vehicle) commercialization can be overcome," according to the study for the California Fuel Cell Partnership. http://www.fuelcellpartnership.org/

Fuel cells produce electricity from hydrogen by using a chemical reaction, but developers are at odds over what fuels the cars will reformulate to get the hydrogen. Alternatives range from special gasolines to methanol and ethanol.

The study said commercialization will come faster if developers agree the first cars on the market will use compressed hydrogen, and allow time to develop the equipment needed to reformulate hydrogen from liquid fuels.

"Automakers, fuel providers and government of all level must co-operate to develop an adequate public demand for FCV (fuel cell vehicles)," according to the study.

Automakers have forecast their first fuel cell vehicles would reach consumers between 2003 and 2005, but researchers warn it could take several years to reach a commercialization target of 2 to 5 percent of all vehicles sold in California.

California is seen as the first major market for fuel cell cars because the state's air pollution problems have forced it to push the automobile makers into developing alternatives to the petroleum-burning internal combustion engine.

The fuel cell is considered a green technology because the only direct byproducts of the process are heat and water, but the study cautions the vehicles are not "zero emission" because the fuel reformulating equipment creates pollutants.

GREEN BENEFITS NOT ENOUGH

The study said that while promoters of fuel cell vehicles must increase public awareness of the technology's environmental benefits, they cannot depend on that public support to make the cars a quick commercial success.

"FCV environmental benefits need to be presented as a pathway to long-term future societal benefits rather than early major improvements," according to the study, which noted some of the benefits may take decades to realize.

Government and industry must also recognize the potential non-transportation benefits of fuel cell vehicles, such as their ability to supply electricity to homes when not being driven, the researchers said.

A major obstacle to use of fuel cells in vehicles is the lack of fueling infrastructure. Even the gasoline eyed by some designers as a source of the fuel cells' hydrogen is different from the gasoline now sold, and would require service stations to undergo expensive retrofits.

The study warns government may have to assume some of the financial risk in building the fueling infrastructure. That would avoid a Catch-22 situation with energy firms leery of investing in infrastructure until fuel cell cars are on the road, but with cars unable to be sold until a fueling infrastructure is in place.

Among the suggestions offered by the researchers is that the U.S. federal and state governments could create a public corporation "to build, operate, and eventually sell the FCV fuel delivery infrastructure."

The study did not directly compare the economics of the different fuel types, but the researchers suggested ethanol faced the biggest marketing problems -- due largely to the a lack of adequate production capacity.

The researchers did not recommend a preferred fuel type, in part, because the California Fuel Cell Partnership includes private sector members that are promoting competing fuel technologies.

The first cars will likely be those aimed at corporate fleets, but the study said automakers must quickly introduce a wider variety of products such sport utility vehicles to interest consumers.

*AC Propulsion *American Honda Motor Company *AVS, Inc. *Columbia Par Car Corporation *Commuter Cars Corporation*DaimlerChrysler *DaimlerChrysler/Global Electric Motorcars *Electric Vehicle Infrastructure, Inc. *ENOVA *EPRI *Ford Motor Company *Hypercar, Inc. *ITS-UC Davis *Maxwell Technologies, Inc. *Methanol Institute *Millennium Cell *Powerzinc, Inc. *Solectria/Voltage Vehicles *Toyota

AC Propulsion, Inc. * American Honda Motor Company * AVESTOR Corp. * AVS- Advanced Vehicle Systems * Ballard Power Systems * CA Dept. of General Services-Fleet Administration * California Air Resources Board * California Energy Commission * California Fuel Cell Partnership * CALSTART / WestStart * Capstone Turbine Corporation * Chattanooga Area Chamber of Commerce * ChevronTexaco Ovonic Battery Systems LLC * City of Anderson Indiana * Columbia Parcar Corp. * Commuter Cars Corp. * Curtis Instruments * DaimlerChrysler Corporation * DOE Field Operations Program/INEEL * Ecostar Electric Powertrain & Power Conversion Systems * Electric Vehicle Infrastructure, Inc. (EVI) * eMotion Mobility * Enova Systems * EPRI * EV Global Motors Company * Ford Motor Company/TH!NK Technologies * Georgia Power * Global Electric MotorCars * Global Venture Investments * GM Advanced Technology Vehicles * Graziano Trasmissioni S.p.A. * Hypercar, Inc. * INMETCO (International Metals Reclamation Co., Inc.) * Lido Motors * Louroe Electronics * Maxwell Technologies * Methanol Institute * Michigan Economic Development Corp. * Millennium Cell * Nissan North America, Inc. * Porvair Fuel Cell Technology * Powerzinc Electric * Sacramento Municipal Utility District * Saminco Inc. * Solectria * Taylor-Dunn Corporation * Toyota Motor Corporation * U.S. Army NAC * University of California, Davis/ITS * US Department of Energy- Advanced Automotive Technologies * US Department of Energy-Clean Cities * VEAM * Voltage Vehicles * XCELLSIS The Fuel Cell Engine Company *

More than $8,000,000 was raised, all of which came from private sources. Corporations, foundations, unions, veterans groups, and civic organizations all contributed, but most importantly of all, were the more than 275,000 individual Americans who donated the majority of the money needed to build the Memorial.

Bonds have been used throughout U. S. history to foot the cost of waging war. The first bonds the government ever authorized — in 1790 — were to pay off the debts of the Revolution. And while income taxes helped pay for the Civil War and the two World Wars, war bonds played a big role in raising money — and popular support — for the war effort.

Liberty Bonds, as World War I bonds were called, raised $16 million — an enormous sum for the time — and were traded on the New York Stock Exchange. Many people held onto their bonds after the war, for sentimental or patriotic reasons, a bonus for the government because they didn't have to be repaid.

During World War II, war bonds were big business, not only raising huge sums of money but generating a mini-industry to market and publicize them. Dramatic war bond posters publicized the sales effort.

Department stores featured bonds in window displays and made change in war stamps. Schools sold them — at a nickel a week. Radio stations produced special programming, and the entertainment industry was mobilized. Nothing on quite that scale has ever happened before — or since. --- Wall Street Journal Guide to Understanding Money and Investing

http://www.bondresources.com/Agency/Education/Other_Bonds,_Other_Choices

More than 85 million Americans bought war bonds from 1941 to 1946, according to a Duke University site that catalogs wartime advertising. A series of eight separate drives run by the War Finance Committee raised $185.7 billion.

http://abcnews.go.com/sections/business/DailyNews/warbonds_010919.html

Duke University's Hartman Center for Sales, Advertising & Marketing History Web

http://scriptorium.lib.duke.edu/adaccess/wwad-history.html

The Treasury later began issuing Series E Savings Bonds in May 1941 to help pay for the United States' defense efforts. After Japan's attack on Pearl Harbor in December 1941, these bonds became known as war bonds, says Hollenback. Even though the proceeds from these bonds could have gone toward anything the government needed them for, Hollenback says they became best known for funding the war effort, since that's where most of the government's resources went at the time.

The public heeded the call. During World War II, the government raised more than $185 billion from war bonds from 1941 through 1945, with more than 85 million Americans purchasing them — more than half the U.S. population at the time.

Toyota hopes to become the world's first car maker to launch a hydrogen-powered fuel-cell vehicle for commercial use.

A newspaper reports the company will market a car using the futuristic technology next year.

Japan's top car maker plans to start selling its environmentally friendly FCHV-4 in the Tokyo area by the summer of 2003, according to the Tokyo Shimbun newspaper.

Fuel cell cars run on energy produced in a chemical reaction combining hydrogen and oxygen, making them virtually pollution-free.

The world's leading car firms have been developing fuel cell vehicles, but a high price tag has kept such cars out of showrooms.

Toyota's version will cost about 10 million yen (£55,000) [That's $75K in US], making the target customer large corporations and the government, Tokyo Shimbun said.

The launch will initially be limited to the Japanese capital because hydrogen refuelling stations for fuel-cell cars are already being set up there.

The top speed of the FCVH-4, which stands for "fuel cell hybrid vehicle," is 95 miles per hour. It has a cruising range of more than 155 miles.

The car is modeled after Toyota's Kluger V sports utility vehicle.

Story filed: 05:32 Sunday 24th February 2002

http://waysandmeans.house.gov/srm/107cong/5-3-01/record/evaa.htm

Members of Electric Vehicles of America--Hypercar not included.
http://www.theecologist.org/archive_article.html?article=148&category=84

Survey of European energy situation:

And not all fuels are created equal from a climatic point of view. If the wrong choice of fuel production for HFCs is made, it could lead to minimal emissions reductions from ‘well to wheels’. Extracting hydrogen from gasoline reformed on board an HFC-powered vehicle would reduce emissions just 22 per cent compared with an internal combustion engine, versus 35 per cent from methanol reformed on board, and 72 per cent from natural gas reformed in a large plant.(10) Achieving zero-emissions would require using hydrogen produced solely by electrolysis using a renewable energy source.

He said the federal government should purchase hybrid cars for its own fleet, and also called for tax credits for consumers who buy them. Longer term, he said Congress should set a goal of

ultimately converting America's passenger transportation to fuel cell vehicles running on hydrogen, the ultimate
green' energy resource, whose only byproduct is water.''

Gephardt proposed increasing federal research funding for fuel cell research and a tax credit for every family or business that buys fuel cell technology.

He also proposed a tax credit of up to 30 percent for business investment in renewable
Toyota Prius Makes Splash in Hollywood (6/11/02 EVWorld editorial)

Meanwhile, out in Tinsel Town – according to the Washington Post – the hottest new car to own is the Toyota Prius. Celebrities who have their choice of the biggest and best the motor world has to offer, are appearing at benefits in their Priuses. The list of celebs owning the little five passenger HEV include Cameron Diaz, Leonardo DiCaprio, Carole King, Billy Joel, David Duchovny, Bill Maher, Patricia Arquette, Jackson Browne, Rob Reiner, Ed Begley, Jr, and Arianna Huffington. Harrison Ford and Lindsey Wagner have also considered buying one.

By a Washington Post Staff Writer

Thursday, June 6, 2002; Page C01

LOS ANGELES – It was one of those glittering Hollywood fundraisers for a noble cause, the environment. Tom Hanks was hosting. Robert F. Kennedy Jr. was speaking. Former president Bill Clinton was pumping flesh.

But the real news on that evening last month was in the parking lot. Celebrity after celebrity rolled up to the valet stand in small, snub-nosed, rather dowdy little cars. Director Rob Reiner, "Seinfeld" co-creator Larry David, superagent Arie Emanuel all arrived in Hollywood's latest politically correct status symbol: the half-electric, half-gasoline hybrid car.

The Toyota Prius: 50 miles to the gallon, nearly emission-free and only about $20,000. Not too sexy, maybe, but definitely very hot.

"Five Priuses drove up in a row," says Gail Reuderman Feuer, a lawyer for the Natural Resources Defense Council, who drove her own hybrid to the fundraiser. "I said to my husband, 'I don't know if we're going to be able to find our car afterward.' They were all lined up. It was very exciting."

With gas prices rising, global warming ongoing, and resentment toward some oil-rich Arab countries and fear over Middle East violence at a peak, the latest automotive trend among L.A.'s conspicuously wealthy is conspicuous frugality.

"It's the hot car," says Feuer. "People look at the Prius like they looked at a Jaguar a few years ago."

Chalk up another one for the New Normal. Emanuel put away his Ferrari. David sold his Lexus. Reiner traded in his BMW.

They're not alone. The list of Hollywood's hybrid-come-lately car owners reads like the table of contents of People magazine: Cameron Diaz, Leonardo DiCaprio, Carole King, Billy Joel, David Duchovny and Bill Maher, to name-drop a few. Patricia Arquette bought one recently; so did rocker Jackson Browne. Larry David bought three, including one so that his character, "Larry David," could drive one on his HBO series, "Curb Your Enthusiasm."

"It works on every level," says David, who is married to a staunch environmentalist. "I'm doing something good, and my wife has sex with me more often."

Asked about his car, DiCaprio responded with an e-mail, writing, "This is the most radical mass-produced car in the world and I can't find any downside. My family and I own a total of four, and we drive them all over Los Angeles."

The Prius (pronounced PREE-us) isn't the only hybrid car on the market. Honda makes the two-seater Insight, which gets 68 miles per gallon, and just started mass-producing a hybrid Civic. But Toyota's version, with its computerized display showing fuel consumption, has captured the imagination of Hollywood buzzmakers.

Larry David first got a hybrid because his wife, Laurie, has strong views about big, gas-guzzling SUVs, which are hugely popular in Los Angeles and hugely annoying to her.

"Those cars should just have 'pig' spray-painted on them," says Laurie David, apparently not one for understatement. The Prius, she says, is the antidote. "I got involved because of global warming, but hello! It's national security now. Shouldn't we be reducing our dependence on foreign oil?"

The Davids started something of a chain reaction among their friends. "I have one because I found out they existed," says Reiner. "Larry David had one; he told me there's this hybrid car . . . I thought, 'Here's something I could actually do that would save on gas, save the environment, protect us from global warming.'"

Commentator Arianna Huffington bought one last week. "I got a little tired of hearing how we're at war, and we're being asked to do nothing about it but go shopping, go to Disneyland and the mall," she says. Huffington gave up her SUV in November, then sold her Lexus when she recently saw the Davids' hybrid.

"It is very much a little peer pressure," she says. "Positive peer pressure."

And it's a conversation piece. The day Huffington got the car, she drove it to lunch at the Bel Air mansion of Selim Zilka, a former oil baron who is now a leading proponent of wind power. Within minutes a dozen people had filed out to gawk at the little motor that could run on gas or electrical power.

"The parking lot was full of Jaguars and Bentleys," she recalls, "and my host . . . brought everyone out to the driveway to look at Arianna's car. It became this point of attraction."

Tree-hugging celebrities like Ed Begley Jr. and Woody Harrelson have long embraced experiments like the electric car, an expensive trial that GM recently abandoned (the car can't go long distances without being plugged in for a recharge). What's unusual about the hybrid is that it's easy for less dedicated activists to love; you fill it up at any gas station, about half as often as a regular car. All it requires is a willingness to be seen in a ride that looks like those driven by most Los Angeles nannies.

Huffington says she doesn't care: "I'm not a car person, really."

Reiner, a hefty guy, is not bothered either: "I don't care, I just want to get from one place to the next. To me it's just an automobile."

The principle of the hybrid is simple but ingenious. In addition to a downsized, traditional gasoline engine, the hybrid has an electric motor and a battery pack that is recharged by the gas engine while the car is on.

A computer under the hood decides whether, at any given moment, the car would run more efficiently on gas or electrical power. To save gas, the engine turns off completely when the car comes to a full stop, then restarts imperceptibly when the driver hits the accelerator; energy normally wasted in braking is stored in the batteries. Because of the electric motor, the Prius makes very little, and sometimes no, noise.

As a concept and as a car, it works, says Csaba Csere, editor in chief of Car and Driver magazine. With the hybrids, "you can have your cake and eat it too; you get the energy benefit of a small engine without the shortcoming of a lack of power, which is quite ingenious," he says.

The gas mileage, though impressive, is not quite as high as Toyota and Honda claim, says Csere, and the hybrids are a little pricey when compared with similar high-mileage, gas-only sedans like the Accord or the Focus, about $3,000 to $4,000 more. That's unlikely to change, Csere says, since the hybrids will always have a lot more going on under the hood.

For the moment, Toyota and Honda claim still to be losing money on every hybrid car they sell. "Part of the reason they make it is to get brownie points for being green," says Csere. "They're limited-production cars. Toyota barely sends 2,000 Priuses a month. Honda's goal for the Civic hybrid is 2,000 units a month."

A Toyota spokeswoman, Holly Ferris, explained: "It's a new technology for buyers. We did increase production for the United States because of the demand, and we'll continue to monitor that demand. But we're kind of meeting demand right now."

The Santa Monica Toyota dealer, which claims to sell more Priuses than any other dealership in America, has seen an upward trend in both supply and demand. Salesmen say they peddle 10 to 12 Priuses a month, but have only had the car available on the lot for a couple of months; before that, it was a special order.

"For a lot of people it's not practical, since it's a small sedan," says manager Rhett Butler (that's his real name). But celebrities? "People here care for the environment. They love them," he says, mentioning that Harrison Ford came by to test-drive one the other day, as did "Bionic Woman" Lindsay Wagner – who, by the way, is a spokeswoman for Ford.

With the fervor of the converted, celebrities driving hybrid cars argue that they don't miss their Beemers and Jags (though agent Emanuel has been seen lapsing back into his Ferrari). And they say they are anxiously awaiting the next hybrid model, an SUV by Ford, expected to start production in a year and a half.

That's way too slow for Reiner. "There's no reason why every car, every SUV, doesn't have the hybrid technology," he argues.

Says David: "When they come out with a hybrid station wagon, I'll buy it. A lot of people are just waiting for a big family car to be a hybrid. I think the market will go crazy."

Reiner agrees. "If it was made clear to people that we could win the war on terrorism by driving a hybrid car, that we could stop global warming by driving a hybrid, I think people would do it," he says. "But people haven't made those kind of connections."

That person -- and there seems to be only one -- is David Garman, the assistant secretary for energy efficiency and renewable energy in Bush's Energy Department. Garman, a clean-energy optimist who can talk tirelessly about the latest in solar, wind, geothermal, biofuel, and green building technologies, worked on various energy and environmental committees in the Senate for over two decades, and was chief of staff for Sen. Frank Murkowski (R-Alaska). He has a master's degree in environmental science from Johns Hopkins, drives a hybrid-engine Toyota Prius, and got nominated for the position largely because he had signatures from a wide range of Democratic supporters in the Senate, and hence struck the Bush administration as a safe bet for a department oft-maligned by environmentalists. But though Garman is highly regarded by most people in the alternative energy industry, and though he has an ambitious and well-informed vision of the future, he's not likely to get very far as long as he's forced to champion -- as he steadfastly did when I spoke with him -- the Bush administration's energy plan. And though he's hardly in any position to admit it, there is simply not enough White House backing to help him implement an effective action plan.

http://www.washingtonmonthly.com/features/2001/0207.mencimer.html

Gore parried by saying that he wore the attacks like a badge of honor. And then he went down for the count, losing the election to the most anti-environmental candidate since Ronald Reagan. In a bittersweet epilogue, however, Gore's environmental manifesto was finally vindicated. In April this year, with 50 mpg Japanese hybrid electric cars selling in the United States like hotcakes, and Detroit years away from producing its own, Michigan's Republican Gov. John Engler--who not so many years before had branded Gore a threat to the auto industry--announced the creation of a state-funded $700-million energy research center. Engler conceded that the center's research would eventually make the internal combustion engine obsolete.

The observable evidence of global warming on the planet has convinced the rest of the industrialized world to move forward with a sense of urgency to address the problem. British Prime Minister Tony Blair has come out as one of the world's most forceful leaders on climate change, and his country's emissions have dropped by 5 percent since 1990; Germany's emissions fell by 19 percent, even as U.S. discharges went up 18 percent during the same period. The E.U. and Japan have ratified Kyoto, and Russia is slated to do the same by the end of the year. A handful of multinational corporations, including BP, Shell, Toyota, and DuPont, have begun making voluntary reductions in their emissions, in part because they realize they otherwise won't be able to compete in a post-Kyoto world. "Most people are getting it, except the U.S. administration and U.S. Congress," says Watson.

The environment could energize key Democratic constituencies, such as the young people who flocked to Ralph Nader's campaign. Polls also suggest that the environment is a key factor in winning the votes of the ever-critical independents. Perhaps the best evidence for this is the decision by maverick Sen. John McCain to take up the issue of climate change. As chairman of the Senate Commerce Committee, McCain began holding hearings on climate change two years ago, and in February this year, he joined with Sen. Joe Lieberman (D-Ct.) in introducing legislation that would increase fuel efficiency, reduce greenhouse-gas emissions, and reduce dependence on foreign oil.

From the Senate floor, McCain said it was clear that soon there would be a world marketplace that "rewards improvements in energy efficiency, advances in energy technologies, and improvements in land-use practices and we are running the risk that America is not going to be part of it." McCain's bill has been endorsed by Senate Majority Leader Tom Daschle and most other Democratic presidential contenders.