GM and Honda create Michigan-based joint venture for mass production of fuel cell systems

Article by Christian A., on February 1, 2017

A definitive fruit of a 2013 master collaboration agreement between American carmaker General Motors and Japanese auto company Honda has finally been realized.

Considered as two of the leaders of in fuel cell technology among carmakers, GM and Honda inked in 2013 a long-term agreement to co-develop the next-generation fuel cell system as well as hydrogen storage technologies. The two carmakers also aimed to advance refueling infrastructure to improve the viability of fuel cell vehicles. To achieve this, GM and Honda planned to share expertise and economies of scale as well as pursue common sourcing strategies – thereby making fuel cell systems less costly to produce for the carmaker and more affordable to end consumers.

The agreement resulted in the establishment of the Fuel Cell System Manufacturing LLC (FCSM), a manufacturing joint venture – as its name obviously indicates -- that will focus on the mass production of an advanced hydrogen fuel cell system that will be employed in the upcoming products from GM and Honda. The two carmakers will invest in equal amounts a total of $85 million in the joint venture – the first in the auto industry – with an aim to commence mass production operations by the end of the decade (2020). FCSM will be based within GM’s battery pack production site located in Brownstown, Michigan.

Once FCSM becomes operational, it will employ nearly 100 people and will be led by a board of six directors – three from GM and three from Honda. The board will include a rotating chairman and a rotating president will be named from each company.

Both GM and Honda aren’t new in the fuel cell arena. Between 2002 and 2015, GM and Honda have combined patents – relating to fuel cell technology – numbering more than 2,220, as per the Clean Energy Patent Growth Index. However, between the two carmakers, Honda has been quicker to bring fuel cell technology to market. In fact, Honda introduced the hydrogen-powered FCX in 2002 and the FCX Clarity in 2008.

Honda just commenced sales of the third generation of the Clarity in the US. GM, meanwhile, launched its Project Driveway program in 2007, employing a fleet of 119 hydrogen-powered vehicles and has millions of miles of real-world driving through them. GM has also been probing the viability of fuel cells in land, sea and air applications. While its recent fuel cell technology has been applied for military mobility use, the carmaker had indicated that it would launch a fuel cell vehicle for the public by 2020.

The pursuit for fuel cell technology is prompted by several challenges currently being faced by today’s vehicles like emissions, dependency on petroleum, efficiency and range. Unlike petroleum, fuel cells could depend on renewable hydrogen derived from sources like wind and biomass – with water vapor as its only waste.

Press Release

GM and Honda to Establish Industry-First Joint Fuel Cell System Manufacturing Operation in Michigan

General Motors Co. (NYSE: GM) and Honda (NYSE: HMC) today announced establishment of the auto industry’s first manufacturing joint venture to mass produce an advanced hydrogen fuel cell system that will be used in future products from each company.

Fuel Cell System Manufacturing, LLC will operate within GM’s existing battery pack manufacturing facility site in Brownstown, Michigan, south of Detroit. Mass production of fuel cell systems is expected to begin around 2020 and create nearly 100 new jobs. The companies are making equal investments totaling $85 million in the joint venture.

Honda and GM have been working together through a master collaboration agreement announced in July 2013. It established the co-development arrangement for a next-generation fuel cell system and hydrogen storage technologies. The companies integrated their development teams and shared hydrogen fuel cell intellectual property to create a more affordable commercial solution for fuel cell and hydrogen storage systems.

“Over the past three years, engineers from Honda and GM have been working as one team with each company providing know-how from its unique expertise to create a compact and low-cost next-generation fuel cell system,” said Toshiaki Mikoshiba, chief operating officer of the North American Region for Honda Motor Co., Ltd. and president of Honda North America, Inc. “This foundation of outstanding teamwork will now take us to the stage of joint mass production of a fuel cell system that will help each company create new value for our customers in fuel cell vehicles of the future.”

The Fuel Cell System Manufacturing (FCSM) joint venture will be operated by a board of directors consisting of three executives from each company that will include a rotating chairperson. In addition, a president will be appointed to rotate between each company.

GM and Honda are acknowledged leaders in fuel cell technology with more than 2,220 patents between them, according to the Clean Energy Patent Growth Index. GM and Honda rank No. 1 and No. 3, respectively, in total fuel cell patents filed in 2002 through 2015.

“The combination of two leaders in fuel cell innovation is an exciting development in bringing fuel cells closer to the mainstream of propulsion applications,” said Mark Reuss, GM executive vice president, Global Product Development, Purchasing and Supply Chain. “The eventual deployment of this technology in passenger vehicles will create more differentiated and environmentally friendly transportation options for consumers.”

Fuel cell technology addresses many of the major challenges facing automobiles today: petroleum dependency, emissions, efficiency, range and refueling times. Fuel cell vehicles can operate on hydrogen made from renewable sources such as wind and biomass. Water vapor is the only emission from fuel cell vehicles.

In addition to advancing the performance of the fuel cell system, GM and Honda are working together to reduce the cost of development and manufacturing through economies of scale and common sourcing. The two companies also continue to work with governments and other stakeholders to further advance the refueling infrastructure that is critical for the long-term viability and consumer acceptance of fuel cell vehicles.

GM is currently demonstrating the capability of fuel cells across a range of land, sea and air applications. The company has accumulated millions of miles of real-world driving in fuel cell vehicles.

“With the next-generation fuel cell system, GM and Honda are making a dramatic step toward lower cost, higher-volume fuel cell systems. Precious metals have been reduced dramatically and a fully cross-functional team is developing advanced manufacturing processes simultaneously with advances in the design,” said Charlie Freese, GM executive director of Global Fuel Cell Business. “The result is a lower-cost system that is a fraction of the size and mass.”

Honda began delivery of its all-new Clarity Fuel Cell vehicle to U.S. customers in December 2016 following a spring 2016 launch in Japan. The Clarity Fuel Cell received the best driving range rating from the EPA of any electric vehicle without a combustion engine with a range rating of 366 miles and fuel economy rating of 68 miles per gallon of gasoline-equivalent combined.

“The expertise Honda has established that led to creation of the first-generation Clarity fuel cell system is valuable experience that we are leveraging in the joint development of the next-generation fuel cell system with GM,” said Takashi Sekiguchi, managing officer and director and chief operating officer of Automotive Operations, Honda Motor Co., Ltd. “Our collaboration is an opportunity to further utilize the strengths of each company to popularize fuel cell vehicles at the earliest possible time.”

GM and Honda collaborated in a powertrain cross-supply arrangement in 1999 under which Honda manufactured 50,000 V-6 engines for the Saturn VUE and Honda received diesel engines from GM’s Isuzu affiliate for use in Europe.

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