VANCOUVER, Canada - Ballard Power Systems Inc. has convinced Daimler-Benz and Ford that it has some of the most promising fuel-cell technology in the world. Now it must convince the rest of the auto industry.
Daimler-Benz and Ford have agreed to invest more than $840 million in Ballard, which does not expect to show a profit for two more years.
Daimler-Benz became so convinced of the promise of Ballard's technology that it spent £314 million to take a 25 percent stake in Ballard last year. The two companies had been working together since 1994 on experimental fuel-cell vehicles.
In December, Ford announced that it was working on a similar agreement with Ballard. Ford plans to buy a 15 percent stake in Ballard for $207 million. The automaker also plans to invest $210 million in two related Ballard businesses. Ford will lead the development of electric drivetrains for the partnership.
Daimler-Benz will begin building prototype methanol-fueled fuel-cell passenger cars by 2002 and plans to bring a vehicle to market by 2004. Daimler-Benz Vice President Ferdinand Panik expects fuel-cell vehicle sales of 40,000 in 2004 and up to 100,000 by 2006.
Competition from Toyota
Ballard faces tough competition from Toyota, which is racing to commercialize fuel cells, said Jason Zanberg, an analyst with Pacific International Securities in Vancouver. Ballard, as an independent supplier, needed partners that could help commercialize its fuel-cell technology.
'It's hard to say who's ahead,' said Zanberg. 'Everyone's making a stab at it. But it seems that Ballard has the cheaper and more efficient fuel cell.'
A fuel cell is made of a thin plastic film sandwiched between two plates. Hydrogen fuel, which can also be obtained from sources such as natural gas or methanol, and oxygen from the air is electrochemically combined in the fuel cell to produce electricity. The only by-products of the Ballard process, the company says, are heat and water vapor.
Even though it is allied with Daimler-Benz and Ford, Ballard is eager to get other automakers - including Toyota - to adopt its technology for future production vehicles, said Neil Otto, president of Ballard Automotive.
'We're trying to turn all of the automakers into customers,' he said.
Ballard, having developed a workable fuel-cell design, now has to improve the efficiency of drivetrain and related fuel-cell components and reduce the cost of manufacturing them. That is where partners Daimler-Benz and Ford can speed things up, Otto said.
'We're convinced that this will be cheaper than an internal-combustion engine,' Otto said. 'I believe that with all my heart.'