So far, Tesla Motors Inc (NASDAQ:TSLA) Model S has received no major competitive threat, but the same cannot be said about the time ahead. With the success of Tesla, many investors and experts believed that the electric cars from the company will be the future of automobiles.
However, the experts and analysts failed to consider the other options that may substitute battery-powered cars, says a report from MotleyFool by John Rosevear.
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Honda and GM Working on Fuel Cells
One such option is being explored by two of the biggest automakers jointly. General Motors Company (NYSE:GM) and Honda Motor Co Ltd (NYSE:HMC) (TYO:7267) announced this week to work on developing hydrogen fuel cell cars.
As per the agreement, the automakers will work on developing hydrogen storage and fuel cell technologies by 2020, and support the drive for more hydrogen fueling stations. Earlier this year, a similar deal was struck between Ford, Daimler and Renault-Nissan.
Both General Motors Company (NYSE:GM) and Honda Motor Co Ltd (NYSE:HMC) (TYO:7267) have more than 1,200 fuel cell patents between combined along with experimental vehicle fleets. Both these automakers are way ahead in the fuel cell technology, and if they succeeded in their efforts it could prove a grave threat for Tesla Motors Inc (NASDAQ:TSLA).
Toyota, another threat to Tesla
Another big automaker, Toyota Motor Corporation (NYSE:TM) (TYO:7203) recently announced to debut a car powered with hydrogen at the Tokyo Auto Show later this year. The company claims the vehicles will be on the road by 2015.
Toyota Motor Corporation (NYSE:TM) (TYO:7203)’s vehicle looks fairly competitive as it has a range of 300 miles on one fueling, which is better than most of the electric models. The car is expected to cost around $50,000 which lands it in direct competition with Tesla Motors Inc (NASDAQ:TSLA) Model S.
Hurdles in Fuel Cell technology
Fuel cell vehicles are powered by a chemical reaction between hydrogen and oxygen resulting in water vapor and heat, so there’s no pollution. However, the lack of infrastructure in transporting and storing liquid hydrogen has prevented the automakers in pursuing the concept. Also, the technology is immensely expensive and requires massive investment.
Apart from developing the technology another big challenge for the automakers will be successfully commercializing the technology, as has been done by Tesla.
Musk not impressed with Fuel cells
However, it looks like Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk is not very impressed with the ides of Fuel cells. According to Bloomberg, Musk told in an interview “Fuel cells should be renamed ‘fool cells,’ they are so stupid.” Lithium-ion cells are more superior to fuel cells and that too when “lithium-ion cells are far from their optimum.”