Tesla Motors Inc (NASDAQ:TSLA) shares fell slightly, while Plug Power Inc (NASDAQ:PLUG) plunged more than 13% on Monday. Trip Chowdhry, an analyst at Global Equities Research issued a bullish report on Tesla, and cited weaknesses in fuel cell technology. Notably, Tesla CEO Elon Musk has said that fuel-cell cars will never be mainstream in the automobile industry. But major automakers such as Honda Motor Co Ltd (ADR) (NYSE:HMC) (TYO:7267), General Motors Company (NYSE:GM), Hyundai Motor Co (KRX:005380), and Toyota Motor Corp (ADR) (NYSE:TM) (TYO:7203) are investing heavily in fuel cell technology.
Is fuel cell technology really a threat to Tesla?
General Motors Company (NYSE:GM) has joined hands with Honda Motor Co Ltd (ADR) (NYSE:HMC) (TYO:7267) to develop hydrogen fuel cell cars. The two companies have more than 1,200 fuel cell patents. Some argue that the fuel cell vehicles could pose threat to Tesla Motors Inc (NASDAQ:TSLA), which entirely focuses on electric vehicles. However, Trip Chowdhry’s report suggests that the Palo Alto-based company need not worry about hydrogen-fueled vehicles.
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Global Equities Research said Monday that big automakers are completely clueless about the green energy vehicles. For a startup, success depends on focusing on a few things and getting them right. Chowdhry said creating ecosystems is critical to Tesla Motors Inc (NASDAQ:TSLA). But why Elon Musk need not worry about hydrogen-powered cars?
Tesla has many advantages over hydrogen-powered cars
Trip Chowdhry says that fuel cell cars are a complete failure. To use hydrogen gas in cars, it has to be compressed to 5000 lbs pressure to fit in the cylinder. Compressing the hydrogen gas requires energy. A standard hydrogen cylinder to power a fuel cell car costs about $40, and has a range of 360 miles. Fuel cell cars lack in power density. So, a typical hydrogen-powered car can go from 0-60 mph in 11 seconds. In contrast, Tesla Motors Inc (NASDAQ:TSLA)’s Model S goes from 0-60 in just 5.4 seconds. These factors give Tesla a clear advantage over fuel cell cars.
Tesla Motors Inc (NASDAQ:TSLA) stock inched up 0.79% to $200.08 in pre-market trading Tuesday.