Tesla Motors Inc (TSLA) Electric Cars Face Off With Hydrogen Cars

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Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk has placed all of his eggs into the electric vehicle category, saying that hydrogen-powered vehicles will never be mainstream in the auto industry. However, major automakers like Toyota Motor Corp (ADR) (NYSE:TM) (TYO:7203) have chosen instead to invest in hydrogen. Hyundai Motor Co (KRX:005380) and Honda Motor Co Ltd (ADR) (NYSE:HMC) (TYO:7267) have also invested in research and development on hydrogen technology.

So which of the two technologies will most cars run on in the future? It’s hard to say right now, of course. Writing on Business Insider, Leo Sun of The Motley Fool highlights three big problems Tesla Motors Inc (NASDAQ:TSLA), Toyota Motor Corp (ADR) (NYSE:TM) (TYO:7203) and other automakers interested in advancing the auto industry are struggling with right now.

Tesla strives to make EVs affordable

Of course one of the biggest problems all automakers have faced is trying to make green cars affordable for the average car buyer. Tesla Motors Inc (NASDAQ:TSLA) decided to start with the high-end buyer before moving on to create a car which is more affordable for more buyers. Currently buyers of Tesla vehicles can receive tax credits of up to $7,500, although President Obama has suggested raising that to $10,000.

Hydrogen cars, on the other hand will start out even more expensive than Tesla Motors Inc (NASDAQ:TSLA)’s $85,000 Model S. Toyota Motor Corp (ADR) (NYSE:TM) (TYO:7203) believes its FCV-R, its first hydrogen-powered vehicle, to be priced just under $100,000 and launch in 2015. Even though that price is so much higher though, it still is a discount from earlier prototypes. However, hydrogen-powered cars are only eligible for tax credits of up to $4,000 currently. That amount could be increased to the same as electric cars or even more, however, as hydrogen vehicles start to hit the market.

Tackling infrastructure problems

Tesla Motors Inc (NASDAQ:TSLA) has been moving rapidly to reduce range anxiety by building its Supercharger stations. Of course Tesla’s Supercharger does use a different connector than other EVs, making the automaker’s charging stations effectively useless to drivers of other brands of electric vehicles.

But according to Sun, there are about 121,000 gas stations in America. Electric charging stations have surpassed 22,000, largely because they are fairly easy to build and install. Each charging station for electric vehicles costs between $100,000 and $250,000 on average.

Hydrogen-powered cars have a bigger problem in this respect though, as there are just 55 fueling station in the U.S., with most of them being in the southern part of California. Each of these stations costs about $2 million to build, meaning the spread of these stations is likely to be much slower, especially since Tesla Motors Inc (NASDAQ:TSLA) is focusing its efforts on building stations for its own electric cars rather than hydrogen.

Crunching the numbers for fueling costs

Sun notes that while electric vehicles currently have a lead in infrastructure growth, they are lagging behind in fueling costs, at least for those who don’t drive Tesla Motors Inc (NASDAQ:TSLA)’s cars because the automaker doesn’t charge to use its Supercharger stations. Currently drivers of electric vehicles must pay monthly subscriptions to use services like eVgo, although paying for a charging service may not be necessary for those who only need to charge their cars at home.

Sun estimates that the average car which gets 25 miles to the gallon of gasoline costs about $2.92 per 20 miles, $5.84 per 40 miles and $8.76 per 60 miles. He says Toyota Motor Corp (ADR) (NYSE:TM) (TYO:7203)’s Prius hybrid vehicle, which gets about 51 miles to the gallon, costs about $1.43 per 20 miles, $2.86 per 40 miles and $4.29 per 60 miles. However, Honda Motor Co Ltd (ADR) (NYSE:HMC) (TYO:7267)’s FCX Clarity, which gets the equivalent of 67 miles per kilogram of hydrogen, costs 54 cents to drive for 20 miles, $1.07 for 40 miles and $1.61 for 60 miles.

In addition, hydrogen-powered vehicles can be filled back up in just three minutes. Tesla Motors Inc (NASDAQ:TSLA)’s cars charge more quickly than other electric vehicles, but they still take time to charge. Drivers could opt to do the battery swap instead, but the trade-off is a much higher cost.

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