Case Analysis: The Car of the Future

Strategic Issues and Problems:
The global shortage of oil and its effect on the environment has brought substantial public attention to the renewable and alternative power sources. The technology of using alternative fuel for cars besides gasoline has been advancing rapidly over the years. In light of this, car manufacturers have introduced hybrid cars which combine two or more sources of energy as fuel. However, many argue that most of these sources, such as biodiesel, ethanol, methanol, and natural gas, have either consume other types of oil or combine with traditional gasoline or diesel. Therefore, these do not solve the root cause of oil consumption. It may even create a shortage in another resource and other negative economic impacts. For instance, ethanol is primarily made from corn and can be used by blending it with gasoline. If ethanol is widely adopted as an alternative fuel source, it raises the price for food supply while the oil problem still remains unsolved. Currently, hydrogen is one of the most abundant elements on earth, and can also be produced domestically from other energy sources, including biomass, wind, water and other waste materials. It has zero pollution, high fuel efficiency and renewability, which make hydrogen an ideal alternative energy source for consumers and automakers in the long term.

Evaluation and Analysis:
Many scientists find that hydrogen can significantly reduce global warming and other types of pollutions. Hydrogen fuel cells can be easily produced and operated by separating water into oxygen and hydrogen under electrolysis or extracting from food and animal wastes. It produces no emission other than pure water and eliminates human and animal wastes at the same time. Pure hydrogen fueled vehicles have the same concept as hybrid cars. It charges the fuel cell battery by converting hydrogen and oxygen into electricity and powers the engines. According to the report by U.S. Department of Energy, hydrogen can generate nearly 70 miles per gallon and 270 miles for only twenty dollars at the pump. Honda FCX Clarity, a hydrogen fueled car, has the approximate equivalent of 68 mpg fuel economy, which is 2 to 3 times higher than gasoline cars. It shows that hydrogen has the potential for better fuel economy than gasoline. In addition, hydrogen can be produced by using different types of energy sources, which lowers the demand for foreign oil and provide more stability in domestic production systems.

Alternatives:
The current technology for producing and distributing hydrogen is underdeveloped. This results in expensive purchase price of the vehicle and fuel, lower consumer demand, and lack of public awareness of hydrogen fuel cell technologies. In order to widely implement hydrogen fueled vehicles, one possible strategy is to decrease the cost by continuing to advance the current technology and achieve mass production. The cost is one of the major concerns for both customers and car makers, so the Federal and State government should offer tax benefits and encourage partnerships among companies who are involved in the research and development of hydrogen energy systems. Once these companies stabilize the technology, automobile manufacturers would be able to bring down production and distribution costs, and the demand for hydrogen-powered cars would rise. Nevertheless, this may require a very long time, a great amount of money and resources for R&D, and may run the risk of failure. Another strategy is to increase general awareness of hydrogen vehicles. The government should create an educational program or hold local events to promote the advantages of using hydrogen energy technologies. The disadvantages may include more costs, and time-consuming implementations to build widespread consumer acceptance.

Plan of Action:
As the issues of global warming and energy crisis get worsen, the need to invest in an alternative fuel sources has been pushed to its limes. Hydrogen, one of the most plentiful resources in the world, is the solution to the global warming, oil shortage and dependence, as well as human wastes for the future. However, there are some challenges that need to be overcome, such as cost and public acceptance. The cost is often an overriding factor in consumer buying behavior. As a result, the best strategy is to further develop hydrogen technologies and achieve mass production. As the overall cost for hydrogen fuel and vehicles drops, people will be more willing to take it into their purchasing decisions; which increase the demand for hydrogen cars and growth of its market.