company, started by a then twenty-nine-year-old chemistry graduate named Chuanfu Wang. The company began by manufacturing nickel-cadmium batteries and then transitioned to manufacturing lithium-based batteries to compete with batteries made by Sanyo and Sony. By 2002, within just seven years of its founding, BYD had become one of the world’s top four manufacturers of rechargeable batteries for cell phones. Wang was celebrated in China as the “Battery King.” BYD had achieved this preeminence by ruthless technical intensity, beating the Japanese on costs, and, as Wang put it, by “much trial and error.” In addition, as Wang said, “In China, people of my generation put work first and life second.”25
In 2003 BYD bought a derelict state-owned auto company. By 2008 it had the best-selling sedan in China. That same year, Warren Buffett bought 10 percent of the company for $230 million; the company started selling what it said was the first mass-produced plug-in hybrid—though sales were minuscule. Two years later it introduced all-electric cars with the aim of conquering not only the Chinese market but also the global market, just as it did with its batteries. In 2011 it dispatched its F3DM plug-in hybrid to the United States to begin undergoing the regulatory process for the American market and to go on display in Omaha, Nebraska, at the annual meeting of Warren Buffett’s company, Berkshire Hathaway.26
THE HYDROGEN HIGHWAY
But the electric car is not the only zero-emissions option. From a theoretical standpoint, a fuel cell is a very attractive device. It is similar to a battery in that it extracts energy from chemicals in the form of electricity. It also has no moving parts. However, unlike a rechargeable battery, which has to be recharged with electricity that is produced somewhere else, or a single-use chemical battery, a fuel cell typically uses onboard gaseous hydrogen to generate its own electricity. It is a bit like a battery with a gas tank. Fuel cells combine hydrogen and oxygen electrochemically. As a result, the only things that hydrogen fuel cells emit are electricity and water, and, crucially, they have the potential to provide power density that can compete with liquid fuels.
Hydrogen and the fuel cell first got serious automotive attention after California’s original 1990 zero-emissions edict. Among automotive companies, Honda, Toyota, and GM have continued to be boosters of fuel-cell technology. In its early years, the George W. Bush administration promoted research for the fuel-cell auto, what it called the “freedom car.”
Fuel cells continue to face major challenges. The fuel cells themselves—the device that converts hydrogen or another chemical feedstock into electricity—are expensive and will require substantial investment and breakthroughs for commercialization. One industry estimate is that their price would have to be reduced by a factor of twenty for them to become somewhat economical.27
If the cells themselves are expensive, so is the hydrogen that is now mainly used in oil refineries and petrochemical plants to make high-quality products. Hydrogen does not exist independently in nature. It has to be manufactured from something else, which today, primarily, is natural gas, although it could also be manufactured using nuclear power. Storing and transporting hydrogen for automotive applications is also technically complex and certainly costly. As electric cars require considerable investment for the stations and infrastructure that will charge batteries, so hydrogen vehicles will require a good deal of investment in infrastructure—in this case, in hydrogen-fueling stations.
When he was governor of California, Arnold Schwarzenegger launched with much fanfare a network of hydrogen-fueling stations that he dubbed “California’s Hydrogen Highway to the Environmental Future.” But that particular highway did not get all that far. By 2010 there were fewer than two dozen stations in the entire state selling hydrogen fuel.28
Another possibility is a fuel cell powered by natural gas rather than hydrogen—so-called solid oxide fuel cells. Some think, however, that natural gas fuel cells are better suited for stationary uses, such as off-grid power generation, rather than as power sources for automobiles.
WHAT ABOUT NATURAL GAS?
A potential rival to the EV would be the NGV—otherwise known as the natural gas vehicle. This is a vehicle powered by an internal combustion engine but that uses natural gas, instead of gasoline or diesel, as fuel.
Despite the fact that natural gas often costs significantly less than gasoline on an energy basis, natural gas vehicles make up only 1 percent of the total light vehicles in the world. They are primarily taxicabs and other vehicles in Asia and Latin America. There was a spurt of NGV sales in Italy, owing to significant tax