Ballard Power Systems
Slides for Cost Reduction
Learning Curves
Learning Curves
1 2. 0
Cost are reduced with
each new generation of
technology
1 .00
Mark 3
Unit Cost
0.8 0
Mark 5
0.6 0
Mark 7
0.4 0
Mark 9
0.2 0
Next Generation
0.00
0
0
Cumulative Output
June 5, 2003
2
Manufacturing Progress – Catalyst Application
2.2
70
Cycle Time
60
Loading
2
1.8
Minutes
1.4
40
1.2
1
30
0.8
20
Catalyst Loading
1.6
50
0.6
0.4
10
0.2
0
0
Hand Application
Discrete Screen Printing
June 5, 2003
Rotary Screen Printing
3
Manufacturing Progress – Flow-Field Plates
3.5
80
Cycle Time
Plate Thickness
70
3
60
Minutes
50
2
40
1.5
30
Plate Thickness
2.5
1
20
0.5
10
0
0
Plate Milling
Embossing
June 5, 2003
Improved Embossing
4
Manufacturing Progress - Sealing
70
15
Cycle Time
60
Part Count
14
13
12
11
50
9
40
8
7
30
6
Quantity
Minutes
10
5
20
4
3
10
2
1
0
0
Glued Seals(Mk7)
Manual LIM (Mk9)
June 5, 2003
Automatic LIM (Mk9)
5
Questions & Answers
Cost Reduction
„Describe
what is currently known about the cost of this technology.
„We
have a detailed understanding of the cost of a fuel cell. DaimlerChrysler has been working with
Ballard since 1994 and we have completed numerous generations of the technology. Ballard has
been working on all aspects of the fuel cell including the membrane, electrodes, catalysts, bipolar
plates and associated systems and has made significant progress in each area. By working on each
of these areas, Ballard has been able to develop the fundamental understanding of how a fuel cell
works and how changes in each of these components and systems affect not only the performance of
the fuel cell but the costs as well.
„In
1997, Ballard and DaimlerChrysler embarked on a 2-year manufacturing study to determine how
fuel cells will be made and what the cost would be at high volume. The study concluded that at
volumes of 300,000 automotive equivalents or greater per year, that Ballard would be able to
manufacture the automotive fuel cell at US$20/kW. This is consistent with the DOE targets of
US$50/kW for the entire automotive fuel cell system.
„Today
we are not manufacturing at high volume, so the costs of the automotive fuel cell system are
significantly higher and not representative of a product at high volume. As a result, we do not
provide the cost or price of these systems today.
„While
the automotive fuel cell is still in low volumes and are just starting to appear in small fleet
applications, fuel cells are being sold commercially today by Ballard in the portable power market.
Ballard introduced its NexaTM power module in September 2001 and is now selling to over 50
customers worldwide. Ballard’s customers are integrating the NexaTM power module into their
product. Coleman Powermate was the first company to launch a product using Ballard’s Nexa power
module and is selling its AirGenTM fuel cell generator for US$5995 to industrial customers. This
generator is a 1kW fuel cell generator. While Ballard has never given a price for its Nexa power
module, it must be priced well below the AirGen price. In addition, Ballard has a goal for 2003 to
reduce the cost of its Nexa power module by 50% this year.
June 5, 2003
6
Questions & Answers
Cost Reduction
„
„
„
Describe how cost has fallen over time and as a function of accumulated output.
As described above, fuel cell costs are coming down, however, it is premature to describe how
costs are falling as a function of accumulated output. Today, fuel cell cost reduction is being
done in a stepwise fashion, not an accumulated manufacturing learning curve. We are moving
down a family of learning curves with each successive generation of technology.
[Please see the first slide in the presentation entitled “Learning Curves” for details on the
above and then use the three remaining slides to talk about how the costs have fallen over
time and to address the next question about factors that have caused costs to fall.]
June 5, 2003
7
Questions & Answers
Cost Reduction
„
„
„
Identify the factors that have caused cost to fall in the past and what factors may
operate to cause cost to fall in the future. Note where possible how actual declines
in cost compare to forecasts.
As described above, fuel cell costs have been coming down through successive generation of
the technology. We are using different materials of construction, more efficient means of
applying catalysts and developing simpler systems. We do not provide forecasts of our cost
reduction efforts beyond what is stated in our public annual report goals.
In the future, the increase in volume will be key in driving costs down. In addition the
development of a mature supply chain will aid in lower costs.
June 5, 2003
8
Questions & Answers
Cost Reduction
„
„
Identify any obvious barriers to the adoption and diffusion of this technology other
than cost.
There are several barriers to the adoption of fuel cell technology in the transportation market
including lifetime, durability and the widespread availability of hydrogen. DaimlerChrysler and
Ballard are continuing to improve the fuel cell technology and are on a path to provide noncompromise vehicles for mass commercialization by around 2010. Many other companies,
universities and research institutions are addressing the issues around hydrogen. This includes
producing, distributing and storing it in a cost effective and safe manner.
June 5, 2003
9
Questions & Answers
Cost Reduction
„
„
Describe public policies that would most effectively lower the barriers (if any) and
lower cost in the future.
Programs similar to what President Bush announced during his State of the Union address are
the type of programs the fuel cell industry needs to accelerate the adoption fuel cells. This
includes funding for the development of the hydrogen infrastructure, incentives for early
purchasers of fuel cells and governments being early fleet customers. In addition,
governments can help in the adoption of the technology by creating legislation that is
supportive to fuel cells and other renewable or clean power generation technology. Finally,
another role government can play is to foster the development of more public-private
partnerships like the California Fuel Cell Partnership that can help in setting codes and
standards, identifying future barriers, providing public outreach and education, help develop
the hydrogen infrastructure and be a participant in various field trial demonstrations.
June 5, 2003
10
Questions & Answers
Cost Reduction
„
„
Describe the likely benefits (either qualitatively or quantitatively) that would be
derived from the policy and the costs of the policy if known
It is difficult to provide the benefits or the costs of these policy initiatives without knowing the
specifics. As an example, if the government would be an early purchaser of fuel cell vehicles,
the benefit would be an increased volume of fuel cells helping lower costs and increase the
manufacturing know-how. This also helps the industry move closer to the mass
commercialization of the technology. The cost of the program would be the lease costs of the
fuel cell vehicles, which would be significantly higher than traditional vehicles today. Without
knowing the number of vehicles and the timing of the purchase or lease it is difficult for me to
estimate the actual benefits or costs.
June 5, 2003
11