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The future for cars: hybrid, battery or fuel cell?


6th May 2016

Buying a car is a tricky business. With so many flavours to chose from, (if you are like me) the process is likely to involve hours of painstaking research and analysis before a decision can be made. Then changed. Then remade. Happily, deciding how that car might run has always been fairly painless. Petrol, or diesel. Simple. The internal combustion engine is king.
But for how long?

Under pressure to reduce emissions, manufacturers have been looking beyond the conventional internal combustion engine to find cleaner, alternative forms of power. This has lead to a marked increase in the number of hybrid electric vehicles (HEVs), battery electric vehicles (BEVs) and fuel cell vehicles (FCVs) on our roads. Taking the US as an example, the increase in the number of such alternative cars sold each year can be seen in the below chart:

uscarsales

Source: Bureau of Transportation Statistics, U.S. Department of Transportation

Sales of HEVs have increased significantly since the turn of the century; rising from just 9,350 in 2000 to 427,547 in 2015. Despite the slight drop since 2013, sales in 2015 still represented 2.5% of the entire US car market for 2015. Not a huge percentage, but not bad given the start point of just 17 reported US sales during the entire 20th century.

Helped by the likes of the Nissan Leaf, Chevy Volt, and Tesla Model S, sales of BEVs are also climbing, but are still far behind those for hybrid cars. As for fuel cell cars, see the thin green line along the bottom right of the graph? That’s FCV sales. All 72 of them. In fairness to FCVs, the Toyota Mirai, which was the first publicly available FCV, was only launched in the US in October last year, and only in California. So it’s hardly surprising that the sales so far are so low.

All in all some positive signs, although alternative cars are currently a long way from mounting a meaningful challenge.

But what for the future? If the days of petrol and diesel are numbered, which of the alternative technologies will prevail?

Tough question.

The success of alternative cars will depend on a huge number of factors, one of which is investment in R&D activity. And with R&D, usually, come patents. So what do the patent grant statistics tell us?

altcarpatents

Source: TotalPatent®, Lexis Nexis

Well, they tell a similar story to the US sales figures: HEV patent grants are up significantly since 2000, BEV patent grants have increased steadily since 2010, and FCV patent grants are a distant third. This suggests that R&D investment in BEVs and HEVs has continued apace, while developments in FCVs have remained static.

What is perhaps less clear from the above graph is that the patent grant statistics seem to lead the sales figures by a year or two.

In the case of HEVs, the number of patents granted in 2000 was already up by nearly 100% from the number granted in 1998. For BEVs, the number granted in 2010 was up 50% from the number of patents granted in 2007. This suggests that an increase in car sales for a given technology might be forecast from an increase in the number of patents granted. Given the relative infancy of these technologies and the timescales for car development and patent prosecution, such a correlation makes sense.

From the growth in BEV patent grants, a significant increase in the sales of BEVs seems to be on the cards in the next few years.

So, does this mean victory for the battery and curtains for the fuel cell? Not necessarily. The race to reduce emissions is not a zero-sum game. This is not VHS vs Betamax. Or Highlander. There can be more than one.

Ultimately, hybrid technology is likely to be a stepping stone to the future, rather than the future itself. As for BEVs and FCVs, the two technologies should be able to co-exist, comfortably. In fact, several OEMs, Daimler included, are developing both BEV and FCV technology simultaneously. So, despite the slow start, FCV technology should not be written off just yet. With Toyota, Honda and Hyundai all betting big on the technology and planning FCV launches this year, we could be at a turning point. For those of us who would like to see a reduction in our dependence on fossil fuels, or for those simply keen on greater product variety, the hope is that both BEV and FCV technology press on from here. In a big way.

For now, the internal combustion engine still reigns supreme. But the revolutionaries are getting organised and the crowd is growing. In all likelihood we are still decades away from the end of the dominance of petrol and diesel engines. In the meantime, we can keep an eye on the patent grant statistics for any changes. When they move, the rest may follow.

This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.

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