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California and Tesla No Longer Best Friends?

Historically, hydrogen fuel-cell cars have not made it to the mass market for two reasons:

  1. The cars have been too expensive to manufacture. The cost could have been anywhere in the six figures, or three times to 30 times an average car.
  2. There are hardly any fueling stations. As of recently, California had nine.

What is happening right now is this: California's latest environmentalist jihad is against warm weather -- the state's only remaining comparative advantage -- so California must be made colder by having people buy cars with fewer CO2 emissions. By 2025, 15.4% of cars sold in California must be "zero emissions," and of those hydrogen fuel-cell cars are the most favored by the red-tape generators.

Having forced the auto industry to spend billions of dollars to develop these hydrogen fuel-cell cars, the cost of these cars has now come to approach the point where they are ready for the mass market. The first car to hit the market will be a Hyundai Tucson, which launches in the June 2014 quarter in Los Angeles.

The price of the Hyundai will be $3,000 upfront and then $500 per month for a three-year lease. Unlimited fuel is included. The car's range is expected to be 300 miles. Refueling time is three to eight minutes.

The Hyundai will be followed around the middle of 2015 by all-new cars from Toyota (TM) and Honda (HMC). After that, perhaps by 2020 we can expect others to join, such as General Motors (GM), BMW and Mercedes.

Here is where it gets interesting: California's weather jihadists have forced companies such as Hyundai, Toyota and Honda to spend billions of dollars developing cars that no car buyers are asking for, but they are going to get a door prize in 2015 and 2016: a $200 million de facto subsidy.

What am I talking about? I'm talking about building 100 hydrogen fueling stations in California, apparently to the cost of $2 million apiece. The first phase of building 68 of them could start within a year from now, and the second phase of 32 more could start closer to two years from now.

These hydrogen pumps would be located straightforwardly at existing gasoline/diesel fueling stations. You fuel hydrogen much the same way you fuel gasoline and diesel. It makes perfect sense.

The hydrogen stations would be mostly in the large Los Angeles and San Francisco Bay areas, but with a station halfway in Coalinga, connecting the south and north of California along the I-5 freeway. Let's hope that one charging station doesn't run dry or malfunction when you need it! That would be a very bad thing.

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