Markethaus Musings

In 2004, BMW demonstrated its version of a clean, sustainable energy future with its hydrogen powered vehicle. Now it has announced that it will build and lease the BMW Hydrogen 7, the first hydrogen driven luxury performance car.

BMW has done extensive research in Hydrogen and has cleverly taken advantage of its ICE (internal combustion engine) technology so a new powertrain is not necessary (unlike hybrids and electrics). Some great side benefits of hydrogen:

• Much lower emissions, basically water vapor
  
• Infinite supply (H2O)!
• Good performance...albeit not as good as the gasoline powered ICE, it still has 260 HP in Hydrogen mode (the BMW 760 is a 12 cylinder)
• Great mobility with 400 miles range...unlike pure electrics who are limited to 100 miles with advanced batteries

Of course this technology is still very, very expensive but in volume...manufacturers will be able to drive the cost down. Very exciting stuff for those of us who worry about the environment and the safety of our energy supply.

The major challenges are the investment to drive down cost of this technology and switching our fuel supply infrastructure to hydrogen. Don't underestimate the time and cost to create the infrastructure. It's taken us 100 years to build infrastructure for oil (exploration, pumping, delivery, refineries, retail gas stations, etc.) and switching will not happen in a few years. Still...I believe that hydrogen is much closer to the ideal future than hybrids and electrics.

Oh yes...for those of you linguistically challenged, Wasserstoff = Hydrogen in German (see sign at fuel station)

My initial reaction to Alan Mulally's hiring as Ford's new CEO was surprise, then fear...then serenity. Ohhhmmmm...

I lived in Seattle so I remember him from Boeing...and Boeing has had its share of major market swings and contretemps. Two CEO resignations in a short span, the silly move of its HQ from Seattle to Chicago (so...they wouldn't have to "fly" so much?) and a nasty Air Force contract scandal leading to a jailterm for the Boeing CFO.

Although I initially felt Alan Mulally lacked the auto experience necessary to be immediately successful he does have the engineering, manufacturing and union background necessary to successfully manage an international company. It's always difficult to assess whether the upswing in Boeing's commercial aircraft division was due to him...or another series of factors (i.e. a rising tide lifting all boats, product that was put in place before his arrival, etc.)

He gets universal praise for his performance so there is strong hope that he can translate success and passion for building the best aircraft to the car business. Those watching the car business will immediately recognize that outsiders have rarely been successful in Detroit. More recently, whiz kids from packaged goods, consumer electronics and banking have found that success in pampers, banking or contact lenses do not a car marketer make. Something about the inherent value in a disposable good that lasts a week or a few months, vs. the second largest expense a household is likely to undertake in their lifetime. Plus...who spends 6 months shopping for dog food, frozen snacks or their next bank?

At least he understands the long term product development project has to fit the market...or you have the predicament of Ford today. Products that miss the market need. Everyone in Southeast Michigan feels that pain. Let's hope this idea flies.