{"id":8352,"date":"2016-11-03T14:37:46","date_gmt":"2016-11-03T18:37:46","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/bmws-hydrogen-fueled-future\/"},"modified":"2016-11-03T23:35:08","modified_gmt":"2016-11-04T03:35:08","slug":"bmws-hydrogen-fueled-future","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/bmws-hydrogen-fueled-future\/","title":{"rendered":"BMW\u2019s Hydrogen Fueled Future"},"content":{"rendered":"

The Automobile Industry<\/strong><\/p>\n

Given the undeniable evidence of global warming, transportation\u2019s large contribution to the global CO2 emissions makes the industry a prime target for government regulations but also one with opportunities to innovate and capture value.<\/p>\n

Transportation\u2019s energy source has historically been largely petroleum with little dependencies on renewal energy. However, we have seen in recent years the push towards more sustainable means due to governmental, competitive, and public relations pressures.<\/p>\n

\"Share<\/a>
Exhibit 1: Share of energy use by sector, fuel, and mode<\/figcaption><\/figure>\n

BMW, one of the world\u2019s foremost luxury automobile manufacturer, faces a particularly daunting challenge to shift towards renewal energy as its primary markets (the EU and US) has aggressive emissions targets mandated by their respective governments. In addition, it also faces Tesla, a luxury electric car manufacturer, who entered the already competitive luxury automobile market.<\/p>\n

\"Exhibit<\/a>
Exhibit 2: Global emissions targets by major countries<\/figcaption><\/figure>\n

Apparent in the most recent COP21 conference, the pressure to shift towards sustainable energy sources is further mounting. This lead to the European Automobile Manufacturer\u2019s Association (ACEA), the main lobbying and standards group of the automobile industry that BMW of is a member of, to establish a framework on how they envision addressing the challenges of climate change. [1]<\/p>\n

 <\/p>\n

BMW\u2019s Vision and Approach<\/strong><\/p>\n

For over 10 years, BMW has been investing in the development of automobiles that can use alternative energy sources. More specifically, BMW\u2019s vision of the ultimate solution for sustainability is through hydrogen cell fueled cars. [2] This idea, along with the vision of more broadly designing cars that are highly fuel efficient is what the BMW CleanEnergy initiative comprises.<\/p>\n

In 2006, BMW unveiled the Hydrogen 7, the company\u2019s first foray into production-ready hydrogen cell fueled cars. While it was an engineering feat at the time, there were limitations to this model. The car had a slower high speed than its petroleum consume counterpart (the BMW 7 Series), weighed more, and had a base price tag of over $100,000 USD. Most importantly, the car was actually less fuel efficient in its consumption of hydrogen compared to petroleum (normalized on volume consumed vs. distance traveled) not to mention the need for an infrastructure to deliver hydrogen to customers. [3]<\/p>\n

Recognizing the large gap between where the technology and infrastructure currently is and where it needs to be, BMW decided that it needed to buy time while still working towards minimizing emissions and ultimately having a sustainable product.<\/p>\n

To do so, they focused on two shorter-term goals:<\/p>\n

    \n
  1. Optimize existing technologies<\/li>\n
  2. Debut BMW\u2019s own electric cars<\/li>\n<\/ol>\n

    Optimizing existing technologies:<\/strong> This meant making their existing gas guzzling luxury sports cars run more efficiently without sacrificing performance. This came in several forms [4]:<\/p>\n