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A 12 months in the past, whereas assessing numerous organizations that had reached the terminus of the Odyssey of the Hydrogen Fleet six act tragicomedy, I identified the terrible, horrible, very unhealthy, no-good resolution the Austrian department of IKEA had made to purchase Quantron hydrogen step van supply vans. Since then, I’ve been giving strategic steerage out freely — and seemingly handled as value each penny — to transportation automobile producers like New Flyer to ditch their hydrogen strains and focus solely on battery electrical.
The explanations are easy. Each hydrogen automobile a agency sells possible causes them to not promote three battery electrical automobiles. That’s as a result of hydrogen shopping for companies inevitably find yourself actually sad with them. The hydrogen could be very costly and remaining that method. The hydrogen is high-carbon emissions and isn’t altering. The hydrogen refueling stations don’t work reliably in any respect, out of service much more hours than they’re pumping the fuel. The automobiles themselves value about 50% extra to take care of than battery electrical ones.
Sad clients are clients who will choose a distinct agency to purchase from subsequent time.
Additional, making an attempt to do advanced and costly hydrogen automobiles and battery electrical makes the producer lose concentrate on making the most effective battery electrical automobiles potential. They cut up capital and useful resource investments over the loser — hydrogen — and the winner — battery electrical — as a substitute of simply spending it on the one. Hydrogen buses value much more to fabricate and repair than battery electrical and all the time will, as a result of battery electrical are a lot easier. That implies that any agency promoting hydrogen buses could have much more folks dedicated to them than battery electrical as a ratio of automobiles delivered. A agency that has hydrogen automobiles in its secure could have dearer battery electrical automobiles in consequence, because the battery division will likely be consuming a number of the hydrogen overhead.
It additionally implies that they’re promoting inferior electrical automobiles into markets the place Chinese language companies are very aggressive, even with tariffs. For bus manufacturing companies like New Flyer in North America and Solaris in Europe, they need to be ceding the lifeless finish hydrogen market to rivals who need to go stomach up as an intentional technique, in order that they’ll maintain market share away from BYD and Yutong, who’re actively promoting. BYD is choosing up orders for a whole lot of electrical buses at a time in North America, and the 2 companies between them delivered extra battery electrical buses than Solaris’ total supply quantity for 2023.
And, after all, their gross sales folks will take a look at the larger sticker value per unit for hydrogen automobiles and be incentivized to promote extra of them as a substitute of low cost battery electrical automobiles. That is one other strategic blunder and can trigger a lack of extra battery electrical gross sales. They are going to be proposing as many hydrogen automobiles as potential in each tender with the hope of larger bonuses, as a substitute of maximizing battery electrical automobile gross sales.
The results of that is that any transportation producer promoting hydrogen buses immediately will lose market share yearly to BYD, Yutong, different Chinese language pure performs and companies which do joint ventures with Chinese language companies to place a Western shell and model on a Chinese language battery electrical drivetrain. It’s extremely quick sighted and unhealthy technique.
Producers with hydrogen and battery electrical choices are deliberately creating the situations for their very own decline in market share and even chapter.
And so, to Quantron. Once I wrote about IKEA’s terribly unhealthy option to pursue silly Austrian governmental subsidies for hydrogen refueling and supply vans, Quantron’s electrical equivalents solely had 200 kilometer ranges. That’s for the standard step van. IKEA had purchased a bunch of those inferior step vans from Quantron, and so they weren’t ample for the minority of longer vary deliveries.
As a substitute of taking a look at distributors who had been delivering larger high quality electrical vans, IKEA saved shopping for from Quantron, selecting the hydrogen model of their step van, with a 400 kilometer vary. In the meantime Mercedes eSprinter is out there for €60,000 and has a 400 km vary.
What was IKEA paying for Quantron hydrogen vans? Nearly 1,000,000 euros per van, as a result of they had been additionally shopping for hydrogen refueling functionality. It made completely zero sense, however these Quantron gross sales folks had been extremely motivated to promote as a result of they might get greater bonuses. Even shopping for Quantron battery electrical step vans made no sense as Mercedes’ product was about €8,000 euros cheaper, so the native IKEA govt clearly was not significantly good at procurement.
All of that is taking part in out precisely as anticipated. Quantron filed for chapter on October thirtieth, 2024. Which means the 90 staff of the agency — word the small quantity making an attempt to assist each the a lot easier battery electrical drive prepare and the way more advanced hydrogen one — are out of labor, and sure the 350 within the Quantron ecosystem are at risk of dropping their jobs except their companies can discover them extra gainful employment on one thing that truly is smart.
What does this imply for IKEA? Nicely, the 5 Quantron gas cell automobiles they acquired final 12 months are stranded now, with none group to service them or purchase elements from. The 40 further hydrogen vans that they had on order from Quantron have dissolved right into a puff of water vapor, so their plan for fleet decarbonization, irrespective of how boneheaded, is upended as properly. And the 56 battery electrical vans with 200 km ranges which they purchased from Quantron are stranded too, so their total supply fleet is now a upkeep nightmare with no residual resale worth. At the least the electrical vans are straightforward to take care of and pretty dependable.
I’m positive the producers who make hydrogen step vans in Europe — Stellantis, Hyvia and VDL — will likely be lining as much as attempt to take the IKEA hydrogen gas cell step van orders for themselves, as a substitute of taking a look at Quantron and realizing that it’s an abject lesson in why their methods are damaged.
What ought to IKEA Austria do? It ought to rethink its technique. It ought to acknowledge that battery electrical step vans are fully match for goal, so long as they don’t prohibit themselves to producers with inferior ones. They need to write off the 5 hydrogen vans they’ve in addition to the hydrogen refueling station.
They need to recast their fleet decarbonization technique as fully battery electrical, and begin ordering battery electrical step vans from Mercedes or BYD. They need to run their Quantron battery electrical vans till they fall over after which discover second lives for his or her batteries and scrap the remainder. They might want to do an entire depreciation of all of their battery electrical and hydrogen fleet this 12 months, after all.
They need to in all probability rethink the employment of whoever made and offered the terrible, horrible, very unhealthy, no-good resolution to purchase all the pieces from Quantron after which make it worse by shopping for hydrogen vans as properly. They clearly have very restricted analytical or strategic abilities, coupled with too good gross sales abilities. That’s a harmful mixture.
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