FCX Clarity: A Beauty Inside and Out
Yesterday Honda Motors celebrated the start of production of its FCX Clarity, the world’s first hydrogen-powered-fuel-cell vehicle intended for mass production. That’s a mouthful, but the car represents a major breakthrough in alternative energy automobiles. Honda only plans to make 200 of the FCX Clarity’s in the next three years but plans to increase production volumes in the future. The first five customers include actress Jamie Lee Curtis and a film producer in LA. The Clarity can drive 280 miles on a tank (almost as far as a gasoline car) and gets higher fuel efficiency than a gasoline car or even a hybrid- around 74 miles per gallon according to Honda.
No doubt the Clarity, and hydrogen-powered-fuel-cell vehicles still face several hurdles. The cars cost several thousand dollars to produce, but Honda predicts this will drop to less than $100,000 in under a decade since it has found ways to mass produce the car and take advantage of economies of scale. For now the company is subsidizing its customers who can lease the car for only $600 a month, which is not much more than leasing one of Honda’s top line Acura line luxury cars. The other major problem is infrastructure: very few states have built many hydrogen filling stations, though California is currently leading the way and setting an example for the rest of the states.
For now, the initial customers seem to be drawn mostly to the car’s novelty more than anything else. I can relate as my family bought me a Prius in its early stages back in 2004. Of course I loved the wonderfully quiet engine, the decreased gas costs, the ‘Park’ button, and the fact that I never had to take my key out of my purse, but most exciting was the look on people’s faces when I drove around and the awe of my friends. At the time experts predicted it would take 8-9 years to make up the premium we paid on the hybrid… now that number has dropped to approximately 3.
And that’s the thing that’s most interesting. Of course everyone is praising Honda and Toyota now that fears of major climate change, $140/barrel oil, and depleting fossil fuel resources are becoming the reality, but in the past two decades both companies have been criticized publically several times for pouring money into “unproven” technologies while refusing to follow the rest of the industry into large sport utility vehicles and pickup trucks. Well “unproven” is what innovation is all about! Now Honda is in an enviable position – Toyota too- while other companies try to deal with large inventories of gas-guzzling trucks and massive cars that requite large incentives to sell.
Just another example of how important it is to continue to invest in radical innovation (not just incremental) even while “things are good”. And as Jeff Bezos, the chief at Amazon, has always maintained, competitor-focused companies risk complacency when they become industry leaders- but customer-focused companies must always keep improving. Other CEOs and other companies, whether in the online retail industry, the automobile industry, or in ones completely unrelated, should learn a thing or two from these guys.
