Shell Throws in the Towel — Will Close All Hydrogen Fuel Stations in California

Shell Hydrogen fuel station

The days of Shell hydrogen fueling stations in California are over. There will be no more Shell-operated, light-duty hydrogen fueling stations in the Golden State and the rest of the U.S., according to a report from Insideevs.

It's Been a Rough Run For Hydrogen

Andrew Beard, the Vice President for Shell Hydrogen, wrote last week that his company would permanently close its seven light-duty hydrogen fueling stations in California. He cited “hydrogen supply complications and other external market factors” as the reasoning behind his company's decision. It's an announcement that is sudden, though not surprising given that Shell Corporation backed out of a $40 million deal to build up California's hydrogen fuel station infrastructure last year.

Hydrogen is expensive and challenging to produce. While companies like Honda and GM are eyeing success for hydrogen fuel cells in commercial equipment and vehicles, consumers have been reluctant to embrace hydrogen vehicles. Hydrogen-powered cars like the Toyota Mirai are expensive, which is why only around 20,000 hydrogen vehicles have been sold in a state with a total of 31 million registered vehicles. Last year, Toyota announced they would take a new approach to hydrogen fuel cell vehicles after the Mirai continued to post lackluster sales.

Reliability Issues

Adding to hydrogen challenges for the Golden State's consumers is that Shell's announcement slashes the number of available hydrogen fueling stations from 65 to 58. However, an overview of the state's hydrogen fueling locations shows that many cannot operate at total capacity, working under reduced hours or wholly offline. So, the number of fully and consistently operational hydrogen fuel stations is lower.

Owners of hydrogen fuel cell vehicles are in a tough spot because they need reliable information about where or when they will be able to refuel their cars. According to Insideev's report, notices like this one from an Iwatani filling station are typical: “Our primary hydrogen supplier has experienced a disruption that will impact our access to hydrogen for the Hawaiian Gardens station. We currently do not have an ETA to return to normal service levels and will provide updates as soon as we have more information. We greatly appreciate your patience for the additional downtime this will cause.”

In short, hydrogen fuel stations, like electric vehicles (EVs), have yet to find solutions for their reliability issues. Insideev's report also states that Iwatani (a Japanese gas company that is one of North America's most significant hydrogen fuel station providers) is getting tangled in a messy legal situation with their primary equipment provider, citing that they received faulty equipment from them. It's challenging for companies and consumers relying on hydrogen vehicles.

Unfortunately, these vehicles have very little resale value for the consumers who have purchased them. For example, a used first-generation Toyota Mirai or Honda Clarity will sell for around $25,000 and $15,000, well below the $50,000 to $60,000 they initially sold for.

Author: Jarret Hendrickson

Title: Writer

Expertise: Automotive Industry News, Film, Drama, and Creative Writing.