California Is Set to Become the Capital of Fuel-Cell Cars

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While most of the country is hedging its bet on the future of motor vehicle technology, California is ready to go all-in on clean, sustainable fuel sources. Already home to Tesla (NASDAQ:TSLA), California is making a big investment, up to $400 million to date, in a new program aimed at creating innovative fuel and driving technologies. The program, dubbed “The California Energy Commission’s Alternative and Renewable Fuel and Vehicle Technology Program,” has funded more than 250 clean transportation projects and invests more than $100 million in development each year.

California is setting out to become the national leader in cleaner vehicles and cutting down on the emissions of greenhouse gasses. If you’ve ever driven through Los Angeles on a hot, muggy afternoon, the amount of smog in the air is a clear indicator as to why state officials may be putting such a priority on this, although the Clean Air Act has put a considerable dent in the amounts of pollution in metro areas across the country.

But what exactly do officials in California hope to accomplish with the renewable fuel and vehicle technology program? Well, the goals for the program are laid out rather plainly:

“Projects selected for program funding accelerate the development of alternative transportation fuels through the improvement and commercialization of existing and emerging alternative fuel vehicles and infrastructure. Recognizing there is no ‘silver bullet’ or single solution, funded projects include commercial vehicle demonstrations and deployment, vehicle manufacturing, fuel production, fuel distribution infrastructure and research of innovative technologies. Additionally, critical functions such as outreach and marketing, workforce training and studies that focus on sustainable industry practices reinforce the goals of the program.”

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Based on this description, it’s safe to say that the state is looking to cover all its bases. Already being home to Tesla, the state has an advantage to begin with. But fuel-cell vehicles are also waiting in the wings, ready to make a splash on the market.

California has evidently been keeping a close eye on the growing fuel-cell vehicle industry, and it has decided to invest $50 million in the expedited construction of hydrogen refueling stations across the state. The investment will add 13 new stations in northern California and 15 in the southern part of the state, all along major arteries.

Energy Commissioner Janea A. Scott said in a press release that the measure is a part of the state’s overall strategy to make alternative-fuel vehicles a more attractive option for consumers. “Transitioning to low- and zero-emission vehicles is critical to meeting air quality goals and to reducing the emissions that lead to climate change,” she said.

“With this funding, California will accelerate the construction of a reliable and affordable refueling infrastructure to support the commercial market launch of hydrogen fuel cell vehicles.”

A recent piece from TechCrunch reports that a company named FirstElement Fuel will be on the receiving end of a $27.2 million grant from the state to open 19 new hydrogen refueling stations, along with a loan of $7.2 million from Toyota (NYSE:TM).

Toyota, perhaps not by coincidence, looks to be going after the fuel-cell vehicle market, as it recently took the veil off of its FCV concept. Other companies, like Volkswagen (VLKAY.PK), have also been working on fuel-cell technology, which looks to provide an alternative to straight electric-powered vehicles offered by almost every vehicle maker at this point.

With hybrid, electric, and fuel-cell technology on a meteoric rise in the American auto market, California’s investment looks like it will give drivers across the state more options in considering what type of vehicle to purchase. This is better for the market overall, as well as consumers. Perhaps most importantly, California can now act as a proving ground for the next big shift in propulsion technology, as the superior innovations are more likely to stick around for the long term.

Similar to BlueRay taking on HD DVD as the standard replacement for traditional DVDs, the auto market is set for a shakeup. By putting the proper pieces in place, California looks to be the place where the future will be decided. Electric vehicles have an early jump on the market, but fuel-cell technology is ready to go mainstream. By investing in refueling stations and making fuel-cell vehicles a more attractive choice, California is giving the technology a chance to catch up.

Or, at the very least, become the capital of fuel-cell cars.

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