Introduction
Hydrogen has long been heralded as a silver bullet for decarbonizing heavy industry and transportation, promising a clean energy future with zero-emission fuel cells. Yet, for companies like Cummins and Alstom, the pursuit of hydrogen technology has turned into a cautionary tale of overambition and market miscalculation. While both companies have stumbled in their hydrogen endeavors, their failures differ in scope and strategy, offering critical lessons for the broader alternative energy and electric vehicle (EV) sectors. As reported initially by CleanTechnica, Cummins spread its bets too thin across multiple hydrogen pathways, while Alstom doubled down on a niche application with limited demand. This article dives deeper into their missteps, unpacking the technical challenges, market dynamics, and broader implications for the energy transition.
Background: The Hydrogen Hype and Hard Realities
Hydrogen’s appeal lies in its potential as a versatile, clean energy carrier. When used in fuel cells, it produces only water as a byproduct, making it an attractive option for sectors like heavy-duty trucking, rail, and industrial processes where battery-electric solutions face limitations due to weight and range constraints. Governments worldwide have poured billions into hydrogen incentives, with the European Union alone targeting 40 gigawatts of electrolyzer capacity by 2030, according to a report by the European Commission. In the U.S., the Inflation Reduction Act offers tax credits of up to $3 per kilogram for green hydrogen production, as noted by the U.S. Department of Energy.
However, the hydrogen economy faces significant hurdles. Producing green hydrogen—made via electrolysis using renewable energy—is energy-intensive and expensive, often costing $3-6 per kilogram compared to $1-2 for gray hydrogen derived from natural gas, per data from Bloomberg. Infrastructure for storage and distribution remains underdeveloped, and demand for hydrogen in energy applications has grown slower than anticipated. These systemic challenges set the stage for the struggles of companies like Cummins and Alstom.
Cummins: A Broad Bet Gone Awry
Cummins, a global leader in diesel engines and power systems, pivoted aggressively into hydrogen as part of its sustainability strategy. The company invested across a wide spectrum of hydrogen technologies, including fuel cells for heavy-duty trucks, electrolyzers for hydrogen production, and even hydrogen internal combustion engines. According to CleanTechnica, Cummins spread its capital and management focus too thin, diluting its ability to execute effectively in any single area. By 2023, the company had to scale back its hydrogen ambitions, taking a financial hit as demand for hydrogen-powered solutions lagged behind projections.
One key misstep was underestimating the cost and complexity of scaling fuel cell technology for commercial vehicles. Fuel cell systems require expensive materials like platinum for catalysts, and the durability of these systems under heavy-duty conditions remains a challenge, with stack lifetimes often falling short of the 20,000-30,000 hours needed for trucking applications, as detailed in a study by the National Renewable Energy Laboratory (NREL). Additionally, Cummins faced a market reality where battery-electric trucks gained traction faster than expected, with companies like Tesla and Nikola offering competitive alternatives at lower operational costs in many use cases.
The Battery Wire’s take: Cummins’ scattershot approach reflects a classic error in emerging tech—trying to hedge bets by covering all bases rather than focusing on a defensible niche. This lack of focus likely cost the company not just capital but also credibility in the zero-emission space.
Alstom: A Niche Gamble That Didn’t Pay Off
Alstom, a French multinational specializing in rail transport, took a more focused but equally ill-fated approach to hydrogen. The company invested heavily in hydrogen-powered trains, launching its Coradia iLint model in 2018 as the world’s first hydrogen fuel cell passenger train. While the technology worked—completing successful trials in Germany with a range of 1,000 kilometers per refueling, as reported by Railway Technology—the market response was tepid. According to CleanTechnica, Alstom overestimated demand for hydrogen trains in regions where electrification of rail lines was a cheaper and more practical solution.
The economics simply didn’t add up. Hydrogen trains require costly refueling infrastructure, with each station costing upwards of $2 million to build, compared to the relatively lower cost of extending overhead catenary systems for electric trains, as noted in an analysis by International Railway Journal. Moreover, hydrogen’s energy density advantage is less relevant for rail, where fixed routes allow for easier electrification. Alstom’s bet on a niche application ignored the broader trend toward direct electrification, leaving the company with limited orders and stranded investments.
Technical Challenges: Why Hydrogen Struggles to Scale
Beyond strategic missteps, both Cummins and Alstom underestimated the technical barriers to hydrogen adoption. First, the efficiency of hydrogen as an energy carrier is inherently lower than direct electrification. Converting electricity to hydrogen via electrolysis, then back to electricity in a fuel cell, results in round-trip efficiencies of just 25-30%, compared to 70-90% for battery storage systems, per data from the NREL. This inefficiency makes hydrogen less competitive unless renewable energy costs drop dramatically or specific use cases (like long-haul transport) become dominant.
Second, safety and logistics pose ongoing challenges. Hydrogen’s low density requires high-pressure storage (up to 700 bar for fuel cell vehicles), increasing system complexity and cost. Leaks are a concern due to hydrogen’s flammability, necessitating rigorous safety protocols that drive up operational expenses. These technical realities, combined with slow infrastructure buildout, create a chicken-and-egg problem: without demand, there’s little incentive to build infrastructure, and without infrastructure, demand struggles to materialize.
Industry Implications: A Wake-Up Call for Hydrogen Hype
The missteps of Cummins and Alstom are emblematic of a broader over-optimism in the hydrogen sector. While hydrogen remains a critical piece of the decarbonization puzzle—particularly for hard-to-abate sectors like steel production and shipping—its role in transportation and energy may be narrower than once thought. Battery-electric solutions continue to improve, with advancements in energy density and charging infrastructure eroding hydrogen’s advantages in many applications. For instance, heavy-duty battery-electric trucks now offer ranges exceeding 300 miles in some models, as reported by Trucking Info, closing the gap with fuel cell vehicles.
This trend suggests a more hybrid future for alternative energy, where hydrogen complements rather than competes with batteries. Cummins and Alstom’s experiences highlight the danger of betting too heavily on a single technology without a clear-eyed view of market readiness. For the EV and energy sectors, the lesson is clear: innovation must be paired with pragmatism, focusing on solutions that align with current infrastructure and cost curves.
Future Outlook: Can Hydrogen Recover?
Despite these setbacks, hydrogen isn’t dead. Policy support remains strong, and breakthroughs in electrolyzer efficiency or cheaper renewable energy could shift the economics. For Cummins, a pivot to focus on specific high-value applications—like hydrogen engines for off-road equipment—could salvage its investment. Alstom might find success in markets with unique constraints, such as remote rail lines where electrification is impractical, though skeptics argue the window for such niches is shrinking.
What to watch: Whether Cummins and Alstom can reposition their hydrogen strategies in 2024-2025 to target viable segments, and if competitors in the EV and battery space continue to outpace hydrogen’s progress. Additionally, keep an eye on green hydrogen production costs—if they fall below $2 per kilogram as some projections suggest, per Bloomberg, the calculus could change.
The Battery Wire’s take: Hydrogen’s long tail of mistakes serves as a reminder that not every clean tech solution is ready for prime time. While the technology holds promise, the path to scalability remains uncertain. Companies must balance ambition with market reality, or risk becoming cautionary tales in the race to net zero.