General Motors Halts Hydrogen Fuel Cell Development Amid U.S. Policy Shifts

On October 10, General Motors announced the cancellation of its next-generation hydrogen fuel cell development plan and scrapped a $55 million investment to build a facility in Detroit, Michigan. This decision is part of a broader move by the company to cease the development of hydrogen fuel cells for everyday driving. Just a year ago, GM had revealed plans to collaborate with a subsidiary of Piston Automotive to construct a new hydrogen fuel cell factory at the Michigan State Fairgrounds. This 290,000-square-foot facility was intended to be GM’s first standalone hydrogen plant. “Now, the project has been terminated,” stated GM spokesperson Stuart Fowle, citing policy changes, a lack of hydrogen infrastructure, and a reevaluation of the company’s portfolio as reasons for this decision. GM stated, “While hydrogen fuel cells have potential in specific high-demand industrial applications such as backup power, mining, and heavy trucks, the path to a sustainable fuel cell business is long and uncertain. The high costs in the U.S. and limited hydrogen infrastructure restrict consumer adoption of fuel cell-powered vehicles.”

However, GM will continue the production of hydrogen fuel cells at a facility in Brownstown for its joint venture with Honda, aimed at commercial mining and heavy trucks. This shift indicates GM’s confidence in the future of electric vehicles but raises doubts about the feasibility of using hydrogen fuel cells to power non-commercial vehicles. Just days before GM’s announcement, the Trump administration proposed canceling two federal grants totaling $52 million that were originally intended for GM’s fuel cell manufacturing system development and hydrogen fuel cell trucks in Pontiac. These grants were approved after the Inflation Reduction Act was passed during the Biden administration. In March 2024, the U.S. Department of Energy awarded GM $30 million for its hydrogen fuel cell project, part of a total funding of $750 million across 52 projects. However, according to Fowle, GM has never received federal funding.

As of 2024, data from the U.S. Department of Energy’s Alternative Fuels Data Center indicates that there are only 54 public hydrogen fueling stations in the United States, nearly all of which are located in California. Since 2016, GM has invested nearly $3 billion in fuel cell technology, most of which began in the late 1990s. Fowle declined to provide more recent figures. The company began researching this technology in the 1960s, debuting two hydrogen fuel cell concept cars. Automakers including GM, Stellantis, and Toyota have invested heavily in hydrogen as a viable propulsion technology, particularly for heavy-duty vehicles. However, market traction and the timeline for investment returns have repeatedly been delayed. This summer, Stellantis announced it would also halt its hydrogen fuel cell development plans, stating that the hydrogen market lacks mid-term growth prospects. Stellantis expects hydrogen-powered light commercial vehicles to not be adopted before 2030. Stellantis’ European COO, Jean-Philippe Imparato, remarked, “In light of the company’s mobilization to respond to Europe’s stringent carbon regulations, Stellantis has decided to stop its hydrogen fuel cell technology development program. The hydrogen market remains a niche without mid-term economic sustainability. We must make clear and responsible choices to ensure our competitiveness and meet customer expectations through our electric and hybrid passenger vehicles and light commercial vehicles.”

In the UK, there are only 15 hydrogen refueling stations, and outside of California, it is challenging to find hydrogen fuel cell vehicles in the U.S., preventing widespread adoption. Nevertheless, BMW and Toyota continue to invest in and develop hydrogen technology. BMW currently has a pilot fleet of the BMW iX5 but has no immediate plans to sell it. The company aims to offer hydrogen-powered vehicles to customers by 2025-2030. Toyota has taken a lead, having launched a consumer-facing hydrogen fuel cell vehicle.

Significant cuts to funding for green hydrogen could aid in decarbonizing various industries, from steel to shipping. In July, China launched the world’s largest green hydrogen plant, and a month later, the Indian government backed 19 projects aimed at making India a leader in green hydrogen production. Saudi Arabia and the UAE are investing billions in hydrogen infrastructure to produce and export this fuel in the coming years. However, the U.S. is currently reducing funding for clean hydrogen projects. Last week, as part of 321 grant cancellations aimed at saving $7.5 billion, the U.S. Department of Energy terminated two of the hydrogen regional centers totaling $2.2 billion in funding. Unlike the other five centers, these two projects in California and the Pacific Northwest focused solely on producing hydrogen from renewable power, making them easy targets for cuts by the Trump administration aimed at Biden-era clean energy initiatives.

This week, a leaked list reviewed by E&E News revealed that the U.S. Department of Energy is preparing to cancel all remaining grants under the federally funded hydrogen hub program. This document, circulated among congressional staff and lobbyists, proposes to terminate over 600 clean energy projects valued at more than $20 billion, including five remaining regional hydrogen centers supported by the bipartisan Infrastructure Law and two direct air capture demonstration sites. “As far as I know, this was the complete list that was submitted to the Office of Management and Budget a few weeks ago,” said an anonymous energy lobbyist. “Last week, they effectively canceled most, if not all, of it.” The lobbyist added, “This is a larger list that will certainly affect more states.” Seven individuals familiar with the internal workings of the U.S. Department of Energy confirmed the authenticity of this list, which also included dozens of grants that were canceled earlier this year. DOE spokesperson Ben Dietderich stated in a release, “The Department will continue to conduct a thorough review of financial awards made by the previous administration. Apart from previously announced decisions, no decisions have been made.” It remains uncertain whether the $24 billion in funding on the new list will be entirely canceled. Those projects that only appeared on the second list, including utilities and carbon removal companies, had not received cancellation notices as of October 10.

However, the potential cuts have sown seeds of doubt in emerging industries and the broader clean energy sector. “Any uncertainty in funding is detrimental to private sector investment and is not going to stimulate domestic innovation or competitiveness on the global stage,” said Rachel Starr, senior policy manager for hydrogen projects at the Clean Air Task Force. “Many other countries are investing in this area. If we stop, we will lose our competitive edge.” Some key Republican lawmakers have expressed concerns that this uncertainty will only increase the challenges facing the hydrogen industry. The Biden administration has established a two-pronged hydrogen strategy through the bipartisan Infrastructure Law and the Inflation Reduction Act. The Inflation Reduction Act’s tax credits for clean hydrogen production aim to help stimulate supply. Meanwhile, hydrogen hubs are intended to coordinate producers and buyers to create regional ecosystems that may connect with pipelines and other infrastructure. “Cuts to these hubs seem shortsighted,” remarked Carrie Schoeneberger, an industrial analyst at the Natural Resources Defense Council who studies hydrogen issues. “This will set the U.S. back and threaten American leadership, contrary to the current administration’s stated goal of U.S. energy dominance.”

As a clean energy advocate noted, the preference for fossil fuels means the U.S. “is betting all its money on a horse that has already lost.” The cancellation of all these projects could undo the immense efforts made by the Biden administration in clean energy. Experts warn that this will have widespread impacts on jobs, the stressed power grid due to demand, and the environment. However, the economic trends—especially the sharp decline in wind and solar costs—indicate that renewable energy may continue to advance. In fact, some target project recipients vow to continue their work, although the scale and pace may be affected. Nevertheless, clean energy advocates warn that the government’s latest actions will incur broad economic and environmental costs. Zealan Hoover, a senior advisor at the EPA during the Biden administration, believes that cutting these funds will undermine the U.S.’s ability to keep pace with China and other countries. “So, let’s be clear: this is a significant setback for U.S. competitiveness and clean energy, regardless of how one views it,” said Hilary Lewis, steel director at the non-profit Industrious Labs. The federal government has long played a crucial role in technological advancement. Tax credits during the Biden era, hydrogen hubs, and other federal investments to manufacture green steel are all “great examples” of supporting industrial clean energy solutions. “But when the government breaks its commitments and cuts such funding, the competitiveness of the U.S. is threatened. We are ceding leadership to other countries willing to make these investments,” Lewis charged.

In a statement on October 2, the U.S. Department of Energy declared that the terminated projects “did not adequately meet national energy needs, were economically unfeasible, and would not yield positive returns for taxpayer investments.” However, at the time, solar and wind energy were gradually becoming the most economically competitive choices for energy investments. On October 7, a report from the energy think tank Ember stated that renewable energy has, for the first time, surpassed coal in the global power structure. Meanwhile, the Trump administration’s attempt to lease the rights to mine 167 million tons of coal on federal land in Montana attracted only one bid of $186,000. According to the International Energy Agency, global renewable energy capacity is expected to more than double in the next five years, even though the Trump administration’s policies lowered forecasts for the U.S. Renewable energy is growing in countries like China, India, Pakistan, and Saudi Arabia, and Germany recently announced a $7 billion investment for industrial decarbonization. Michael Noble, an advisor at a Minnesota clean energy company and a long-time advocate for energy transition, stated, “Wind, solar, batteries, and related technologies are remarkable technologies whose prices are decreasing. These fundamentals are beyond the influence of politicians.”

As Sachu Constantine, executive director of the San Francisco non-profit Vote Solar, put it, “Government support for fossil fuels is betting all our money on a horse that has already lost.”

Hydrogen fuel cell operation is quite similar to that of electric vehicles, featuring a power drive system powered by an electric motor. However, unlike electric vehicles that store electricity in batteries, hydrogen fuel cell vehicles store gaseous hydrogen, which gets converted into electricity onboard. Hydrogen-powered vehicles only emit water while driving, avoiding the harmful gases and other pollutants emitted by fossil fuel vehicles. Unlike electric vehicles that require time to charge, hydrogen fuel cell electric vehicles generate their own electricity through a chemical reaction in the onboard fuel cell stack. A key advantage of hydrogen-powered vehicles is that they can be refueled in 3-4 minutes, similar to using a gasoline pump.

In his 2003 State of the Union address, President George W. Bush put forth a bold vision for the future of clean energy. Standing before Congress and the nation, he announced a $12 billion plan to develop hydrogen-powered vehicles, stating, “The first car a child born today drives may be powered by hydrogen and produce zero emissions.” His message was clear: reduce imported oil and significantly cut automotive emissions. After all, the only byproduct of burning hydrogen is water. The child born that year is now 22 years old, yet hydrogen fuel cell vehicles, which were meant to lead them into a cleaner future, remain absent from their driveways. Aside from a few test markets, they are not found in anyone’s driveway. In fact, Bush’s speech was not merely political theater; hydrogen fuel cells were seen as a potential long-term replacement for gasoline-powered internal combustion engines. Automakers like Toyota and Honda invested heavily in hydrogen fuel cell vehicle prototypes. The notion of extracting the universe’s most abundant element as a clean energy source made sense, especially on paper, as oil prices surged. Yet, two decades later, the hydrogen economy has failed to deliver meaningful benefits to ordinary consumers. The reasons are complex, but five key factors stand out.

Firstly, infrastructure. Hydrogen is a gas with a very low volumetric energy density. It must be compressed to high pressures or liquefied and then transported from production facilities to end destinations. These steps are energy-intensive, requiring cars to have an entirely independent infrastructure apart from gasoline or electric vehicles. This is not a minor hurdle; it represents a multi-billion dollar barrier. Electric vehicles can charge at home or at an increasing number of public parking lots, whereas hydrogen fuel vehicles rely on specialized high-pressure refueling stations, which are costly to build and maintain. Even today, there are fewer than 60 public hydrogen stations in the United States, almost all in California. Without a national infrastructure, widespread consumer adoption is challenging. Without consumers, infrastructure investment is commercially untenable. This creates a classic chicken-and-egg dilemma, and there is currently no clear solution.

Secondly, the cost of clean hydrogen. Currently, approximately 95% of hydrogen is produced from natural gas, a process that emits significant amounts of carbon dioxide. This is referred to as “grey hydrogen,” which is cheap but environmentally damaging. “Green hydrogen” is produced using renewable energy to electrolyze water, avoiding emissions but costing 2-3 times more. Government subsidies can incentivize green hydrogen production, but under Trump’s legislation, the 45V tax credit for hydrogen will terminate starting in 2026, potentially derailing nascent green hydrogen projects and severely hindering their progress. Electrolyzer technology is improving, and costs are slowly declining, but green hydrogen still struggles to compete economically with gasoline and grid electricity. Unless production costs decrease significantly or carbon pricing levels fall, hydrogen for transportation will remain economically disadvantaged.

Thirdly, the rise of battery electric vehicles. In 2003, hydrogen fuel cells and battery electric vehicles competed for the future of zero-emission transportation. Hydrogen fuel had early momentum—Toyota’s first fuel cell vehicle hit the road in the U.S. in 2002. However, the emergence of Tesla and a variety of electric vehicle products followed. Over the last 15 years, improvements in lithium-ion battery density, charging infrastructure, and production scale have made battery electric vehicles the dominant clean car technology. The entire industry has bet on batteries and has been rewarded. Today, global automakers plan to invest $1.2 trillion in electric vehicles and batteries by 2030, with little comparable commitment to hydrogen-powered vehicles.

Fourthly, inconsistent policies. Inconsistent energy policies across different presidential administrations have posed challenges for every energy choice. While the Bush administration initially promoted hydrogen development, subsequent administrations failed to provide policy support. President Obama emphasized battery electric vehicles and solar energy, while President Trump focused on fossil fuels. Only recently, hydrogen fuel has regained some federal support with the Inflation Reduction Act and the bipartisan Infrastructure Law. However, much of the current support has been directed towards industrial applications of hydrogen—steel, ammonia, long-haul trucks—rather than personal vehicles. Without sustained, targeted subsidies and coordination, hydrogen fuel vehicles may not become a market priority.

Fifthly, the energy efficiency dilemma. One of hydrogen’s biggest drawbacks is its low energy efficiency. To power hydrogen fuel vehicles, electricity must first be generated to split water into hydrogen, then compress and transport the hydrogen, and finally convert it into power for the vehicle, with each step resulting in energy loss. In contrast, battery electric vehicles store electricity directly, resulting in much less waste. The final outcome? The efficiency of battery electric vehicles using renewable energy is three times that of hydrogen fuel vehicles. Such calculations do not favor hydrogen—at least for passenger vehicles.

Despite these challenges, hydrogen remains one of the most important industrial chemicals globally. In fact, it is garnering increasing attention in sectors where batteries fall short, such as heavy-duty trucks, shipping, and aviation. If certain industrial processes, such as steelmaking and fertilizer production, are to decarbonize, hydrogen is essential. The International Energy Agency predicts that clean hydrogen could play a significant role in future net-zero emissions. However, this role is more likely to involve powering cargo ships and industrial furnaces than personal transportation.

President Bush’s vision of a hydrogen economy was admirable, rooted in innovation, emission reduction, and securing America’s energy future. Yet, the execution has proven far more challenging than achieving the goals. While hydrogen is not the panacea many once hoped for, hydrogen fuel still holds promise; the path ahead requires technological breakthroughs, regulatory clarity, and realistic expectations about hydrogen’s true value. Bush’s grand dream was correct. However, as the last 20 years have shown, the obstacles involved in making that dream a reality are far greater than many supporters initially envisioned.