Techno-Economic Assessments

P Mock and SA Schmid, German Aerospace Center (DLR), Institute of Vehicle Concepts, Stuttgart, Germany
& 2009 Elsevier B.V. All rights reserved.

factors are technological parameters as well as overall

costs, which have to meet the expectations of potential
customers in order to influence their purchase decision.
But how does one know if and at what point in time
these expectations will most likely be met? Regularly,
experts of a specific technological area are being interviewed for their opinion on future developments in order
to assess the plausibility of market success of a new
technology. However, studies show that interviews with
technological specialists often lack objectivity and tend to
be strongly influenced by recent developments during
the past few months before the interview was carried out.
On the contrary, there exist several methods summarized under the name of techno-economic assessment
which can be combined to give a set of tools for carrying
out a more objective assessment of new technologies with
regard to their technical parameters and production costs
(Figure 1). Even then, future developments and therefore
the likeliness of market success still remain uncertain but
it becomes possible to narrow down options for different
trajectories and to objectively discuss several scenarios for
future developments.
In the following sections, the method of techno-economic assessment will be set out in general and demonstrated specifically for the example of fuel cells and
batteries. With regard to the exceptional importance for
society, the focus of the analysis will be on the application of these technologies in propulsion systems of
future passenger cars.

Introduction
In view of a possible climate change and increasing
oil-prices, there is a need to change our rate of using
carbon-intensive fossil energy resources in the future.
Fuel cells and batteries have been proposed as technical
solutions for energy conversion and storage, allowing for
paving the way for a prospective world relying mainly on
renewable low-carbon intensive energy sources.
For manufacturers considering investing into research
and later on into production facilities for these technologies as well as for public planners and concerned politicians, several questions with regard to a possible launch
of the technologies arise:
Taking into account all relevant influencing factors,
do fuel cells and batteries have a realistic chance to
gain a noteworthy share of the market in the future?
Are there any supplementary economical, political, or
infrastructural measures available and possibly required to enhance introduction of fuel cells and batteries into the market?
What will be the overall effect of introduction of fuel
cells and batteries in large numbers with regard to
future fossil energy consumption as well as greenhouse gas emissions?

In general, market success of a new technology heavily

depends on its competitiveness with respect to established technologies in a particular business sector. Key

Patent
analysis

Publication
analysis

R&D
activity
analysis

Position on technology life cycle

Expectation on general future development
Analysis of technological parameters
Identification of key technical parameters
Evaluation of technical limits and targets
Estimation of specific future development
Cost assessment
Estimation of production costs
Low volume or mass production
Identification of influences and uncertainties
External influences
Competing technologies

Integrated modeling

Competitiveness
Future market scenarios

Figure 1 Scheme of a workflow for a techno-economic assessment including tools for analysis and general result descriptions for
individual assessment steps.

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Batteries and Fuel Cells | Techno-Economic Assessments

Theory of the Technology Life Cycle and

s-Curve Analysis
Fundamental basis for the method of techno-economic
assessment is the theory of the technology life cycle.
According to this theory, new technologies evolve
through an initial period of slow growth, followed by one
of fast development and finally leading to a period of a
decreasing growth rate. Several more detailed segmentations have been proposed to describe a technology life
cycle, consisting of four, five, or even six succeeding steps.
However, all of these concepts are based on three fundamental phases in the life cycle of a technology, which
usually are defined as introduction stage, growth stage,
and maturity stage.
Introduction Stage
Technological output increases only marginally, as the
new technology is widely unknown and does not attract
attention of many researchers and funding. There are
elementary technical problems still to be solved in order
to prove a possible future relevance of the new technology and this slow progress is constantly interrupted by
disappointments and major drawbacks in development.
There is a high danger of failing and further research and
development (R&D) on the technology could be stopped
as soon as other technological concepts are found to be
more promising.
For fuel cells for example, the time period between
1970 and 1990 could be regarded as an introduction stage
for the technology of proton-exchange membrane fuel
cells (PEMFCs). At this point of time, only a few isolated
laboratories worldwide were involved in research on fuel
cells in general and especially few on PEMFCs, as there
were many elemental hurdles for application of the
technology.
Growth Stage
With continued research activities, the technology
crosses a threshold and now follows a process of rapid
growth. Reasons for this sudden increase of technological
output could be the solution of a major technical problem
or the emergence of a dominant standard that characterizes the now evolving technological products and
helps to focus research on the new consensus platform.
The success of a single team in terms of a technological
breakthrough now attracts publicity and increased research funding and therefore animates other researchers
to study the technology, which often causes new breakthroughs. First products based on the new technology are
being developed for sale and promise future profits,
therefore attracting further interest and stimulating research activities.

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For PEMFCs, the early beginning of the growth stage

could be seen toward the beginning of the 1990s when
new membrane materials were found that enabled a
much higher power output of the fuel cell stack than
before. Interest grew for example among car manufacturers and more and more laboratories worldwide got
involved in fuel cell research activities.
Maturity Stage
Following the period of rapid growth, the pace finally
decreases and technological output slowly reaches a low
plateau. Further improvement of the technology now
does not happen anymore or requires an enormous
amount of time or research funding for a relatively small
progress. Various explanations for this effect are being
discussed in the literature. A possible reason could be a
shift from product to process innovation as markets saturate and the need for cost reduction dominates the need
for improvement of technological parameters. A different
explanation points to the fact that there are limits for
every technology beyond which technical systems get too
complex to work reliably and cheaply. Whenever these
limits are achieved, it is necessary to radically change the
technological platform in order to continue the progress
a new technology life cycle begins.
For the example of fuel cells, this stage of maturity has
not been reached yet. There are still significant technological developments on their way, resulting in improvements of key parameters relevant for mass market
introduction. It is not before production of higher volumes starts and process innovations gain in importance
that the technology might enter maturity stage.
s-Curve Analysis
If technological progress (output) of each of the steps in a
perfect technology life cycle is plotted cumulatively
(indicating overall technical performance) versus time or
research funding (input), an s-curve shape reaching a
level of saturation toward the end of the development is
the result (Figure 2). This relationship is the basis for the
theory of the s-curve, often applied in technology
assessments.
It is important to differentiate between technology scurves and market s-curves. Technology s-curves, as
shown above, focus on technological advancements,
whereas market s-curves describe the diffusion of a
technology into the consumer market. Despite their
similar shape, both curves express different evolutions.
For example, for PEMFCs, from a technology s-curve
point of view growth stage has already been reached and
major technical advancements have been achieved,
whereas from a market s-curve point of view they are still
in the introduction stage phase with a high level of uncertainty with regard to a possible future market success.

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Batteries and Fuel Cells | Techno-Economic Assessments

Technological
progress

Technical
performance

Research
activities, time
Introduction

Growth

Maturity

Research
activities, time
Introduction

Growth

Maturity

Figure 2 Idealized technology life cycle with schematic identification of major important phases during the lifetime of a technology.
When plotting annual changes of technical performance indicating a technological progress, the result is a normal distribution. When
plotting cumulative changes, an s-curve shape is derived.

If the current position of a technology on its life cycle

is known, according to theory this information could be
used for a prognosis on its most likely future development based on an s-curve shape. By using this technique,
it would be possible to estimate the point of time when a
technology will likely reach its phase of maturity and to
what extent further improvements of technological
properties could be expected.
In this context, it is necessary to realize that a development according to the theory of product life cycle
as well as the theory of the s-curve shape is not a natural
law always found to be perfectly true. Yet, it has been
proved to be accurate for many different products analyzed in the past.
Nevertheless, there are deviations to the theoretical
development and even cases for which researchers did
not find an s-curve shape development for a technology.
For example, for some technologies, it was found that
they tend to show a slow introduction stage growth followed by an early and strong increase presumably for the
growth stage. However, this strong development is then
suddenly stopped. Early expectations are disappointed
and it takes some more time until a new phase of growth
begins, now more slowly but sustainable.
Definition of Relevant Parameters
A major challenge of the s-curve analysis approach is the
definition of parameters for input and output of technological growth. Many researchers suggest R&D funding as the input parameter best suited in theory. However,
practically in most cases, data on R&D funding for a
single technology are not available in great detail.
Therefore, usually time is used as the input parameter for
an s-curve analysis serving as a proxy for R&D funding
on the abscissa.

Defining a parameter for measuring technological

progress (output) on the ordinate axis is also a challenging task. Especially for complex products, often it is
not possible to find one single parameter suited to incorporate all relevant information. Literature suggests
using a parameter closely related to customer expectations mirroring the aspect of a technology that is most
important to a future customer. An example is the development of turbo jet engines replacing internal combustion engines (ICEs) for airplanes where technology
development was best measured by top speed of the
aircraft, as this was the most important factor for potential customers during this particular period of technological transition.
Instead of using a specific technical parameter as an
output indicator, data on patent applications for a type of
technology are often suggested as a proxy for technological progress. The argument is that a patent application
usually would incorporate one or more relevant technological developments that are regarded as valuable
enough by the applicant in order to file a request for a
patent. This aspect will be discussed in more detail later
on. It should be noted that some researchers suggest data
on patent applications as an input parameter for technological growth. This would be true if the ratio between
R&D funding and patent applications was a constant
value, patents therefore being a proxy for the amount of
money spent on research.
Multiple s-Curves
Definition of the point in time when a new s-curve begins
is not always obvious to the analyst. As shown later on,
switching from alkaline fuel cell (AFC) technology to
PEMFCs started a new s-curve as the technological basis
is quite different for both technologies. However, for

Batteries and Fuel Cells | Techno-Economic Assessments

example, it is not yet approved if switching from

PEMFCs used today to enhanced high-temperature
PEMFCs also will start a new s-curve as differences in
technology might not be relevant enough to justify such a
step.
Furthermore, a subsequent technology s-curve might
overlap the preceding s-curve, indicating that R&D for a
revolutionary technology begins while further advancements are still being made to the incumbent technology,
which has not yet reached its limit of technical performance. This might result in a series of overlapping
notional technology cycles leading to a multiple s-curve
shape development, as shown in Figure 3.
Bearing in mind these limitations and possible shortcomings with regard to the concept of the technology life
cycle and the method of s-curve analysis, they will be
used to assess the technologies of fuel cells and batteries
in the following sections.

Patent and Publication Analysis

Patent applications as well as scientific publications offer
the advantage of being internationally standardized and
easily countable using electronic databases. Both are
often suggested as proxies for overall technological progress. This is under the assumption that advancements
regarding a technology are filed at a constant rate as
patent applications and/or as scientific publications. For
the example of patent applications, this would mean that
a constant percentage of inventions would always be
applied for as a patent, while the rest of them for instance
would be kept secret instead of filing a patent application.
The development of the number of patents and publications with respect to R&D funding or time then correlates to the development of a technology life cycle and
offers the opportunity for an s-curve analysis to derive
conclusions on any probable future progress.
In addition to the advantages of standardization and
availability, data on patent applications furthermore include an indicator for the expected economic impact of a
Technical
performance
Limit 3
Technology 3
Limit 2
Technology 2

569

technological progress. As filing a patent usually requires

considerable financial effort for paying annual patent
fees, it is to be expected that only inventions that promise
an economic added value to the applicant are in fact
being filed.
However, the culture of applying for a patent differs
worldwide. According to the literature, incentives paid by
companies to the their employees for filing a patent application are higher in Japan than they are in the United
States or Europe. This leads to the situation that there
are generally more patents being filed in Japan, even for
less significant inventions.
Furthermore, there are differences between industry
sectors; for example, the pharmaceutical industry commonly files more patent applications than the automotive
industry.
Finally, statistics on patent applications sometimes can
be misleading as a certain proportion of patents have to
be regarded as defensive patents, not intended to mark a
significant step forward in technological development but
to keep out competitors from further research by
blocking a major important key patent.
Sources of Information
For a profound statistical analysis of patent applications,
several databases at different levels of quality exist. Those
specifically specialized on patent applications and managed by experts who spend much time analyzing, translating, and indexing new patents are to be preferred.
Generally, there is a time lag of 23 years before a
new patent application can be found in one of these
databases. The reason is a temporary protection time
allowed for every applicant by the responsible patent
organization before a patent application is published.
This period of time is independent of the final analysis of
a claim and eventual grant of the patent itself. It is to
some extent different depending on the country or organization where the patent is being filed and can be
prolonged by the time needed by the responsible office
for publication once the temporary protection time has
expired.
For publication analysis, there exist several databases
for analyzing scientific publications offering different
levels of comfort and detail for search purposes. Preference should be given to journals or books that are
peer-reviewed by other scientists. This system ensures a
certain level of quality and respectability of the articles.

Limit 1
Technology 1
Research
activities, time

Figure 3 Scheme of overlapping technology cycles leading to a

multi s-curve shape development.

Filtering of Relevant Information

When using statistical data on patent applications as a
source of information to derive conclusions on future
technology development, it is critical to find an appropriate way of filtering for relevant technology patents.

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Batteries and Fuel Cells | Techno-Economic Assessments

One convenient way is to use the International Patent

Classification (IPC), which can be found in most databases, as a parameter for filtering results. This system was
already introduced in 1975 and therefore a majority of
worldwide existing patents belong to one or more IPC
classes. Unfortunately, the categories of the IPC system
are relatively imprecise, for instance not differentiating
between different types of fuel cell systems. There exist
other classification systems used only regionally by certain patent offices or commercial databases that often
allow a more precise filtering of results. These indices
often have the disadvantage of covering only patent files
of the past few years and therefore not allowing for deriving historical statistical series reaching back further in
time.
For the reasons discussed, it is often necessary for an
analyst to use keywords for filtering patent application
data. In this case, it is essential to carefully select appropriate keywords in order to avoid falsified results.
This can be assured by examining random sample result
entries in detail, to decide whether they are a correct and
desired result entry or whether the search term has to be
modified. Moreover, any keywords chosen should be
discussed with experts of the specific field of technology
to assure their practicability in completely covering the
technological field analyzed.
When looking at scientific publications, as there is no
common classification system, using keywords usually is
the only way to find appropriate entries.

offices are included in every database), but lately generally show an average growth of approximately 4.75%
per year according to the Worlds Intellectual Property
Organization. As the Organization states, the number of
patent applications per year has doubled from 1985 to
2004 to approximately 1.6 million patent applications per
year. The growth rate closely follows the increase in
world gross domestic product (GDP) and is most evident
for developing countries like China and India. Only a
fraction of patent applications really lead to a final issuing. In 2004, there were 0.6 million patents issued
worldwide, resulting in more than 5.4 million patents in
force.
For the field of scientific publications, a similar growth
is observable. The total number of articles or books
published annually is increasing steadily, again total
numbers depending on the database analyzed. For example, ScienceDirects, the online database of Elsevier
B.V., has indexed approximately 400 000 files for the year
2006 compared to approximately 150 000 in 1985.
This has to be kept in mind when analyzing patent or
publication statistics over a long period of time. Just like
taking inflation into account when looking at business
statistics, it might be necessary to adjust for increasing
total numbers in annual patent applications or scientific
publications, and therefore looking at relative numbers in
percent of all patent applications/publications of a specific year instead of absolute values.
Fuel Cells and Batteries

Interpretation of General Results

Proportion of total annual patent applications (%)

The total number of annual patent applications worldwide is increasing continuously. Absolute figures depend
on the database used for analysis (as usually not all patent

For fuel cell technology, there are two boom phases of

patent application activity evident when plotting the
ratio of patent applications for fuel cell technologies and
overall patent applications versus time (Figure 4).

0.25

0.20

Proton-exchange membrane fuel cell (PEMFC)

Alkaline fuel cell (AFC)
Direct methanol fuel cell (DMFC)
Phosphoric acid fuel cell (PAFC)

0.15

0.10

0.05

0.00
1950

1960

1970

1980

1990

2000

2010

Figure 4 Historical analysis of worldwide annual patent application numbers for various fuel cell types. To account for generally
increasing annual patent application numbers, values are given as a proportion of relevant applications in comparison to the sum of
patents for all topics.

Batteries and Fuel Cells | Techno-Economic Assessments

Proportion of total annual patent applications (%)

During the 1960s, the proportion of patent applications related to four major important types of fuel cells
compared to all patent applications increased from close
to zero to more than 0.2% before decreasing again down
to o0.05% in 1975. The major driver of this development was the AFC technology.
It can be assumed that the strong increase of fuel cell
research activity was mainly due to aerospace research at
that time. Fuel cells were developed to be applied during
space flights producing energy and water for the spacecraft. They were selected over other competing power
systems as they better met defined requirements with
regard to power, efficiency, weight, lifetime, reliability,
and safety. Furthermore, they offered the advantage of
being able to produce drinking water for crew consumption and cabin air humidification.
For example, NASA Apollo missions between 1968 and
1972 made use of an AFC onboard. Other types of fuel
cells played a less decisive role at that time. The PEMFC
technology was first used during NASA Gemini missions
from 1962 to 1965, but later on the AFC type was preferred
as it was regarded more suitable and reliable.
After the decrease in the 1970s, it was not before the
mid-1990s until a new boom of fuel cell technology research activity started. In about 1995, the proportion of
patent applications for the four most relevant fuel cell
types compared to all patent applications started increasing from approximately 0.05% to 0.5% about 10
years later.
The main driver for the currently ongoing boom is
PEMFCs. The number of patent applications for this
type of fuel cells started increasing earlier than it did for
other types and has by far the highest proportion of all. It
can be expected that the use of PEMFCs in automotive

0.20

0.15

571

applications played an important role in the development

as first prototypes of fuel cell-driven passenger cars and
buses were presented at the time.
According to patent statistic data available up to date,
there are no clear indicators for an end of the current
trend, as patent application numbers for fuel cell technology continue increasing. If plotted cumulatively, the
two-fuel-cell patent application booms form a double
s-curve shape with the second s-curve not having
reached its limit of growth yet.
For batteries, there are several phases of research activity apparent when analyzing historical patent application statistics for different types of batteries (Figure 5).
From the beginning of the 1980s until the mid-1990s,
there was a patent activity with regard to leadacid-based
batteries. The proportion of annual patent applications
for this specific type of battery increased sharply to approximately 0.1% when compared to the total number of
all patent applications. The proportion decreased slowly
afterward, but today is still close to 0.05% of all patent
applications.
In 1990, patent application numbers for nickelmetalbased batteries increased from approximately 0.02 to
0.06% of all annual patent applications. First nickel
cadmium batteries and later on nickelmetal hydride
batteries did attract research and caught significant shares
on the sales market for consumer cells. One reason might
have been an increasing focus on battery electric vehicles
(BEVs), especially in California, at the beginning of the
1990s. In the meantime, the proportion of this battery
type compared to all patent applications decreased to
approximately 0.02%.
Today, the majority of patent applications on batteries
are for the lithium-ion-based type of cells. The proportion

Leadacid-based batteries
High-temperature batteries
Lithium-ion-based batteries
Nickelmetal-based batteries

0.10

0.05

0.00
1970

1975

1980

1985

1990

1995

2000

2005

Figure 5 Historical analysis of worldwide annual patent application numbers for various battery types. To account for generally
increasing annual patent application numbers, values are given as a proportion of relevant applications in comparison to the sum of
patents for all topics.

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Batteries and Fuel Cells | Techno-Economic Assessments

of annual patent applications for this specific type compared to all patent applications is approximately 0.17%.
The strong growth in patent application numbers began
during the early 1990s, shortly before the increased research activity for fuel cells, and continues until now.
Analysis of scientific publications in the area of fuel
cell technology leads to similar results as patent analysis.
The number of publications on fuel cells increased about
10-fold from 1995 to 2005 and no end of the growth trend
is yet to be observed.
A majority of approximately 65% of todays publications on fuel cells are on the PEMFC technology type,
followed by a significant number of publications on direct
methanol fuel cells (DMFCs). On the contrary, DMFC is
only in position four when differentiating patent application statistics between types of fuel cell technologies.
This might be an indication of the number of research
activities on DMFC that do not lead to the same number
of patent applications yet.
Depending on the database used for analyzing publication data, it is furthermore possible to differentiate
the regional distribution of scientific publications. For
fuel cells in general, it is evident that regional distribution of the origin of scientific articles on fuel cell
technology has changed. Up to 1984, a large proportion
of publications originated from the United States,
whereas in the years after Asian countries first Japan
and later on China and South Korea gained an increasing share in the number of publications on fuel cells
(Figure 6). Other countries with a notable proportion in
consideration of their size are Canada, Germany, Italy,
France, Great Britain, and the Netherlands. Especially
for China, a significant increase in the number of

scientific publications on fuel cells is found lately. Chinas

proportion went up from close to zero in 1995 to more
than 10% these days.

Applying s-Curve Theory

Patent statistics are often proposed as a proxy for overall
technological progress. Therefore, when applying the
s-curve analysis method to patent application statistical
data versus time, the result should give an insight into the
current position of a technology on its life cycle and its
expected future development.
Applying the technique to data of the first fuel cell
boom dominated by AFC technology during the 1960s
indeed draws upon this theory. The cumulative number
of patent applications on AFC technology between 1950
and 1980 follows a nearly perfect s-curve shape
(Figure 7). When looking not only at absolute patent
application numbers but also the proportion compared to
the total number of all patent applications for the year,
this trend is even more apparent as the total number of
all patent applications also increases over time.
Using special computer software for curve fitting, it is
possible to make a correct prognosis of the future development of patent applications for AFC technology
using only data points up to the year 1966. Therefore, the
method of s-curve analysis together with historical patent
application data would have been a qualified method for
making a correct prognosis of future research activities
for the case of the AFC technology.
It should be noted that using less data points, which
means using a data set not including the years up to 1966,

Share of publications on fuel cell technology (%)

100
Other
South Korea
India
China
Japan
France
Sweden
Netherlands
Italy
Germany
UK
Canada
USA

80

60

40

20

0
1975
1979

1980
1984

1985
1989

1990
1994

1995
1999

2000
2004

2005
2006

Figure 6 Geographical distribution of the origin of the authors of scientific publications on fuel cells in general, differentiated by a set of
time periods. Numbers are given as a proportion of publications for a specific country in comparison to the sum of publications for all
countries.

Batteries and Fuel Cells | Techno-Economic Assessments

573

1200

Patent applications AFC (cumulative)

Idealized s-curve
Historical data
900

600

300

0
1950

1955

1960

1965

1970

1975

1980

Figure 7 Historical cumulative patent application numbers for alkaline fuel cell (AFC) type. An idealized mathematical s-curve was
fitted to the data points given.

Patent applications PEMFC (cumulative)

20 000
Idealized s-curve
Historical data
16 000

12 000

8000

4000

0
1990

1995

2000

2005

2010

2015

2020

Figure 8 Patent application numbers for proton-exchange membrane fuel cell (PEMFC) type. An idealized mathematical s-curve was
fitted to the data points known so far to estimate likely future progress.

would not have led to a correct result. Therefore, a certain

number of data points have to be known before a correct
prognosis using the s-curve analysis method is possible.
To find out about a likely future development of the
current PEMFC technology boom, which began in the
1990s, the method of s-curve analysis is applied to the data
set of patent applications on PEMFCs known until today.
Development started approximately in 1995 and so far
has reached about up to 6000 cumulative patent applications. Applying a mathematical s-curve shape to the
data set using computer software leads to a curve
reaching a plateau of cumulative patent applications in
approximately 2015. The total number of patent applications filed on PEMFC technology would be approximately 18 000 at this point (Figure 8).

This analysis suggests that todays PEMFC technology is still in its growth phase of technology life cycle
but might reach maturity phase by approximately
2015.
It is important to realize that even after this plateau of
maturity is reached, it does not mean that there are no
further technological advancements possible for fuel cells
anymore. On the contrary, it is possible and likely that a
new type of technology with different technological
limits will start a new s-curve.
An example for this could be the high-temperature
PEMFC technology, which offers some advantages in
application but today is still in its introduction phase
with only limited research activities and severe hurdles
for mass production and application.

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Batteries and Fuel Cells | Techno-Economic Assessments

Research and Development Activity

Analysis
Whereas an analysis of statistical data on patent applications and scientific publications reveals an indication
for the technological progress realized, a supplementary
analysis of R&D funding furthermore allows an insight
into the expenditures that were necessary to achieve
these technical advancements as well as further technical
developments that might be expected from continued
R&D funding.
According to theory, data on R&D activity are to be
placed on the abscissa of a technology life cycle chart,
indicating research input, whereas technological progress
or number of patent applications and scientific publications evolving from this R&D activity should be on the
ordinate axis, indicating technological output. The ratio
between R&D funding (input) and any of the output
parameters therefore is an indicator for the efficiency of
research activities in a certain technological field, a
country, or even a specific company.
Collecting detailed and comparable data on R&D
funding is a challenging and often impossible task as the
structure of funding is very differently organized regionally. Usually statistics on overall public government
funding exist; yet a detailed differentiation according to
specific technology types is typically hard to obtain.
Especially for the private sector, which is responsible for
a significant proportion of overall R&D funding, statistical financial data differentiating between specific
technology fields are hardly available publicly as most
companies publish only summarized statistics of their
overall research activities.
An example of a company where R&D expenditures
are available at a high level of detail is Ballard Power

Systems. For most of the time, the focus of the companys

activities was clearly on the area of fuel cell technology.
Therefore, R&D expenditures published regularly in the
annual reports of the company can be assumed as an
input solely for the companys R&D on fuel cells. Additionally, worldwide patent applications of the company
can be drawn from a detailed patent analysis.
The R&D funding of Ballard Power Systems increased from approximately 30% of its turnover in 1994
to more than 200% in 2001 and then dropped sharply to
90% in 2003. Afterward, it remained at approximately
90130% until today. The number of annual patent applications of the company closely followed this development, also reaching a top level in 2001 and decreasing
afterward.
Therefore, when plotting cumulative patent applications of Ballard Power Systems versus cumulative R&D
expenditures (accounted for inflation), a nearly straight
line is the result (Figure 9). Cumulative patent application numbers go up to 600, whereas cumulative funding reaches close to 800 million US$2006 (US dollar of
the year 2006).
Intensive R&D funding does not always have to result
in the desired technological output and final success in
the market. In Germany, for example, between 1973 and
1993, a large proportion of the public funding on battery
research was devoted to sodiumsulfur batteries, a hightemperature type of battery (Figure 10). However, patent
application numbers for this type of battery were low
compared to other types and did not increase substantially with higher funding. The technology did not
make it into the mass market and nowadays can be found
in niche positions only. Public R&D funding for sodium
sulfur batteries dropped to zero in 1994, whereas lithiumbased batteries now account for close to 100% of all

Cumulative patent applications worldwide

700
R 2 = 0.99
600
2004
500

2006
2005

2003

400
300

2002

200

2001
2000

100
1999
0
0

100

200

300

400

500

600

700

800

Cumulative R&D expenditures (million US$ 2006)

Figure 9 Cumulative worldwide patent applications of Ballard Power Systems versus overall cumulative research and development
(R&D) expenditures of the company.

Batteries and Fuel Cells | Techno-Economic Assessments

575

Proportion of annual public R&D funding (%)

100
Lithium based
Nickel based
Lead based
Sodium based

80

60

40

20

0
1970

1975

1980

1985

1990

1995

2000

2005

2010

Figure 10 Historical development of annual public research and development (R&D) funding on batteries in Germany. Values are
given as a proportion of funding for a specific battery type compared to the sum of funding on batteries in general.

public German R&D funding for batteries. Patent application numbers for this type of technology increased
dramatically; therefore, the input/output ratio regarding
R&D is significantly better for lithium-based batteries
than it was for the sodiumsulfur battery type.

Analysis of Technological Parameters

Using patent and publication analysis as well as R&D
activity analysis, it is possible to assess the current position of a technology on its life cycle and to get an insight
into how much further technological development is
likely to be expected in the future. Nevertheless, the
methods do not tell how these advancements could look
like and which specific aspects of the technology could be
affected.
To close this gap of information, it is helpful to
analyze the key parameters of a technology for its success
on the market, and to analyze the past developments and
technical limits of these parameters. Together with information previously gained, it is possible to draw conclusions on a likely future development for each of the
key parameters.
For identifying the key parameters of a technology, it
is necessary to be aware of the expectations of potential
future customers. They are used to the established
technologies currently found in the market and not
willing to give up any comfort these technologies offer to
them, unless they are stimulated or forced by other
measures, for instance taxes causing economic implications. Therefore, in order to be competitive, the new
technology has to fulfill or surpass the values for key
parameters set by current technologies.

For fuel cell or solely battery-driven passenger cars,

these key parameters from a customer point of view include acceleration and top speed, driving range, easy
fueling and everyday usage, durability, safety, and costs.
From the perspective of a car manufacturer, these
parameters would translate into the following terms:
power output, power-to-weight ratio, power and energy
density of the propulsion concept, efficiency of the vehicle power train, energy density and handling of the fuel
storage system, durability, cold start ability, safety, and
costs.
Once the key parameters are identified, a historical
trend analysis can help to find out more about past research advancements and in combination with target
values for the future usually set by manufacturers or
politics or simply by customer expectations to assess
the likeliness of a future development and of meeting
these targets. Furthermore, interviews with experts and a
review of technical literature allow taking into account
the latest scientific developments when judging the
likeliness of meeting future target values.
Power
For fuel cell stacks, a technological key parameter is stack
power. The first PEMFC of Ballard Power Systems
(Mk 3) had a power output of approximately 0.4 kW in
1984. During the following years, stack power increased
strongly until it reached close to 110 kW in 2006 (Mk
1100). Unlike in earlier times, it is now possible to run
major applications without having to problematically
interconnect several individual fuel cell stacks.
When plotted not versus time but versus R&D expenditures of the company, it becomes evident that the

576

Batteries and Fuel Cells | Techno-Economic Assessments

1 000 000
Mk 900

Fuel cell stack net power (W)

100 000

Mk 1100

Mk 902
Mk 7
Mk 513
Mk 5 (2)
Mk 5 (1)
Mk 4
Mk 3

10 000

1000

100

10

Mk 1*
*Single cell

1
0

100

200

300

400

500

600

700

800

R&D expenditures Ballard Power Systems (cumulative) (million US$ 2006)

Figure 11 Historic development of net power of Ballard Power Systems proton-exchange membrane fuel cell (PEMFC) stacks versus
cumulative research and development (R&D) expenditures of the company.

slope decreased as the product matured (Figure 11). At

the beginning, low R&D expenditures were enough to
increase power output of the stacks from 0.4 kW to approximately 10 kW. Afterward, the progress slowed down,
indicating that now more funding input is needed than it
was before in order to increase power output.
Therefore, from a technology life cycle point of view,
fuel cells have reached maturity phase for the parameter
of power output, even if maturity phase has not yet been
reached for other technical aspects, and major developments with regard to power output of the stacks are not
to be expected in near-term future. This phenomenon
can be explained by analyzing the needs of potential
customers: whereas during the first years of research,
power output was the main focus for fuel cell research
activities in order to allow application of the cells (for
example, as a propulsion concept for submarines or
passenger car and bus prototypes), the focus of research
activities shifted toward other technological parameters
later on.
This is because a fuel cell stack power output of more
than 100 kW is enough to run an average passenger car
while ensuring satisfaction with regard to top speed and
acceleration. For example, top speed of fuel cell-driven
passenger cars has already almost reached the level of
conventional vehicles. During the 1990s, top speed was
usually below 130 km h1, whereas this value increased
steadily and now is at 160 km h1 and more for current
prototype vehicles. For comparison, top speed of gasoline
and diesel passenger cars in Europe is typically approximately at 200 km h1. Product performance in terms
of top speed should therefore satisfy the expectation of
most of the potential customers and be no hurdle for
mass introduction anymore.

Power Density
The parameter power density indicates the power output
of a stack with regard to its volume or weight. As both
volume and weight are limited, especially in passenger
cars, power density is a key parameter for the development of fuel cell stacks.
The first PEMFC stack application for NASA Gemini
mission in the 1960s achieved a power density of
20 W L1. During the 1980s and 1990s, Ballard Power
Systems for instance was impressively successful in improving this value so that by the year 2000 their fuel cell
stacks had a volumetric power density of approximately
1300 W L1. Today, the Mk 1100 module, which in contrast to the stack does include some auxiliary equipment,
reaches about 1340 W L1. Other manufacturers, for instance Honda, claim to have already reached higher
values up to about 1900 W L1 for the latest stacks. Ballard Power Systems own target value for 2010 is at
2500 W L1, and the target set by the US Department of
Energy (DOE) is 2000 W L1 (Figure 12).
Gravimetric power density, indicating the ratio of
weight of the fuel cell stack in comparison with its power
output, improved similarly over time. Development
started with approximately 15 W kg1 for the NASA
Gemini PEMFC stack and now is at approximately
1000 W kg1 for the Mk 1100 module or 1500 W kg1 for
the current Honda fuel cell stack. The DOE target value
for the gravimetric power density of the stack is
2000 W kg1 for 2010.
Although formal differences between manufacturers
in the definition of power density complicate a comparison of the current status, after analyzing the historical
development of volumetric and gravimetric power

Batteries and Fuel Cells | Techno-Economic Assessments

577

Power density of fuel cell stack (W L1)

3000

2500

Various fuel cell stacks

Ballard power systems fuel cell modules
Ballard power systems technology roadmap
Honda fuel cell stacks
Department of energy (DOE) monitoring

2000

Ballard target

DOE target
Honda

1500

Mk 900
Mk 7

1000

DOE target
Mk 1100
Mk 902

500
NASA Gemini
0
1965
1975

Mk 4
1985

Mk 513
Mk 5
1995

2005

2015

Figure 12 Historic development of volumetric power density of proton-exchange membrane fuel cell (PEMFC) stacks including
various targets set for the future.

density of PEMFC stacks, it seems realistic that the

target values set by the DOE could be achieved. Ongoing
research activities and new materials, for example thin
metallic bipolar plates, should enable further improvements in the near- and mid-term future.
For a single fuel cell, power density is defined by the
voltage of the cell as well as the current flow through the
active area of the cell. Values increased from approximately 30 mW cm2 for the first PEMFCs in the 1960s to
approximately 600800 mW cm2 today. The target value
set by the DOE is at 1000 mW cm2 for 2010. Reaching
this target would allow to reduce the active surface area of
the cells and therefore the overall surface of the stack
while ensuring the same power output as before.
Cell power densities at the magnitude of
1000 mW cm2 and even higher have already been
achieved in laboratory before. Hence, although there are
opposed interdependencies between power density and
catalyst loading, it seems reasonable that a value of approximately 1000 mW cm2 could be achieved not by
2010 but at least shortly after.
When assessing power density, the view at the vehicle
level offers the advantage of being rather independent of
formal definitions. Dividing the maximum power output
of a passenger vehicle ICE or fuel cell by the curb weight
of the vehicle is an indicator for the overall power density
including the fuel storage system and all necessary
auxiliaries.
Values for this so-called power-to-weight ratio for
conventional passenger cars today are at approximately
90 W kg1 for gasoline vehicles and 70 W kg1 for diesel
vehicles, with diesel vehicles usually built heavier than
their gasoline counterparts owing to a higher pressure
within the engine. Power-to-weight ratio for conventional

vehicles used to be much lower in earlier years starting at

approximately 3060 W kg1 at the beginning of the
second part of the twentieth century (Figure 13).
For Necar 1, one of the first PEMFC-driven cars,
power-to-weight ratio was at approximately 10 W kg1 in
1994. The vehicle was large and heavy and at the same
time had a relatively low power output. Values for fuel
cell passenger car prototypes increased significantly
during the upcoming years reaching approximately
50 W kg1 today. Even though power-to-weight ratio of
conventional vehicles also improved significantly in the
meantime, the slope of increase was much higher for fuel
cell-driven cars.
This strong development regarding power-to-weight
ratio supports the results of the assessment of power
densities at the cell and stack level and suggests that fuel
cell vehicles (FCVs) are likely to become competitive
compared with conventional cars in terms of gravimetric
power densities within the next few years, even when
including the weight of the fuel storage system.
Energy Density
For batteries, energy density is a key technological parameter for which impressive improvements have been
realized. Leadacid batteries, which were used for BEVs
in the past and which are still applied as cheap starter
batteries in current ICE-driven vehicles, often offer low
energy densities and specific energy of approximately
100 Wh L1 or 30 Wh kg1. Switching to lithium-ion
batteries offered the possibility to increase energy
densities significantly. Improving energy density of the
storage system is essential in order to make batteries in
combination with an electrical motor an attractive

Batteries and Fuel Cells | Techno-Economic Assessments

Power-to-weight ratio of passenger cars (W kg1)

578

120
Gasoline passenger cars
100

Diesel passenger cars

Fuel cell passenger cars
R 2 = 0.88

80

60

R 2 = 0.91

40

R 2 = 0.93

20

0
1945

1955

1965

1975

1985

1995

2005

2015

Figure 13 Power-to-weight ratio over time for conventional gasoline- and diesel-driven passenger vehicles as well as fuel cell-driven
cars.

Specific cell energy density (Wh L1 or Wh kg1)

700
600

Specific volumetric energy density

S-Curve regression
Specific gravimetric energy density
S-Curve regression

500
400
300
200
100
0
1990

1995

2000

2005

2010

2015

Figure 14 Historic development of volumetric and specific energy for specific single high-energy lithium-ion cells. A mathematical
s-curve shape was fitted to the data points given.

propulsion system for passenger cars, while at the same

time ensuring satisfying driving ranges for potential
customers. That is why advancements regarding energy
density as a key technical parameter attracted and still
attract significant research attention.
Figure 14 shows that at the beginning of lithium-ion
battery research activities, volumetric energy density for
high-energy cells was at approximately 250 Wh L1 and
specific energy at approximately 100 Wh kg1. Within
the past 1015 years, these values could be doubled to
approximately 500 Wh L1 and 230 Wh kg1.
However, it is important to bear in mind that energy
densities of the entire battery package are significantly
lower than those of specific single cells, as there are
numerous auxiliary systems necessary in order to ensure
reliable functioning of the battery. Furthermore, when

compared to a conventional gasoline tank used within an

ICE vehicle (with approximately 6000 Wh L1 and
10 000 Wh kg1), energy densities of batteries still seem
very low even when taking into account lower energy
consumption of BEV and savings owing to abandonment
of some engine parts.
Cold Start Ability
Cold start ability of fuel cell stacks has improved remarkably over the years. For example, the fuel cell system used in Hondas 2007 passenger car model FCX
Clarity is able to start at temperatures as low as  30 1C.
It was only about 2 years earlier when first prototypes
being able to start at 0 1C were introduced by car
manufacturers. The target value set by the DOE for 2010

Batteries and Fuel Cells | Techno-Economic Assessments

is at  40 1C. This temperature will supposedly satisfy

the expectations of a majority of potential customers
worldwide. With respect to the significant progress
achieved within the past few years, reaching this target
seems reasonable, although regularly starting at low
temperatures might negatively affect long-term durability of the fuel cell systems, which is another important parameter for a successful market introduction of
fuel cell systems in passenger cars.
Durability and Recharging Time
To satisfy the needs of an average private customer, a
durability of approximately 5000 h of use or 240 000 km
of driving has to be ensured for both the fuel cell stack
and system. Current values achieved are at about 2000 h
or 100 000 km for the stack and 1000 h or 50 000 km for
the fuel cell system. Consequently, there is still a need for
a considerable improvement of long-term durability in
order to prevent having to change the fuel cell system
within the average lifetime of a passenger car.
Similarly, long-term durability of modern batteries,
expressed by cycle and calendar life, remains a challenging task. Target values set by the United States
Advanced Battery Consortium (USABC) regarding the
number of equivalent 80% depth of discharge (DoD)
cycles to be delivered by the battery over its lifetime are
at 10001500 for a full BEV and approximately 2400
3500 for plug-in hybrid electric vehicles (PHEVs).
Further improvements to ensure acceptance of BEV
in the market have to include shortening recharging
times as this is currently a hurdle seen by many customers who are used to refueling times of 25 min for
conventional ICE-driven vehicles. There are electrode
materials for lithium-ion batteries that have promising
properties regarding recharging times but currently are
facing other disadvantages, like for example inferior
safety performance.
Efficiency
Maximum efficiency (tank-to-wheel) of a modern diesel
engine for passenger cars is at about 40%, whereas
maximum efficiency of the fuel cell system used in the
Daimler Necar 4 vehicle in 1999 was at 50% and almost
at 60% for the F-Cell vehicle presented in 2002.
More important than maximum values is the overall
result during a typical customer driving cycle. Looking at
a fuel cell system including an electric motor, the system
reaches an efficiency of 4550% for both low and high
load demand. The diesel engine is at about 1525% for
most of the time and reaches values of only 3040% for
high load demand.
This advantage concerning system efficiency is likely
to increase, even more as technological advancements

579

like a startstop system and software optimization are

going to further improve efficiency of the fuel cell system.
For an overall assessment, it is important to bear in
mind that producing the hydrogen fuel used to run a fuel
cell-driven vehicle commonly requires significantly more
energy than it does for producing conventional gasoline
or diesel fuel. When including this well-to-tank (WTT)
energy, overall efficiencies of fuel cell-driven and conventional ICE are much closer to each other, very much
depending on the pathway chosen to produce and supply
the different fuels.
Efficiency of a battery in combination with an electric
motor is considerably higher than for a conventional ICE
engine or even a fuel cellbattery hybrid system. This
makes the concept attractive from an energetic point of
view. Nevertheless, efficiency losses and energy needed
in the upstream chain for generation of energy have to be
taken into account. Overall attractiveness in view of energy consumption and emissions therefore depends very
much on the primary energy used to provide electricity.
Hydrogen Storage System
Between 1995 and 2001, many of the FCV models presented to public used other fuel storage systems than
compressed hydrogen. In 2000, for example, only half of
the newly presented models used compressed hydrogen,
whereas the rest used liquid hydrogen, methanol, gasoline, or a hydride storage system. From 2002, this situation changed and today nearly all models in the market
are powered by compressed hydrogen gas from a 350 or
700 bar storage system.
These systems reach energy densities and specific
energies of approximately 0.50.8 kWh L1 and 1.6
1.9 kWh kg1. This is significantly lower than the DOE
target values set for 2010 (1.5 kWh L1 and 2.0 kWh kg1)
and 2015 (2.7 kWh L1 and 3.0 kWh kg1). Furthermore,
conventional gasoline fuel storage systems typically
achieve values almost 10 times higher, therefore providing the same amount of energy while requiring significantly less volume and weight.
Other hydrogen storage systems, like metal hydrides,
promise higher energy densities for the future but are
still in an early research phase and far from mass
application.
From a potential customer point of view, most important parameters with regard to the energy storage
system are easy fueling and everyday usage, safety, and
maximum driving range. As the first two requirements
are already fulfilled by modern fuel cell-driven passenger
car prototypes and a maximum cruising range of 600 km
could also be realized using todays 700 bar compressed
hydrogen storage systems, there seems to be no major
hurdle for a mass market introduction. Nevertheless, in a
long-term perspective, research activities are necessary in

580

Batteries and Fuel Cells | Techno-Economic Assessments

order to further improve energy storage systems by increasing energy densities.

Cost Assessment
Once fundamental technical hurdles have been overcome, the most important parameter for market success
of a new technology is cost. In order to be competitive,
costs have to be at least almost as low as for established
technologies already available in the market.
Focus of the next paragraphs will be on the production costs of the technology itself, from the perspective of a manufacturer. The concept of total cost of
ownership (TCO), including other major cost factors
from a customer point of view, will be discussed later on.
Learning Curves
Production costs for a new technology usually are very
high at the beginning of a technology life cycle. Only few
prototypes exist, being assembled manually using raw
materials and preliminary products, which can be
ordered only at high prices owing to low volumes.
As production increases, production costs tend to
decrease. One reason is advantages caused by the higher
production volume itself (economies of scale), for example when ordering raw materials or preliminary
products. Another reason is improvements of production
techniques (learning by doing), for instance by using
special assembly lines for the new product. Furthermore,
scientific advancements with regard to product attributes
(learning by searching), for example requiring lower
amounts of expensive materials, help to decrease production costs. These effects are usually summarized
under the term learning or experience curve.
Historically, learning curves were used to describe the
reduction in man-hours or costs per unit of a product
manufactured by an individual company. One of the first
to analyze this effect in detail was Henry Ford for its
Model T being produced between 1910 and 1921. Today,
the concept of learning curves is not only used for individual companies, but also as a trend analysis tool for
the entire product groups produced on a global scale.
Numerous studies have been carried out in order to
determine learning curve rates for all kinds of products.
It was found that the average learning curve rate is at
approximately 85%. This means that whenever the cumulative production volume doubles, the overall production costs are reduced by 10085% 15%.
However, major differences between commodities and
sectors exist. For more mature products, for example
from the area of mechanical engineering, rates from 85 to
95% were found, whereas less mature products, for instance from the sector of electrical and electronic engineering, often showed learning curve rates at around

6080%. It was furthermore suggested that cost reduction depends on the size of a product, as costs of small
modular products usually decrease faster than production
costs of large nonmodular elements.
Generally, deriving an overall learning curve rate is
more difficult for complex products consisting of a
number of different part groups. For example, for passenger cars, no reduction of the overall production costs
and sales prices could be found for the past few years.
Even as many of the parts used in a car did experience
cost reduction owing to improved effectiveness of production methods, these cost reductions were compensated by adaptations in other areas, for example materials
ensuring a higher safety for the passengers or exhaust
after treatment systems for meeting stricter air quality
regulations.
When analyzing historical cost development for
technical products, it can be a problem that often only
sales prices are known rather than production costs for
the manufacturer. Yet, it was shown that although there
might be differences between cost and price development
during certain time periods, in the long run development
of sales prices is a good indicator for changes of costs for
the manufacturer.
Top-Down Cost Assessment Approach
If production costs of fuel cell stacks and batteries for
todays low production volumes are known, this information can be used together with learning curve factors
from the literature to derive future costs at higher production volumes.
For a more precise result, this can be carried out
separately for individual parts of a fuel cell system or a
battery. For example, costs for the membrane in a fuel
cell stack today could be combined with a typical
learning curve rate known from chemical industry
products in order to estimate a future decrease of production costs. On the contrary, values for an air compressor of a fuel cell system could be derived using a
more conservative learning curve rate from the segment
of mechanical engineering.
Nevertheless, this approach is classified as a top-down
type of method as it does not analyze any specific step of
production in great detail. To account for uncertainties,
calculations can be carried out using several different
learning curve factors to reveal possible variations in the
results. For an assessment of future production costs of
PEMFC stacks, this type of approach has been used for
example by H. Tsuchiya and coworkers.
Bottom-Up Cost Assessment Approach
Another methodology to assess future production costs
for fuel cells and batteries relies on analyzing every necessary step of production in detail and making

Batteries and Fuel Cells | Techno-Economic Assessments

assumptions about the technical outline, for example in

terms of web-speed of a future mass production line for
producing high volumes. Experiences gained during mass
production of established technologies are used to derive
and validate any of these assumptions.
This technique is classified as a bottom-up approach
as it analyzes specific steps of production in detail and
finally aggregates them to find out about the overall
production costs of the entire fuel cell system or battery.
In practice, it is applied regularly by E. J. Carlson and
coworkers to estimate costs for mass production of
PEMFC stacks on behalf of the DOE.
Combination of Top-Down and Bottom-Up Cost
Assessment Approach
A combination of both methodologies can be chosen by
complementing a pure learning curve approach using a
bottom-up assessment focusing more on technological
attributes.
Combining bottom-up production cost estimates for a
mass production volume, for example for a cumulative
number of one million fuel cell systems for passenger
cars, with known values for low production volumes leads
to a learning curve factor necessary in order to achieve
such a decrease in costs. This rate can be compared to
average learning curve factors in the literature to further
validate and critically discuss the result.
In any case, findings should be verified using an analysis of technological parameters to detect technical
hurdles that might exist with regard to future production
cost reductions.
Influence of Raw Materials
For any assessment of future production costs for fuel
cells and batteries, it is important to realize that with
evolving production techniques the importance of raw
material prices strongly increases compared to the costs
for the production effort itself.
In low-temperature PEMFCs, to accelerate the
chemical reaction of hydrogen and oxygen in the cell, a
catalyst material is needed. The materials commonly
used are platinum and to a lesser extent ruthenium and
iridium. The PEMFC stack used during NASA Gemini
mission had a platinum loading of approximately
28 mg cm2 per electrode. Current loadings are approximately 0.35 mg cm2 and are to be reduced to
0.1 mg cm2 in 2015 according to DOE target values.
Nevertheless, even if these reductions in platinum
loading would be realized, the proportion of platinum
price compared to the overall production costs of the fuel
cell stack would increase from approximately 10 to 50%
as cost reduction of other parts would occur faster.
Under these circumstances, an assessment of future
costs is strongly dependent on market prices of certain

581

raw materials. Therefore, in some cases, it is necessary to

analyze supply and demand structures as well as longterm reserves in order to make profound assumptions on
the future development of relevant raw material prices.
Uncertainties can be accounted for by using statistical
tools like Monte-Carlo analysis, which allow for complex
calculations while incorporating uncertainties for a
number of variables.
Discussion of Results
Figure 15 shows the result of a cost assessment for
PEMFC stacks for passenger vehicles. An average
learning curve rate of approximately 74% has been derived using a combination of top-down and bottom-up
cost assessment, carried out individually for different
component assemblies of the stack. Platinum price has
been kept constant at 20 000 $ kg1, which is lower than
todays level but was regarded as being reasonable when
looking at historical price development of the noble
metal and current supply and demand structures. Uncertainties in future material weights, raw material prices,
and learning curve rates have been accounted for using
Monte-Carlo analysis.
According to the assessment, an automotive PEMFC
stack would have cost approximately 1300 $ kW1 in
1990 and production costs could be reduced to approximately 1240 $ kW1 for 1 million and 620 $ kW1
for 10 million vehicles cumulatively produced.
For lithium-ion batteries, several bottom-up analyses
focusing on costs for materials and production processes
at medium and high volumes have been carried out
lately. Figure 16 summarizes the results for a high-energy battery pack for small BEVs (approximately
30 kWh). When connecting the data points, a necessary
learning curve rate of approximately 88% is found.
Production costs for a battery pack at 1 million vehicles
produced cumulatively would then be at approximately
200 $ kWh1.
Development of costs for vehicle batteries depends
very much on the energy content of the batteries produced, as these vary between approximately 2 and
40 kWh for a hybrid vehicle and a full-range BEV. Furthermore, specific production costs for the battery pack
generally tend to be higher for batteries with less energy
content per cell. This is due to balance-of-plant cost
factors, such as the battery management system, hardware, and enclosure, contributing an increasing percentage of costs as battery size decreases.
In comparison to production cost estimates for fuel
cell stacks, it can be noticed that the overall cost reduction potential for lithium-ion batteries seems to be
smaller, decreasing by approximately 70% from 1000 to
1 million units produced, whereas for fuel cell stacks a
reduction potential of more than 90% is estimated.

582

Batteries and Fuel Cells | Techno-Economic Assessments

Production costs for FC stack ($kW1)

1000
Average
90% Minimum
90% Maximum
Tsuchiya, (worst)
100

Tsuchiya, 2004
DTI, 2003
Carlson, 2005

DOE target 2010

Tsuchiya, (best)

10
DOE target 2015

1
0

1 000 000

2 000 000

3 000 000

4 000 000

5 000 000

Produced number of FC vehicles (cumulative)

Figure 15 Cost estimates for fuel cell stack production at high production volumes. Market price for crude platinum was assumed to
be fixed at 20 000 $ kg1. Target values set for the future by the US Department of Energy have been included. FC, fuel cell; DOE, US
Department of Energy.

1500
Average 88% learning curve

Bosch, 2008

Costs of battery pack ($kW1)

1250

1000

750

Argonne, 2000
CARB, 2007

500

CARB, 2007

DLR, 2007

250

Argonne, 2000
DLR, 2007

0
0

250 000

500 000

750 000

1 000 000

Produced number of small BEV (cumulative)

Figure 16 Production cost estimate for lithium-ion batteries at medium and high production volumes of small battery electric vehicles
(BEVs).

Integrated Modeling

Competition and Interdependencies

Evaluation of an innovative technology alone might result in misleading conclusions, as it is essential to know
about any competing technologies, whether they are established conventional ones or innovative new ones, and
about their possible advancements in the future. Furthermore, usually there are a variety of external parameters that may have a significant influence on future
competitiveness of the technology and therefore should
also be incorporated in any analysis.

To assess the competitiveness of fuel cells and batteries

for application in passenger cars, it is not enough to just
know about the technological and economic outlook for
each technology individually. In fact, it is important to
further analyze established technologies, like conventional gasoline vehicles, and to assess how these
technologies could possibly develop in the future. An
example would be fuel consumption measures or necessary emission reduction technologies, which could

Batteries and Fuel Cells | Techno-Economic Assessments

make conventional technologies look more attractive for

potential customers, while at the same time also making
them more expensive.
Moreover, fuel cells and batteries themselves could be
seen as supplementary technologies when used in a hybrid vehicle, or as competitive technologies when used in
FCVs or pure battery-driven vehicles. Therefore, it is
necessary to know about the technical and economic
outlook for both technologies at the same time, in order
to be able to derive profound future technology diffusion
scenarios.
Finally, it is essential to keep an eye on any developments regarding market prices for relevant raw materials, like for example crude oil or platinum, as well as
fiscal and infrastructural trends, as these could considerably affect future prospects for technologies.

Computerized Modeling Approach

An integrated computerized modeling approach can help
to analyze such a complex system using different scenarios for future developments. For a conclusive analysis
of potential future propulsion concepts for passenger
vehicles, the model could include information regarding
the following parameters for new technologies as well as
competing conventional technologies over a specific
period of time:
total cost of ownership (TCO) (calculated using
technology
market price, energy consumption, fuel or

energy costs, taxes, etc.);

availability and prices of important raw materials and
their influence on technologies and fuels or energy
costs;
infrastructure status and likely future development
(for example density of gas station network); and
customer behavior (for example annual mileage driven) and expectations (for example desired maximum
driving range).

When designing such a model, there is a considerable

range regarding the level of detail it could possibly cover.
For instance, energy prices could be modeled simply as
one general energy price externally set, or as a complex
relationship between supply and demand, influencing
energy prices and differentiating between different types
of energy and their specific production pathways.

Customer Behavior
Assuming a rather rational and mostly economically
based behavior of customers when choosing a certain
type of propulsion concept for their vehicle allows for
representing the process of decision by using a mathematical analysis tool. Basic idea of such a model would

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be the hypothesis that once a customer has decided for a

certain size and brand of a car and once all basic requirements (e.g., maximum driving range, density of gas
station network, and maximum power output) are satisfied, the purchase decision is mainly based on TCO over
a certain period of time.
This simplification certainly does not come true for all
customers at all times, as it neglects influences like advertising. However, it allows reproducing a system very
complex in reality using a somewhat simpler theoretical
mathematical model and thus enabling further detailed
analysis of the problem.
Scenario Analysis
Once a model has been set up and a baseline scenario has
been defined, effects of individual parameters can be
analyzed using different scenarios. For example, it can be
shown how changes in raw material prices could influence the evolvement of a new technology.
Furthermore, it is possible to derive conclusions regarding potential actions from politics (e.g., by lowering
taxes for a new technology or for the energy needed to
run it) and regarding the overall costs for the manufacturers, which might have to take into account negative
sales margins at the beginning of a market introduction
phase of a new technology.

Conclusion
Even the most sophisticated method does not allow for a
definite prognosis of the future. Yet it is possible to develop a set of supposable scenarios for future developments and to discuss any outcome and possibly necessary
actions using a set of methods for techno-economic
assessment.
Fuel Cells
The assessment of technological parameters indicated
that for fuel cells impressive advancements have been
achieved within the past few years. Many key parameters
already satisfy customer requirements or are close to
doing so. Others are still challenging for engineers, even
as analysis of patents, batteries, and R&D activities has
shown that further developments are to be expected.
Fuel cells as an application in passenger cars do have
the potential for reaching a significant market share in
the future, especially for purposes where pure battery
electric-driven cars do not offer a sufficient driving range.
However, production costs of fuel cell systems will have
to decrease considerably in order to be competitive
compared to conventional propulsion systems. As cost

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Batteries and Fuel Cells | Techno-Economic Assessments

assessment has shown, a major cost reduction appears to

be realistic for mass production volumes.
Other major effects also influencing market introduction of FCVs include the establishment of a fueling
infrastructure, raw material price developments, and
policy measures, like for example temporary tax exemptions. Furthermore, it is important to bear in mind
that competing conventional technologies like gasoline
and diesel propulsion systems continue to develop and
improve their properties. An integrated modeling approach is best suited for taking into account these effects
when assessing possible future developments.
Batteries
Technological assessment of batteries has demonstrated
that recently significant technical improvements have
been realized, especially by using new lithium-based
materials for electrodes. Patent and R&D activity analysis
has proved that today majority of developments in this
sector is from lithium-based battery types.
For a mass market introduction of the technology as a
propulsion system for passenger cars, there are still
several hurdles to overcome, particularly with regard to
energy density, durability, and safety of the cells. There is
a significant potential for decreasing production costs as a
combination of top-down and bottom-up cost assessment
has shown.
In urban areas, battery-driven vehicles might gain
significant market shares in the future. Yet, there is a
strong competition to be expected with regard to conventional technologies as well as fuel cell-driven vehicles.
Derivative technologies like plug-in hybrid BEVs might
provide a transition way toward electrified and later on
fuel celldriven cars.
Techno-Economic Assessment Approach
It is important to realize the limits of a techno-economic
assessment approach.
It is not possible to consider and analyze completely
new technologies that have not been identified yet. In
spite of this, by analyzing past development and scientific
limits of technological key parameters, the likeliness of a
sudden technological breakthrough can be estimated.
Furthermore, unexpected shocks like raw material
price explosions owing to political crises cannot be predicted. Nevertheless, it is possible to take into account
such developments using a set of different scenarios, also
including extreme variants.
In summary, the process of techno-economic assessments of new technologies offers a profound method for
reviewing and comparing different technologies in detail
as objectively as possible, taking into consideration the
complexity of reality.

Nomenclature
Abbreviations and Acronyms
AFC
BEV
CARB
DLR
DMFC
DoD
DOE
FC
FCV
GDP
ICE
IPC
PEMFC
PHEV
TCO
USABC
WTT

alkaline fuel cell

battery electric vehicle
California Air Resource Board
German Aerospace Center
direct methanol fuel cell
depth of discharge
US Department of Energy
fuel cell
fuel cell vehicle
gross domestic product
internal combustion engine
International Patent Classification
proton-exchange membrane fuel cell
plug-in hybrid electric vehicle
total cost of ownership
United States Advanced Battery
Consortium
well-to-tank

See also: Applications Transportation: Buses: Fuel

Cells; Electric Vehicle: Batteries; Electric Vehicles: Fuel
Cells; Hybrid Electric Vehicles: Batteries; Hybrid Electric
Vehicles: Overview; Light Traction: Fuel Cells; Energy:
Energy Storage; Hydrogen Economy; Fuel Cells
Overview: Introduction; History: Fuel Cells; Primary
Batteries; Secondary Batteries; Primary Batteries:
Overview; Secondary Batteries Lithium
Rechargeable Systems Lithium-Ion: Overview;
Secondary Batteries Lithium Rechargeable
Systems: Lithium Polymer Batteries; Secondary
Batteries: Overview.

Further Reading
Archibugi D (1992) Patenting as an indicator of
technological innovation: A review. Science and Policy 19(6):
357--368.
Carlson EJ, Kopf P, Sinha J, Sriramulu S, and Yang Y (2005) Cost
Analysis of PEM Fuel Cell Systems for Transportation. Cambridge:
National Renewable Energy Laboratory.
Chakrabarti AK (1989) Technology indicators: Conceptual issues and
measurement problems. Journal of Engineering and Technology
Management 6(2): 99--116.
Foster RN (1986) Innovation: The Attackers Advantage. New York:
Summit Books.
Foussier P (2006) From Product Description to Cost: A
Practical Approach. Volume 1: The Parametric Approach. London:
Springer.
Ghemawat P (1985) Building strategy on the experience curve. Harvard
Business Review March-April: 143149.
Griliches Z (1990) Patent statistics as economic indicators: A survey.
Journal of Economic Literature 12: 1661--1707.

Batteries and Fuel Cells | Techno-Economic Assessments

Haupt R, Kloyer M, and Lange M (2007) Patent indicators for the

technology life cycle development. Journal of Research Policy 36(3):
387398.
Mock P and Schmid SA (2009) Fuel cells for automotive powertrains a
techno-economic assessment. Journal of Power Sources 190(1):
133140.
van Raan AFJ (1988) Handbook of Quantitative Studies of Science and
Technology. Amsterdam: Elsevier Science Publishers B.V.

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Tsuchiya H and Kobayashi O (2004) Mass production cost of PEM fuel

cell by learning curve. International Journal of Hydrogen Energy 29:
985--990.
Twiss BC (1992) Forecasting for Technologists and Engineers: A Practical
Guide for Better Decisions, IEE Management of Technology Series 15.
Stevenage: Peter Peregrinus.