My first blog post when I joined Pike Research 2 years ago was about fuel cell forklifts. Not the sexiest of topics, I know, but over the past 12 months there’s been a major uptick of interest in alternatives to conventional lead-acid batteries, which include not only fuel cells but also advanced batteries. Lead-acid batteries are well entrenched in the forklift market and provide operators with zero emissions operations at low cost. However, they have a number of drawbacks, the most notable of which is the length of time needed for recharging and cool down. This process can take 16 hours and requires significant space set aside for the batteries to sit during this time. Many forklift operators have been eagerly waiting for a viable alternative to appear for years. From the technology provider perspective, fuel cell advocates have looked to this market as an early win for fuel cells, while advanced battery and fast charging companies see it as an opportunity to expand into new markets. So, where are we on displacing the lead-acid battery as king of electric forklifts?
The good news is, shipments of fuel cell forklifts have grown over the past 2 years, nearly doubling since 2010, albeit from a very low baseline. Fuel cells now capture around 1% of annual electric forklift sales in the United States. That’s respectable for a new technology that’s still in its first few years of commercial availability. Some of this growth, however, was funded by the 2009 American Recovery and Revinvestment Act, and it appears that demand has slowed in 2012.
Now, for the bad news. The fuel cell forklift business is still far too dependent on a single supplier, Plug Power. I remain concerned, as I was 2 years ago, that this poses a risk to the application’s long-term success. We also have not yet seen success in forklifts lead to the same type of fuel cells transferring to similar applications, such as ground support equipment for aircraft. That said, fuel cells have proven that they can provide a good return on investment (even at a cost of 2 to 3 times that of the batteries they replace) for very busy warehouse operations. In its 3Q 2012 financial results, Plug Power reported that its “new product platforms have a material cost that is now 60% of the product’s price” – a positive trend that must continue for fuel cells to be more competitive for forklifts and for other industrial applications.
As for lithium ion batteries, this technology faces some critical challenges in adapting to forklift vehicles, which have been designed and built around heavy lead-acid batteries. Nevertheless, the promise of this alternative to offer longer runtime and cycle life, as well as opportunity charging, will continue to attract both battery and charging equipment players to this market. Pike Research plans to explore the opportunities and challenges for advanced technologies in the materials handling market further in our Smart Transportation practice in 2013. I welcome conversations with folks working on forklifts and their batteries as we explore this sector further.
Tags: Alternative Fuel Vehicles, Electric Vehicles, Fuel Cells, Smart Transportation Practice
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