Targeting the electric and hybrid vehicles segment General Motors and Honda have jointly pledged $85 million as investment into plans for producing compact next generation hydrogen based fuel cell stack. The investment will materialize a production line at GM’s battery pack unit in Michigan. The GM plant is already under production; and the joint venture plans to start producing fuel cell systems in around three years from now. This joint venture targeting the zero emission utility would begin mass production by 2020.

The partnership between Honda and GM is quite strategic and would generate greater economies of scale. In addition advantage of Honda & GM being an economy class and with low maintenance cost and with availability of aftermarket parts would add to the tangible benefits of the partnership. They would jointly develop the fuel cell stack and then use them independently in their respective automobile assembly.

With lowered cost of production the partnership marks the arrival of next generation fuel cell ready to be deployed. These fuel cells are designed for plug and play system which includes the stack and all related components for cooling, gas, fluid and electrical. Fuel cell is a device that converts chemical potential energy into electrical energy.

The 50-50 % partnership between Honda and GM apart from reducing the overheads would also experience an increase in efficiency. The partnership is already outlining the successor series of fuel cell more compact and for longer hauls. There are some concerns regarding meeting the quality standards when mass producing the fuel cell. The quality, cost and durability will need attention when developing for long range.

The postmodern North American market exhibit higher rate of technology adoption; so the demand here would require local consolidation to meet the success. The demand here in North America would be higher than any other market geographies thus localizing production would lower the cost of assembly. But the limited refueling infrastructure has lowered the demand while low petrol prices have experienced a shift towards sport utility vehicles and pick-up trucks. However, the joint venture is likely to bring both GM and Honda in an absolute advantage situation.