In a move that has dealt a blow to the struggling hydrogen car market, Shell has announced the closure of all seven of its light-duty hydrogen fueling stations in California, effective immediately. The decision comes after the company had initially revealed plans to build 48 new stations for light-duty vehicles in the state.

According to Hydrogen Insights, Shell had been operating seven out of the total 55 retail hydrogen stations in California. This recent development signifies a setback for the small hydrogen community, particularly considering that California is the only state where hydrogen fuel is widely available.

The closure of these stations follows Shell's discontinuation of its plan to build new fueling stations. It also comes at a time when the hydrogen car market is struggling to gain traction in the United States. Data from the Hydrogen Fuel Cell Partnership indicates that in 2023, only 2,968 hydrogen cars were sold in California, which represents a modest 10% increase from the previous year but is still lower than the 2021 sales figure of 3,341.

Shell's decision to close its hydrogen fueling stations is attributed to complications in hydrogen supply and other external market factors, according to Shell Hydrogen Vice President Andrew Beard. These supply issues have been disrupting stations since August 13, as reported by Hydrogen Insight.

Furthermore, the reliability of hydrogen stations has been a significant concern. Many stations suffer from serious reliability issues, leading to frequent maintenance and repairs. In a lawsuit filed by Japanese gas company Iwatani, one of the largest names in American hydrogen filling stations, it is alleged that the core technology provider of their stations did not adequately test the equipment in real-world scenarios, concealed defects, and misled the company.

The closure of Shell's fueling stations, coupled with supply complications and reliability problems in the industry, has further fueled uncertainty surrounding the future of hydrogen fuel-cell vehicles in the United States. The high cost of both the stations and the fuel itself has hindered widespread adoption. While hydrogen car manufacturers typically include a substantial amount of free fuel with vehicle purchases, once exhausted, consumers face exorbitant prices at stations that are often out of service, low on fuel, or plagued by long queues. Consequently, used hydrogen cars are currently available at significantly reduced prices, making them less appealing in the market.

Shell's close association with the fossil fuel industry was expected to provide a cost advantage in producing hydrogen, thereby incentivizing the development of robust fueling infrastructure. However, this expectation has not materialized, and even a major oil giant like Shell has decided against further investments in light-duty hydrogen infrastructure.

With Shell's withdrawal from the hydrogen fueling market, the prospects for hydrogen fuel-cell vehicles in the United States have become increasingly uncertain. The industry will need to address supply issues, improve station reliability, and make fueling more accessible and affordable in order to overcome these challenges and build a sustainable future for hydrogen-powered transportation.