GM, Shanghai Bus Set Fuel Cell Deal in Motion - I say So What?

The AP is reporting that a Chinese Fuel Cell partnership plan, reported in an earlier story this month, between GM and Shanghai Automotive, was finalized on Saturday. The plan calls for the creation of a hybrid bus demonstration vehicle to "showcase the benefits of fuel cell vehicles in real-life applications."

The agreement sets in motion a plan "to work on developing and commercializing hybrid and fuel-cell vehicles" in the world's fasting growing automobile market. Citing pollution and improved energy security the report noted, "Booming demand has turned China into the world's fastest-growing auto market, but the explosion in auto use has added to energy shortages and worsened already severe air pollution in many cities, including Shanghai."

"If we still go further in the traditional way, shortages of resources and environmental damage will only worsen," said Shanghai's vice mayor, Hu Yanzhao.

While this is a nice, little story for GM, the world's largest automaker still seems far behind in the future of world automotive technology.

For example, the report also noted that China is also working with Toyota to bring hybrid cars to China, following an agreement between the two to assemble Toyota's popular Prius hybrid car on the mainland.

Unlike GM, which is nowhere to be seen in the hybrid vehicle market, Toyota is on pace to produce millions of hybrid cars by the time GM's "demo trial" concludes. That means 100,000 "clean vehicles" available for China versus one bus? I wonder which will be more profitable?

Wow! Not only have American automakers underestimated the initial success of the hybrid model, they continue to underestimate the future demand for such vehicles.

While the fuel-celled vehicle is an excellent idea that must be advanced - it is at least a decade away from fruition. Aside from automotive aspects, significant infrastructure barriers still remain.

On the other hand, the hybrid car is a transition towards the age of fuel-cell powered vehicles, and is available today.

People are ready for a change, and the economies of scale will soon make hybrid cars a no brainer.

When you can purchase a more powerful, faster hybrid - at the same price as a standard car - while reducing your fuel bill by 50%, and helping fight terrorism, pollution and global warming, which car will you buy?