Clean-air car you can't use: California hydrogen vehicle owners can't find fuel

Sam D’Anna had barely signed the purchase agreement for his new $75,000 Toyota Mirai hydrogen car, a gunmetal gray sedan, on a scorching July day in 2022. He realized almost immediately that something was very wrong.

The fuel gauge showed just a tiny amount of hydrogen in the vehicle’s tank, and someone on the sales staff at Roseville Toyota, where he had purchased it, ran to tell him that the nearest fueling station, in Citrus Heights, was offline and therefore unavailable, D’Anna said.

The next-closest one was in West Sacramento, nearly 25 miles away, and the indicator said the vehicle could only go 22 miles.

“I’ve already signed,” he recalled thinking as he drove off the lot, the air conditioning turned off to save fuel. “This is bad.”

“My heart was dropping into my stomach.”

D’Anna, a medical device salesman who lives in South Natomas, has joined hundreds of California hydrogen car owners suing automakers and the state, saying they were misled about the availability of fuel and the reliability of equipment even as they shelled out big bucks to participate in a new technology that was supposed to help build a greener future.

Instead, these consumers are caught in an expensive trap, paying off years-long loans on hydrogen cars they can barely drive, as the marketplace of fueling stations contracts amid high costs and reliability concerns.

Their experience highlights the difficulty California faces as it attempts to mandate a carbon-free future for automobiles, and the dangers to consumers of pushing a new technology that may not be ready for prime time.

It also raises serious questions of who is responsible: Should automakers take the blame if the market for a less-polluting fuel has tanked? Should the state, for making it seem like a risky bet was safe? Or are the consumers themselves just stuck, like purchasers of the long-ago home video system Betamax, widely viewed as a better technology but ultimately overtaken by a different product known as VHS?

The Sacramento area is particularly hard-hit, after a decision by the oil company Shell in 2024 to pull out of the market for fueling hydrogen cars. That left the region with that one filling station in West Sacramento. The city of San Francisco has no hydrogen stations left, and just one is located along the stretch between the capital to Los Angeles. The number of fueling stations in Southern California has also decreased.

California's hydrogen fueling stations

Source: California Energy Commission data as of March 12

Experts and consumers alike say that even when more stations were open, the flow of hydrogen was notoriously slow, as equipment frequently stopped functioning and glitches in the system led to waits and hours-long fueling times.

“The crux of the matter is, can we reboot this and fix the problems and get it rolling again, or is it really over?” said Lewis Fulton, director of the Energy Futures Program at UC Davis.

Still paying

For D’Anna and others like him, the question is very personal. He has four more years to make payments of nearly $1,100 a month on his Toyota Mirai, which is sitting, unused, under a tarp at his father’s house in Rescue in El Dorado County.

To get around, D’Anna uses a Ford F-150 hybrid truck, which he bought in 2023 to replace the hydrogen car. He’s paying about $1,200 a month for it.

Ricky Yap, who lives in West Sacramento, bought his 2016 Toyota Mirai secondhand in 2020, also from Roseville Toyota. He’s also driving a gasoline car instead, and is a plaintiff in the same lawsuit against Toyota and a hydrogen fuel company, First Element, as D’Anna. That suit was filed in July in Los Angeles federal court. Yap is also part of another suit, filed last November in L.A. Superior Court against both Toyota and California Gov. Gavin Newsom.

Yap’s car wasn’t as expensive as D’Anna’s — used, it was just $16,000, with payments of about $300, he said. And the car — like most hydrogen vehicles sold in California — came with a gift card loaded with enough money to pay for $16,000 worth of fuel.

Finding fuel was a bit cumbersome and confusing but not so bad at first, Yap said. Then several trends hit at once. The Shell stations closed, leading to long lines at the single remaining station in the Sacramento area, run by a U.S. subsidiary of the Japanese hydrogen company Iwatani. The price of hydrogen tripled as subsidies dried up, increasing the price of filling his tank from about $70 to about $200. And the length of time filling up required, between equipment problems and waiting in line, was sometimes as long as four hours, he said.

Eventually, he stopped using it, canceling the insurance and registering it as a non-operational vehicle, Yap said.

“I used it very seldom just because of the fact I don’t like the stress,” Yap said. “I don’t want to pay insurance on a car that I can’t use every day.”

What went wrong?

All told, just under 18,000 hydrogen cars have been sold statewide since 2012, according to the California Energy Commission, representing all but a few hundred of the roughly 18,600 hydrogen vehicles sold nationwide. The vast majority — about 15,000 — were sold by Toyota, followed by Hyundai and Honda. All three automakers have dramatically curtailed hydrogen offerings in the U.S. over the past few years.

Compare that to the 2.1 million zero-emission electric and hybrid vehicles in the state, or the 35 million vehicles on California roads overall. Experts say that partly explains why the hydrogen market is struggling.

“Hydrogen is incredibly hard because you have to build a big enough system from production and distribution down to the stations before you can fuel one car,” said Bill Elrick, executive director of the Hydrogen Fuel Cell Partnership, a public-private partnership aimed at expanding the market for hydrogen-fueled vehicles. “You really have to build a system for thousands, tens of thousands of cars before it’s even viable for those first drivers.”

Currently, California has about 40 light-duty hydrogen stations. They fuel autos rather than trucks and buses, the California Energy Commission website shows. Of these, several are frequently down for repairs or maintenance each day. For example, on Feb. 19, a check by The Sacramento Bee showed that the West Sacramento station was down for part of the day, and when it came back up, the only one in the Tahoe area went down. Several were also down in the south state that Wednesday.

As stresses plagued the industry, state and federal policymakers have pivoted toward the use of hydrogen for buses and large trucks, and away from automobiles, leaving the owners of hydrogen cars with a dwindling number of suppliers for their fuel.

California, for example, initially allocated about $20 million annually to support hydrogen filling stations. Now, that number has dropped to $15 million, which is not limited to light-duty stations. The state energy commission’s Clean Transportation Program Overview cited its support of medium and heavy duty hydrogen stations, but did not mention automobiles.

Josh Newman, a former state senator from Orange County who was involved in the development of the state’s clean energy program and owns a Toyota Mirai, said lack of support from the state has exacerbated the industry’s woes.

“I blame the state,” Newman said. “We were supposed to have 200 stations up and running for light-duty hydrogen vehicles by 2025.”

Difficulties lead to litigation

The frustrations have led hundreds of plaintiffs to sue in numerous cases in both state and federal court .

Most name Toyota, while some name Hyundai and one also targets Newsom. Yet another was filed against the maker of the equipment used by many of the fueling stations.

The lawyers working on these cases are struggling to find an argument that captures the complexity of the situation, leading the cases to vary in their approach.

Some, including one filed in L.A. federal court that includes Sacramento-area clients, allege that the automakers misrepresented the availability and cost for hydrogen fuel.

Others take aim at the fuel tanks in the cars, saying they were faulty and didn’t fill up properly.

Attorney Jason Ingber, who represents D’Anna and Yap, is taking yet another approach, arguing in a class action suit in federal court that Toyota trapped consumers in an unworkable marketplace for fuel that it partly controlled.

Ingber is also suing Toyota, First Element, the public-private Hydrogen Fuel Cell Partnership and the state.

That lawsuit alleges that officials, including Newsom, misled consumers into thinking that the market was stable, and failed to prevent Toyota from taking advantage of consumers.

It lists story after story of consumers locked into payment plans on vehicles that they can’t or don’t use.

The value of the cars has dropped so precipitously that even if consumers sell or trade them in, they’re stuck with a huge balance on their loans, the lawsuit alleges. James Lane, another Sacramento-area plaintiff, is still making payments of almost $1,000 a month on a Toyota Mirai purchased in Roseville, even though the car was totaled in an accident, the lawsuit says.

Problems with equipment and parts

Yet another lawsuit focuses on equipment supplied by a Norwegian company, Nel Hydrogen, which contracted with Shell, Iwatani and others to design and build hydrogen fueling stations.

Iwatani sued Nel in federal court in 2024, saying that “essentially all of the information provided during the sales, marketing and contracting process, and in the specifications, was false.”

Problems with the company’s equipment led to delays in fueling stations coming online and led to millions of dollars in losses, Iwatani says in its complaint. As many as 85 valves made by the company failed at two south state stations, along with other equipment, leading them to be frequently inoperable, the complaint says .

Nel Hydrogen’s CEO, Hakon Volldal, has acknowledged some of the problems.

“Nel and also the hydrogen fueling industry is immature and needs to step up its efforts to improve the technology,” Volldal said in a 2023 quarterly call with investors. “We need to improve the performance of our equipment...”

But in response to questions from The Sacramento Bee, a top executive with Cavendish Hydrogen, a spinoff company created by Nel for its hydrogen fueling equipment business, said a poor market for hydrogen in California — not the company’s equipment — was to blame for the problems and delays.

“It is incorrect to claim that the equipment does not work,” Marcus Halland, Cavendish’s chief financial officer, said in an email. “The fundamental issue now lies with regional lack of hydrogen.”

Should automakers do more?

In statements to The Bee, both Toyota and Hyundai said the companies are aware that difficulty obtaining hydrogen fuel has upset their customers. Toyota said it stopped selling new Mirais in the Sacramento area just over a year ago.

“Toyota recognizes that certain Mirai customers in Northern California may experience refueling challenges due to the closure or unavailability of hydrogen stations and a possible resulting limited hydrogen supply in the region,” the company said in an emailed response to questions from The Bee. “We are working with affected Mirai customers to identify ways to help them on a case-by-case basis to address their concerns.”

One solution offered to Toyota purchasers is the option of using a rental car during periods when their hydrogen vehicle is unusable.

But consumers said that the process can be cumbersome.

Parita Shah, a physician assistant who lives in Sacramento County, said the rentals are difficult to use long-term. They expire every 25 days — so for the past year, she has had to return her rental and exchange it for a new one every few weeks, all the while making monthly payments of $326 on the Toyota Mirai she cannot use.

Shah bought her car just six months before all of the hydrogen stations near her home shut down. She said she asked Roseville Toyota to take it back. She was told that the $36,000 vehicle was only worth $2,000, a drop she attributes to the difficulties in the market.

Neither the dealership nor its parent company, Lithia Motors, responded to requests for comment.

Hyundai has also offered a 21-day car rental option to customers “for trips outside the refueling infrastructure,” its website shows.

In a statement to The Bee, the Korean carmaker expressed sympathy for consumers who have coped with hydrogen availability problems.

“Unfortunately, there have been shortages of hydrogen fuel for delivery to stations in Sacramento and the Bay Area, negatively affecting Nexo owners in the area,” Hyundai officials said in an email, referring to its hydrogen sedan. “Hyundai is aware of these refueling issues and continues to support hydrogen infrastructure development in California.”

Possible hydrogen leaks and the danger of fire in Nexos resulted in a recall of about 1,600 vehicles in the U.S. and Canada late last year. Owners were urged to park their cars outside, away from structures, until they were repaired.

Despite the troubles, hydrogen-powered cars still have their boosters, many of them environmentalists and policymakers who see the vehicles as a small but important subset of emission-free vehicles.

Newman, the former legislator, is still driving his Mirai, even though it takes him a little longer to find fuel.

Sacramento Municipal Utility District board President Gregg Fishman is generally happy with his Hyundai Nexo, although he conceded “fueling has been an adventure.”

His family will soon need to replace their second car, and if the hydrogen problem gets solved, Fishman said, he’d gladly buy another.

More likely though, he said, the family would purchase an all-electric car that they can plug in at home.

“Nobody’s going to buy a car that requires this fuel if the supply isn’t there, and nobody’s going to supply the fuel if the demand isn’t there,” Fishman said.