How the Steyr plant is building BMW's fifth powertrain

Where V8 petrol engines have been assembled until now, BMW will produce the fuel cell system for the iX5 Hydrogen. At its Steyr plant in Austria, the carmaker is preparing series production of the third generation of its hydrogen drive system from 2028. Test benches are already in place, production equipment is being adapted and future manufacturing processes are being developed. At the same time, the next prototype phase is already under way.

For Steyr, the move from V8 engines to fuel cells is less radical than it may initially sound. The plant already produces a broad mix of powertrains, with petrol, diesel and electric drives manufactured in parallel. Around 4,700 employees produce more than 1.2 million drive systems per year. Series production of electric drives was added in summer 2025. The fuel cell now expands the site's technological range once again.

From development to series-production processes

BMW has reached a stage at which the fuel cell system must prove more than its technical performance. Test procedures have to be transferred into series production, processes need to be stabilised and the system validated under different operating conditions.

Teams in Steyr are adopting methods from BMW's Hydrogen Competence Centre in Munich and adapting them for industrial production. Employees are also being trained for the new processes. BMW is relying on the close interaction between development and production that is already established at the site for diesel and electric drives.

Josef Hochreiter, Head of Hydrogen Vehicles at BMW Group, says: “The current testing shows how successfully the fuel cell system, high-voltage battery and electric drive are already working together and how consistently we are developing the technology towards series production.”

Five powertrains increase production complexity

That flexibility will be particularly important for the next X5 generation. BMW plans to offer five powertrain variants within a single model line: petrol, diesel, plug-in hybrid, battery-electric and fuel cell.

For production, that means additional variants, parts, testing requirements and supply chains. BMW is therefore trying to limit the differences between the powertrains at vehicle architecture level. Standardised geometric specifications for energy storage systems and drive components are intended to make it possible to integrate different powertrains into the same production structure.

The approach is especially relevant for the hydrogen X5. Demand for the fuel-cell version remains difficult to predict. The more dedicated equipment and processes are required, the higher the volumes needed to make the investment viable. BMW is therefore seeking to industrialise the fuel cell system with as little additional production infrastructure as possible.

Why BMW is relying on short distances for the new 3 Series

With the new 3 Series, BMW is relying on a closely interlinked production cluster in Bavaria. The plants in Munich, Dingolfing, Landshut and Irlbach-Straßkirchen are pooling expertise, shortening transport routes and thus are intended to reduce the CO2 footprint.

Hydrogen tank designed around the vehicle platform

The hydrogen storage system follows the same principle. Instead of designing the vehicle around a small number of large pressure vessels, BMW uses a flat storage system consisting of seven interconnected 700-bar high-pressure tanks made of carbon-fibre-reinforced composite material. The tanks are mounted in a metal frame and controlled via a central main valve.

The system is designed to store at least seven kilograms of hydrogen. From a manufacturing perspective, however, the installation space is just as relevant. The flat tank layout uses a geometry compatible with BMW's new Gen6 high-voltage battery.

This is intended to allow the hydrogen version to be built within the same production structure as other X5 powertrains while also preserving interior space. BMW board member for development Joachim Post describes the concept as “installation space Tetris”.

Behind the phrase lies a central production challenge. The earlier a powertrain variant requires its own vehicle structure, the more expensive its industrialisation becomes. With the iX5 Hydrogen, BMW is therefore trying to keep the differences largely limited to the powertrain-specific components.

Up to 750 kilometres of range

BMW has also defined the main product targets. The new tank system is intended to provide a range of up to 750 kilometres and allow refuelling in less than five minutes. The vehicle remains under development, however, and final WLTP consumption figures are not yet available.

BMW does not position hydrogen as an alternative for every battery-electric customer. Hydrogen expert Jürgen Guldner told AUTOMOBIL PRODUKTION in 2025: “There are female and male customers for whom battery-electric mobility is not practical - for example because of long distances, charging infrastructure or usage behaviour.”

That positioning also matters for production planning. If the fuel-cell variant is aimed at specific use cases rather than a mass market, economical production at lower volumes becomes more important. Flexible manufacturing then means keeping fixed costs under control even when production numbers remain limited.

Demand will determine capacity utilisation

How large that market can become remains uncertain. In a 2026 automotive survey, only one per cent of 933 potential car buyers named hydrogen as their preferred powertrain for their next vehicle. Battery-electric vehicles reached 21 per cent. Such surveys are not sales forecasts, but they illustrate the market conditions under which BMW is preparing industrialisation.

Hydrogen compass 2026

Germany: small vehicle fleet, recently shrinking. As of 1 January 2026, according to the Federal Motor Transport Authority, 1,575 fuel cell passenger cars were registered - 12.6 % fewer than a year earlier. For comparison: the stock of battery-electric passenger cars reached around 2.03 million vehicles, an increase of 23.2 %. These figures describe the vehicle stock, not annual new registrations.

Europe: so far no broad sales ramp-up. The European market overview by the European Alternative Fuels Observatory from March 2026 shows: Sales of fuel cell passenger cars were more than 70 per cent below the peak level of 2022 in 2025. The analysis cites, among other things, the pending generational change for the Hyundai NEXO as an explanation for the low sales level in 2025.

Manufacturers: new models and preparation for series production. Hyundai started sales of the new NEXO generation in Germany in January 2026. BMW is planning the iX5 Hydrogen for 2028 as its first own hydrogen series model. In September 2026, BMW reported ongoing prototype tests and the preparation of fuel cell system production in Steyr. These steps demonstrate technical further development, but not yet broad market penetration.

Filling stations: conversion instead of nationwide passenger car expansion. H2 MOBILITY closed older filling stations in 2025, especially those designed for passenger cars, and is focusing investments more strongly on buses and commercial vehicles. As a reason, the operator cites, among other things, a passenger car market that has fallen short of expectations. New high-performance combined stations can continue to supply passenger cars as well.

Study: do not equate Europe’s hydrogen growth with passenger car growth. The Global Hydrogen Compass 2026 describes that renewable hydrogen will initially often be used in refineries for fuel production to fulfil European transport quotas. This demand must be distinguished from the direct use of hydrogen in fuel cell passenger cars; it does not demonstrate a corresponding increase in sales of hydrogen cars.

Further, detailed information: Global Hydrogen Compass 2026 - full study (PDF).

Source: industry report by the Hydrogen Council in collaboration with McKinsey & Company, September 2026.

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A dedicated factory would be difficult to justify at such volumes. Integrating an additional variant into an existing model line is a different calculation, provided the vehicle architecture and production system allow a high degree of commonality.

The same applies to suppliers. Fuel-cell systems require cooling components, valves, sensors, air supply systems and power electronics, while the tank system creates demand for expertise in composites and high-pressure technology. At initially limited volumes, investments must remain scalable. The ability to start with smaller capacities and expand them later therefore becomes more important than maximising output from the outset.

Production cannot solve the infrastructure issue

Efficient manufacturing, however, addresses only one part of the hydrogen equation. The vehicle also needs a reliable refuelling network.

At Memmingen Airport, a hydrogen filling station has been operating since April 2026. A five-megawatt electrolyser is planned to produce green hydrogen on site in future. The project combines mobility, logistics and energy supply and shows how regional hydrogen clusters could support market ramp-up before a nationwide passenger-car refuelling network is available.

For private customers, however, range and short refuelling times only become an advantage if stations are reliably accessible. Energy efficiency remains another challenge. According to Germany's Federal Environment Agency, a fuel-cell passenger car running on green hydrogen requires around two to three times as much electricity per kilometre as a comparable battery-electric vehicle.

BMW therefore has to do more than industrialise the technology. The iX5 Hydrogen also needs use cases in which range, refuelling speed and operational flexibility justify the additional energy demand.

Steyr becomes a test case for flexible powertrain production

BMW still has time to refine the concept before the planned market launch in 2028. For production planners, the decisive figures by then are likely to include the additional investment required, testing effort, the share of equipment that can be used across powertrains and the volumes at which the hydrogen variant becomes economically viable.

Steyr already provides a good illustration of the approach. A new production operation is being installed in an area previously used for V8 engines. Existing process expertise is being transferred to fuel-cell technology, while the vehicle itself is being designed so that a fifth powertrain does not require a fifth production system.

For an industry facing an increasingly uncertain powertrain mix, that may prove to be the more important lesson: not only choosing the right technology, but designing factories and vehicle architectures so that a wrong forecast does not become unnecessarily expensive.