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Is Toyota's new hydrogen car about to 'change society'?

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Prime Minister Shinzo Abe takes Toyota's prototype fuel cell vehicle for a spin in Kitakyushu in July. The car uses hydrogen for fuel and emits no carbon dioxide.   © Kyodo

NAGOYA -- Increasingly stringent environmental regulations in major markets are spurring automakers to develop a new generation of green cars. Toyota Motor, which led the way in popularizing hybrids, is now positioning itself as the company that will bring hydrogen-fueled, zero-carbon-emission vehicles into the mainstream.

     Cars powered by that colorless, odorless gas are not exactly new. What is new is the not-quite-so-astronomical price tag of a model the Japanese company plans to release sometime in the current fiscal year through next March. Toyota's car will go for about 7 million yen ($67,500); a decade ago, hydrogen fuel cell vehicles were estimated to cost around 100 million yen.

     "We have finally developed a car that can change society," Toyota Chairman Takeshi Uchiyamada told Shinzo Abe in mid-July, when the prime minister visited a hydrogen fueling station in the western city of Kitakyushu.

     Abe's growth strategy calls for making hydrogen a major energy source for the country. Large quantities of the gas are produced here as a byproduct at steel and chemical plants.   

     "Instead of importing crude oil, we can invest to develop and expand hydrogen supply infrastructure," Uchiyamada suggested to Abe, branding the new car "a solution to energy problems."

     Abe drove Toyota's prototype himself for about two minutes. He also examined a mechanism in the car's rear section that disposes of water, which is produced as hydrogen generates electricity. "We will make an all-out effort to promote" fuel cell cars, the prime minister pledged. "We will offer at least 2 million yen (in subsidies) for each unit."

In-house development

Toyota managed to bring down the cost of the car by developing certain key components on its own.

     Honda Motor's fuel cell vehicle uses a hydrogen tank procured from a specialist supplier. Toyota made its own tank. The company found a unique way to wind up carbon fiber, creating a tank that is strong enough to withstand pressure up to 700 bar. 

     Toyota also found a way to reduce the amount of platinum used in the stack, the mechanism that generates electricity. The structure of Toyota's stack facilitates efficient chemical reaction, and the materials can be processed quickly to allow for mass production.

     So will Japanese drivers trade in their old cars en masse? Not anytime soon. Besides the price -- 7 million yen is still steep for the average driver -- the biggest obstacle for fuel cell vehicles is the lack of places to refuel. By the end of next March, Japan is expected to have only about 40 hydrogen stations.   

     Hydrogen is also expensive. It will not get cheaper "unless more uses, such as power generation, are developed," an official of an industrial gas producer said.

     Dealers interested in selling fuel cell cars will face an added 5 million yen expense for a device to check for hydrogen leaks.

Wide-open competition

Nevertheless, Toyota's new model does seem like a game changer.

     "I could not believe my ears when I heard Toyota was thinking about selling its fuel cell vehicle for 7 million yen," an executive of South Korea's Hyundai Motor group said.

     Hyundai has been selling a hydrogen version of its Tucson sport utility vehicle to municipalities, such as the Danish capital of Copenhagen, and other entities for the equivalent of roughly 15 million yen.

     Toyota's rivals, however, know there is a long way to go. "It must be difficult to secure profits at 7 million yen," the Hyundai executive said. "We don't feel we must concede defeat."

     The South Korean automaker has established a mass production line for its fuel cell car at a plant in the southern city of Ulsan. The company plans to kick off U.S. leasing this year, aiming to move 1,000 of the cars by 2015.

     A number of automakers -- Toyota included -- have also partnered up to advance fuel cell technology.

     Nissan Motor is working with Daimler of Germany and Ford Motor of the U.S. with a goal of launching a fuel cell car in 2017. "The three of us will develop the stack and fuel tank as well," a Nissan official said.

     Honda plans to start selling its own model next year, but it is also partaking in joint development with General Motors. Toyota, meanwhile, is developing parts with Germany's BMW. 

     "By teaming up, automakers will be able to use more common components and lower costs," said Satoshi Nagashima, a senior partner at German consultancy Roland Berger.

      Amid all these endeavors, automakers are still devoting resources to fuel-efficient gasoline cars and electric vehicles. It will take time to determine which technology offers the best mix of planet-friendliness and practicality.


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