Toyota Serious About Fuel Cells; Debuts FCV Concept At Las Vegas

by Trefis Team
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In line with the rising interest in alternative fuel cars, Toyota Motors (NYSE:TM) announced its plan of launching a hydrogen fuel cell car in the U.S. by 2015. The concept car was showcased at the ongoing Consumer Electronics Show (CES) in Las Vegas. The vehicle, known as FCV Concept, has a driving range of more than 300 miles and accelerates from 0 to 60 mph in about 10 seconds. [1]

We have a $123 price estimate for Toyota, which is slightly above the current market price.

Refueling this car will only take three to five minutes, significantly lower than that for electric cars, for which it can take several hours to charge. The byproduct of a hydrogen car vehicle is water, making it highly appealing to customers who are sensitive about climate change and pollution. From the point of view of a user, the package comes across as extremely attractive – a good driving range, less time required to refill and no pollution. If Toyota can get its pricing right, the car can be a huge success. The automaker has not yet announced the pricing of the vehicle, but word on the street is that the car should start from $50,000.

As is the case with any innovation, there will be critics who will question the performance and the feasibility of the alternative fuel car, but Toyota is not new to this scenario. When Toyota was about to launch the Prius in 1997, few believed that the vehicle would continue to gain popularity more than 15 years after its debut.

Opponents of fuel cell technology argue that that these cars merely shift the emissions from roads to the power plants since hydrogen fuel needs to be produced from natural gas. This in turn, results in a greater usage of fossil fuels and defeats the very purpose of the car i.e. lower the pollution and the use of natural resources. However, Toyota contends that is looking at methane released from trash dumps and waste treatment plants to produce the fuel.

Supporting Infrastructure Needed To Push Sales

In addition, Toyota is also working on the infrastructure required to support sales of fuel cell vehicles. It is setting up hydrogen refueling stations and is also in talks with dealers who might be willing to put hydrogen pumps at their respective showrooms. Governments are already doing their share to encourage the consumption of alternative fuel cars. For example, California has pledged $200 million to build 20 new hydrogen stations by 2015 and 100 by the decade end. According to Businessweek, only 68 such stations might be required to cover most drivers in the state of California. [2]

As was the case with Tesla, California will be most important market during the initial period. California state laws require automakers to have ~22% of the total vehicles sold by 2025 as ‘zero emission’ or plug-in hybrids, failing which the automakers will have to buy zero emission vehicle (ZEV) credits to make up for the deficit. [3] This will only add to the costs of the manufacturers.

Other Car Companies Also Looking At Fuel Cell Cars

Till very recently, there were doubts whether alternative fuel cars would ever become mainstream. But as more and more automakers gear up to launch new vehicles, alternative vehicles becoming mainstream looks like an increasing possibility. The year 2013 was a turning point as huge interest in Tesla’s vehicles meant that automakers could no longer look to ignore this segment.

Besides Toyota, Honda will also step up its fuel cell game by introducing the FCEV vehicle by 2015. Its current model FCX Clarity was made available to a very limited number of people in Southern California. According to the company, there are only 24 drivers of the FCX Clarity. In addition, Hyundai also has plans of selling 1,000 fuel cell cars by 2015. [4] This segment is surely gaining prominence. We’ll be keeping an eye on how this new market pans out.

See our complete analysis for Toyota Motors here

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  1. Toyota Fuel Cell Electric Vehicle on Sale in 2015, Debuted at CES 2014, January 7, 2014, []
  2. Toyota Sees Hydrogen Car Fill-Ups at Dealers to Trash Dumps, January 7, 2013 []
  3. Has the fuel cell car’s time finally come?, August 15, 2013, []
  4. Slideshow: Honda Plans Fuel Cell Vehicle for 2015, December 13, 2013, []
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