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 Toyota, the world's biggest carmaker, unveiled its first mass-market
fuel-cell car on Wednesday, which is due to go on sale in Japan by
end-March next year priced at around 7 million yen ($68,600). A U.S.
and European launch will follow in the summer.Prime Minister Shinzo
Abe's growth strategy, announced the day before, also included a
call for subsidies and tax breaks for buyers of fuel-cell vehicles,
relaxed curbs on hydrogen fuel stations and other steps under a road
map to promote hydrogen energy.
That will bolster plans by Toyota and Honda Motor Co, Japan's No.3,
to start fuel-cell vehicle sales in 2015.
"This is the start of a long challenge to make hydrogen a standard
feature in society and to make the fuel-cell vehicle an ordinary
automobile," Toyota Executive Vice-President Mitsuhisa Kato told a
news conference.
With two of Japan's three biggest automakers going all in on fuel
cells, the country's long-term future as an automotive powerhouse
could now hinge largely on the success of what they hope will be a
key technology of the next few decades.
The auto sector carries special significance in Japan, providing
nearly one in 11 jobs and about one-fifth of its manufacturing
output. It is also one of the few big industries where Japan remains
at the pinnacle of global competition after losing much of its edge
in electronics and elsewhere.
Japan's ruling party is pushing for ample subsidies and tax breaks
for consumers to bring the cost of a fuel-cell car down to about
$20,000 by 2025. The government is also aiming to create 100
hydrogen fuel stations by end-March 2016 in urban areas where the
vehicles will be launched initially.
"To stay globally competitive, Japan cannot afford to lag behind in
this area," said Yuriko Koike, a former environment minister who
heads a group of ruling party lawmakers advocating hydrogen energy.
LONG HAUL
A fuel cell vehicle, running on electricity from cells that combine
hydrogen with oxygen, emits only water vapor and heat. Hydrogen fuel
production from hydrocarbons emits some carbon dioxide, although
Japan hopes to implement carbon-free production by 2040.
Hydrogen vehicles can run five times longer than battery-operated
electric cars, and their tanks can be filled in just a few minutes
compared with recharging times from 30 minutes up to several hours
for electric cars.
The challenges for fuel cell cars nevertheless remain daunting and
growth could be slow, especially given the expense of building up an
infrastructure of hydrogen fuel stations and the likely reliance on
subsidies until costs come down.
"Even after 10 years, fuel cell cars are likely to be less than 10
percent of the Japanese market," said Ryuichiro Inoue, a professor
at Tokyo City University and an expert in the auto industry.
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"This isn't a strategy to talk about for the next 10 years, but for
the next 20 to 30 years."
Even Toyota only expects tens of thousands of fuel-cell cars to be
sold annually a decade from now as the new technology will need time
to gain traction.
The government's commitment to hydrogen vehicles in its growth
strategy, however, shows how far the technology has come since
Toyota and Honda began leasing fuel cell-powered cars in Japan 12
years ago. Japan had set out bold predictions, later abandoned as
unrealistic, of putting 5 million fuel cell cars on the road by
2020.
Engineers have since overcome a variety of technological challenges,
including cold-weather ignition glitches due to water freezing and
the need to reduce loadings of platinum - the precious metal that
fuel cells use as a catalyst.
Rivals such as South Korea's Hyundai Motor Co and Daimler AG are
also producing fuel-cell vehicles, but Japan believes it will have
an advantage after the UN adopted many of its proposals for global
fuel-cell safety standards last June. This means it can avoid major
changes to fuel cell specifications for exports, keeping costs low.
Toyota, which astounded rivals 17 years ago by developing the Prius
hybrid car in barely two years and then swallowed initial losses to
establish its dominance in the segment, is confident of its
prospects in fuel cells.
"When we first introduced the Prius, there was little way we could
make a profit and our vision was longer-term, for the second- and
third-generation models," Toyota managing officer Satoshi Ogiso told
Reuters in March.
"Unless you are willing to accept losses initially, it's not
possible to increase sales."
(Editing by Edmund Klamann and Rachel Armstrong)
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