Toyota bets the future car will be fuelled by hydrogen

Cost of building filling stations means infrastructure may be slow to develop
A Toyota worker checks a Mirai fuel-cell vehicle on the production line of the company's Motomachi plant

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Toyota showed off a special version of its new Mirai saloon this week to celebrate Back to the Future day.

The Japanese carmaker’s take on the time-travelling DeLorean from the popular movie series has the trademark gull-wing doors and the same, bare-metal bodywork seen in the Hollywood film.

But Toyota’s car is not fuelled by banana skins. This one runs on hydrogen.

Mirai — meaning “future” in Japanese — is Toyota’s fuel-cell vehicle, a hybrid car powered by two tanks of high-pressure hydrogen and an electric motor. For the world’s biggest carmaker by sales, this is no mere movie tie-in project. It is Toyota’s next big visionary bet.

Akio Toyoda, chief executive, has called the fuel-cell sedan a “new start”. The project is an important part of Toyota’s ambitious plan, announced last week, to virtually eliminate petrol and diesel engines from its fleet by 2050 — a drive that has taken on urgency across the industry following the Volkswagen emissions scandal.

The hydrogen car represents a key moment for a company that may be making record profits but is still recovering its poise after a global recall over unintended acceleration.

The move echoes Toyota’s big bet two decades ago on petrol-electric hybrids. The company launched the Prius in 1997 and has now sold 8m vehicles worldwide, turning Toyota into a leading green-car company.

The Prius sells at a price competitive with alternative technologies and requires no charging infrastructure, because the electric boost is provided by energy from regenerative braking.

“When we developed the hybrid, all we had to do was design a great car,” says Yoshikazu Tanaka, chief engineer of the Mirai.

With the £66,000 Mirai, however, “no matter how good a job Toyota does, Toyota alone cannot make this technology popular”, admits Mr Tanaka. “We really need to build an ecosystem.”

Fuel-cell cars — which are effectively hydrogen-electric hybrids — cannot be recharged at home, so drivers are reliant on public filling stations, which at the moment are rare. Hamburg, where Toyota launched the Mirai in Europe this month, has four. But that is the same number as in the entire UK.

Analysts at Goldman Sachs say hydrogen stations require upfront investment of $3.2m-$4m, versus about $800,000 for petrol stations, meaning infrastructure may be slow to develop.

“That’s not range anxiety. That’s range panic, because you just can’t use the car,” says Andy Palmer, the Aston Martin chief executive who oversaw development of the all-electric Leaf while at Nissan.

The cars are expensive, too, because of the costly fuel stack at the heart of the vehicles. The Mirai is priced the same as a BMW 7-Series, a luxury executive saloon. The Hyundai ix35, the first production fuel-cell car, is not much better at about £53,000.

As a result, doubters say fuel-cell vehicles are driven by government policy rather than consumer demand. It is unclear whether the loss-leading vehicles will ever be profitable without government assistance.

Analysts at Goldman Sachs estimate that fuel-cell cars will remain a niche proposition until at least 2025, when they will account for 0.5 per cent of global sales. IHS Automotive, a research group, predict conventional electric vehicles will be at 1.3 per cent by then.

First released in Japan in December last year, Toyota this month began handing over the Mirai to the early adopters, business leaders and public agencies in Europe that it hopes will spread the word and start building the ecosystem.

To foster the production of rival cars, the company released its fuel-cell patents in January, echoing a similar move by Tesla on electric vehicle patents.

Recent weeks have seen the likes of Porsche and Audi launch luxury challengers to Tesla’s electric cars, and many carmakers are also pushing into hydrogen technology.

“Car manufacturers are betting on red or black,” says Mr Palmer. “Almost everybody has hedged their bets.”

Hyundai’s fuel-cell car, the ix35, started production in 2013. Honda, which has been collaborating with General Motors, plans to release a competitor next year. A Nissan vehicle, jointly developed with Daimler and Ford, is expected in 2017.

Some analysts say the scandal at VW, which last month admitted cheating in US emissions tests of its diesel vehicles, will accelerate the shift towards hydrogen cars, whose only emission is water.

“Until ‘dieselgate’ . . . the very strong pull was from Asia,” says Henri Winand, chief executive of Intelligent Energy, a British fuel-cell technology specialist. “That has changed substantially over the past few weeks.”

Other benefits of the technology include a long range — the Mirai can do 550km on one fill-up, according to European laboratory tests — and rapid refuelling. It takes just three to five minutes. Electric recharging, on the other hand, takes hours and fights have already broken out at some stations in California. It “is like filling your petrol tank with a syringe”, says Mr Winand.

One hydrogen dispenser is capable of supporting 80,000km of travel a day, versus less than 6,000km for a quick-charge electric point, according to BMW.

Toyota believes the Mirai can achieve an overall carbon emissions reduction — including factory production — of 50-70 per cent versus conventional petrol and diesel models, depending on whether the hydrogen is produced from renewable sources such as wind and solar. Using green energy to power electrolysis allows the energy to be stored as hydrogen.

Not surprisingly, fuel-cell technology is appealing to governments. Germany, which has invested heavily in renewable energy in recent decades, plans to have 400 hydrogen filling stations across the country by 2023.

Heinrich Klingenberg from hySolutions, a Hamburg public-private partnership, says hydrogen will be a “game-changer”.

“As long as we’re talking about vehicles that are in interurban use, with a mileage of 50km, that’s all very fine and I can do it with battery [electric] vehicles,” he says. “But as long as it’s heavy duty or I want to do longer mileages, then I do believe we have to have a different type of power train.”

Toyota also sees fuel cells as just one form of propulsion that will be used in combination with other technologies — from large cars and trucks powered by hydrogen, through smaller hybrid and plug-in hybrid passenger cars, to electric city cars.

“It’s not really a question of which one to go for, one or the other,” says Mr Tanaka. “Toyota does not deny the idea of pure” electric vehicles.

“[But hydrogen] satisfies most of the requirements people would want for their first car,” he adds. “Although it takes time, we are all very committed to this technology.”

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