Fuel Cell Cars On Sale by 2015

Development of fuel cell electric vehicles (FCEVs) is shifting into high gear, with manufacturers targeting sales to consumers in 2015. Major automakers in Japan, the United States and Europe are actively forming business alliances to reduce development costs. Installation of hydrogen fueling stations will also go into full swing starting this fiscal year.

The potential proliferation of FCEVs will likely hinge on the extent to which automakers can lower prices and improve supporting infrastructure. Toyota Motor Corp. Vice Chairman Takeshi Uchiyamada said at a press conference April 17 the company has high hopes for the vehicles.

“Fuel cell vehicles don’t emit harmful fumes and won’t be seriously limited by the distance they can travel or the time required for refueling,” he said. “They will eventually replace battery electric vehicles.”

Toyota plans to release midsize sedans featuring fuel cell technology in 2015 to the general public. The firm aims to sell 700 units annually the first few years after the models’ release. Honda Motor Co. also plans to launch its own FCEVs in the market the same year. Currently, fuel cell vehicles are only leased to a few government ministries and companies.

Fuel cell vehicles have lagged behind hybrids and battery electric vehicles (BEVs) mainly due to their high cost. When the first commercial models are released in 2015, Toyota will set prices from 5 million yen to 10 million yen per vehicle, on par with pricing for its luxury models. However, Managing Officer Satoshi Ogiso admitted, “We’re having a hard time cutting prices below 10 million yen.”

The company has tried making the central part of the fuel cell system smaller, reducing the number of hydrogen tanks inside the vehicle and other streamlining measures to cut costs. Toyota has also formed business alliances with other companies in the field in a bid to lower costs. In January, Toyota officially reached an agreement with Germany’s BMW for joint development of FCEVs, and has started exchange programs for the two companies’ engineers.

Toyota and BMW plan to release jointly developed FCEVs in 2020. Their strategy is to accelerate growth in the market by lowering prices, which will be made possible through mass production by both firms.

Just after the announcement of the Toyota-BMW partnership, Nissan Motor Co. announced it would embark on three-way development efforts with Daimler AG of Germany and Ford Motor Co. of the United States. Nissan aims to release its FCEV models in 2017. Haruhito Mori, chief of Nissan’s EV System Laboratory, said, “By combining the superb technological capacities of the three firms, we’ll be able to manufacture world-class cars.”

Unlike Toyota and Nissan, Honda aims to develop FCEVs independently, as it values speedy decision-making. Takashi Moriya, senior chief engineer at Honda, said, “In the future, we can make them [FCEVs] less expensive than hybrids.”

On April 19, a new hydrogen station opened in a corner of a gasoline station in Ebina, Kanagawa Prefecture. It is the 17th hydrogen station in the nation, but the first to be integrated with a gas station.

Installation of hydrogen stations is essential to promote the spread of FCEVs. Combining them with gasoline stations can better utilize existing facilities and is attractive due to the ease of installation.

The government will start subsidizing construction of hydrogen stations this fiscal year, and the number of stations is expected to rise to about 100 by 2015. Seiichi Isshiki, president of JX Nippon Oil & Energy Corp., said, “We’ll operate [multifunctional] stations that can refuel gasoline-powered and fuel cell vehicles and recharge BEVs.”

Filling up the hydrogen tank in an FCEV takes only about three minutes, while fully recharging a BEV takes half an hour. Hydrogen stations are also likely to be more profitable compared with recharging facilities for BEVs. Thus companies in the energy industry view construction of the stations as a new business opportunity.

The challenge now lies in reducing the construction cost of the stations. Erecting one hydrogen refueling station costs about 600 million yen, about six times the price of one gasoline pump. Furthermore, in Japan there are safety regulations on the types of steel materials that can be used for pipes, but the rules in the United States and Europe are not as strict. Therefore, relaxing the regulations will likely become a further point of discussion.