Will Toyota's New Fuel Cell Vehicle Cost Less Than $50,000?

2013 Tokyo Motor Show: Toyota Fuel Cell Vehicle (FCV) concept. Photo: Toyota. 

At this year's Tokyo Motor Show, Toyota Motors (NYSE: TM  ) unveiled its fuel cell vehicle, or FCV, concept. Further, Toyota says the production version of its FCV will arrive in early 2015, and when it does, it expects sales to be between 5,000 and 10,000 units. One of the factors that could drive those figures? A price tag around $50,000.

FCVs and the world of tomorrow
Set to arrive in Japan in 2015, and the U.S. in 2016, Toyota's FCV concept is about the size of its Camry, and is estimated to get 310 miles per tank of hydrogen. Further, it can refuel in about three minutes and produces zero emissions during operation, and according to Toyota's deputy chief engineer, Yoshikazu Tanaka, its purpose is to "trigger the growth of fuel-cell vehicles to the level of the current hybrid, the Prius level."

Moreover, thanks to a significant decrease in platinum -- down from 100 grams to about 30 grams – Motor Trend reports that it could cost as little as $50,000. If Motor Trend is right, that's a significant reduction in price and could prove to be the catalyst for fuel cell vehicle growth. 

Honda's Next Generation Solar Hydrogen Station Prototype with FCX Clarity. Photo: Honda.

Obstacles to overcome
FCVs, like Toyota's, still have a number of barriers to entry. One of the most significant is the current lack of infrastructure. However, to help solve this issue, the Department of Energy has launched H2USA, a "public-private partnership with fuel cell electric vehicle original equipment manufacturers focused on advancing hydrogen infrastructure to support more transportation energy options for U.S. consumers." 

Additionally, on Nov. 1, California's governor signed a bill into law that will create more than 100 new hydrogen-fueling stations in the state. Moreover, the Japanese government said it'd do what was necessary to support the development of a hydrogen infrastructure. Plus, Europe is committed to building a hydrogen infrastructure, and the EU has said that "[t]he cost of the necessary Europeanwide hydrogen fueling infrastructure could be five times lower than the cost of the charging network required for battery and plug-in hybrid vehicles."

Ix35 Fuel Cell Vehicle. Photo: Hyundai.

What this leads to
FCVs are coming. In addition to Toyota's FCV, next Spring, Hyundai Motors (NASDAQOTH: HYMTF  ) will begin leasing it's iX35 fuel cell electric vehicle for $499 a month in California -- and for that price you also get unlimited, free hydrogen fuel. And Honda Motors (NYSE: HMC  ) plans to launch its FCV, the FCX Clarity, in 2015.

Further, major strides have been made when it comes to hydrogen production efficiency, and one of the ones that the DOE has its eye on is hydrogen being made from sunlight. According to the National Science Foundation, "A University of Colorado Boulder team has developed a radically new technique that uses the power of sunlight to efficiently split water into its components of hydrogen and oxygen, paving the way for the broad use of hydrogen as a clean, green fuel. According to the DOE, this method doesn't produce greenhouse gas emissions and is low-cost.  

What to watch
Yes, FCVs have a way to go. And yes, there are significant barriers to entry. However, there are also a number of benefits to FCVs, not the least of which is the reduction in CO2 emissions. More importantly, if Toyota markets its FCV for around $50,000, it could prove to be a significant catalyst for FCV adoption. Yes, it's more expensive than many internal combustion engine vehicles, but it's nowhere near the price of Tesla Motors' Model S. And if FCVs do take off, early investors in this market stand to make significant gains. Consequently, if you're looking to invest in FCVs, I'd take a look at the three aforementioned companies betting on hydrogen.

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Read/Post Comments (5) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 29, 2013, at 12:12 PM, altha2008 wrote:

    $50,000 price drops by 1/4 when you drive it off the lot. no thanks.

  • Report this Comment On December 29, 2013, at 3:05 PM, FREEHIKER wrote:

    Where do they get the hydrogen, and what is the cost of it? Breaking down water uses more energy than you get. If extracted from fuel, you have left over components as pollution.

  • Report this Comment On December 29, 2013, at 6:02 PM, DRayZ wrote:

    The fly in the ointment is the amount of electricity, from the existing power grid, that is needed to produce hydrogen. Yes, I know some will point to solar energy as the solution to the problem but, to have the number of refueling stations necessary to support a viable fleet of FC vehicles would require ACRES of solar panels. Until that becomes feasible, the electricity will come from mostly coal-fired power plants. Zero emission at the vehicle but carbon dioxide and mountains of fly ash at the power plants.

  • Report this Comment On December 29, 2013, at 11:09 PM, CrazyDocAl wrote:

    These cars will be sold in southern California. They will get a nice subsidy from the government as well as California making them attractive to some people. What will happen is natural gas companies will line up to sell hydrogen.

  • Report this Comment On December 30, 2013, at 6:35 PM, deeageaux wrote:

    Toyota "May" get the cost of the fuel cell down to $50k not the car itself.

    The latest is the FCV itself will cost $99k.

    More than an $81k 85 kw Model S.

    It will have a cramped 4 passenger interior.

    Model S 5 full size adults plus 2 children with optional rear facing jumper seats in the back.

    FCV 0-60 around 9 sec

    $81k Tesla 5.4 sec.

    Cost of a Supercharger station $250-$300k.

    Cost of a hydrogen station $1M

    Cost of fuel to travel 50 miles?

    Tesla $2

    Toyota FCV $12

    Because refining hydrogen is so energy intensive.

    And refining hydrogen produces more CO2 than producing the equivalent electricity.

    Toyota FCV range using Japanese government cycle 310 miles. EPA cycle 250 miles. Less than 85kw Tesla.

    The only real advantage to FCV is refueling time but not refueling convenience.

    Because you can refuel your Model S overnight at home. And just as Toyota is working on the shortcomings of the FCV Tesla is working to reducing the recharge times.

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