Will Americans Buy Toyota Motor Corporation's Hydrogen Car?

Toyota senior vice president Bob Carter showed off the FCV Concept at the Consumer Electronics Show in Las Vegas in January. Toyota says that its FCV Concept is a preview of the hydrogen fuel-cell car it plans to start building next year. Source: Toyota.

Hydrogen-powered cars are coming to U.S. dealerships. But will Americans buy them?

Toyota  (NYSE: TM  ) is betting that at least a few Americans will be willing to pay for a car that runs on hydrogen. The company is expected to launch a production version of its FCV Concept vehicle in Japan, the U.S., and Europe next year.

The FCV Concept is powered by a hydrogen fuel cell. Essentially, it's an electric car that extracts its energy from compressed hydrogen, instead of a battery. Advocates of fuel-cell-powered cars say they're just as clean as battery-electrics -- their only "exhaust" is water vapor -- but they can be smaller and lighter in weight, because they don't have heavy battery packs.

Toyota isn't the only company making this bet. Hyundai  (NASDAQOTH: HYMTF  ) is already selling a fuel cell version of its Tucson SUV in Southern California. And Honda  (NYSE: HMC  ) is expected to launch a new hydrogen car of its own in 2015.

Honda says its radical-looking FCEV Concept represents a "potential styling direction" for the hydrogen car it plans to start building next year. Source: Honda.

Of course, these vehicles aren't cheap -- at least, not if you want to own one. Hyundai's fuel cell vehicle is only available via a special lease program. Toyota's first hydrogen cars could be priced in the same neighborhood as Tesla Motors' battery-electric Model S -- which could make for a very tough comparison for the Japanese giant.

But as Fool contributor John Rosevear explains in this video, Toyota is betting that fuel-cell prices will come down considerably in just a few years -- if the technology catches on.

A transcript of the video is below.

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John Rosevear: Hey Fools, it's John Rosevear, senior auto analyst for Fool.com. Are you ready for hydrogen-powered cars?

Well, ready or not, they're coming. In fact, one is already here, at least if you live in Southern California, where Hyundai is offering a version of its Tucson SUV powered by a hydrogen fuel cell.

But some even bigger names are expected to wade into this market shortly. Japan's Nikkei newspaper reported this past week that Toyota and Honda are both planning to launch cars powered by hydrogen fuel cells as early as next year.

Both already offer hydrogen-powered vehicles, but they're offered on a lease-only basis and marketed mostly to municipalities and certain types of businesses, and these sell in very tiny numbers -- think dozens rather than hundreds.

But these new vehicles are expected to change that, at least a little bit. These are actually electric cars, but instead of battery packs, which are still heavier and more expensive than automakers would like, they have fuel cells, which are devices that extract energy from hydrogen gas and chemically convert it to electricity. They do this by oxidizing the hydrogen, and you know what you get if you combine hydrogen and oxygen -- the only "exhaust" from these vehicles is water vapor.

So, what will these cars be like? Well, Toyota has been showing off a concept car called the FCV Concept, and it's said to be a preview of what they plan to start building next year. You can see a photo of it above this video if you're on Fool.com. In fact, some people have suggested that this could be the next Prius, maybe offered with a choice of regular hybrid or fuel cell powertrains. We'll see.

According to the Nikkei report, Toyota is hoping to sell about 1,000 of these next year, but they'll be expensive -- the report says they'll be priced "below 10 million yen," but 10 million yen is almost $98,000 dollars. Toyota is planning to launch it in Japan and the U.S. and in Europe, and they're hoping to get the sales volumes up to tens of thousands by 2020, and if they do, the price should come down to something more like $30,000 to $50,000. 

Honda has also showed off a fuel cell concept car, they call it the FCEV Concept, for "fuel cell electric vehicle," and as you can see in the photo, it's much more futuristic looking than Toyota's car, and I think it's probably a good bet that the production version will be toned down considerably. Honda describes it as a "potential styling direction," not necessarily an actual preview. But whatever it ends up looking like, Honda says they'll build the production version of the FCEV starting next year, like Toyota, and they'll launch it first in the U.S. and Japan, and then in Europe later on. 

So, ready or not, hydrogen cars are on their way. Thanks for watching.


Read/Post Comments (17) | Recommend This Article (5)

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 March 31, 2014, at 10:44 PM, fraterjason wrote:

    Don't forget to mention Vision Motor Corp. Vision produces Class 8 trucks that run on fuel cells.

  • Report this Comment On April 01, 2014, at 10:41 AM, Aegius wrote:

    Hydrogen fuel cells are the future. This electric car thing is a joke. Americans will only adopt something if it is at least as convenient as something we currently have. Plugging in and charging your car for 18 hours is not convenient.

    The only way hydrogen vehicles can expand is for refueling stations to expand outside of just southern CA.

  • Report this Comment On April 01, 2014, at 1:02 PM, Dahun wrote:

    Hydrogen is derived from natural gas. It far less costly and far cleaner to burn natural gas directly. Pretending hydrogen is readily available or economical is dishonest.

    Fuel cell cars are financed with taxpayer money and would never exist if not for that.

  • Report this Comment On April 01, 2014, at 1:40 PM, speculawyer wrote:

    In general . . . No, they won't. They will be way too expensive and there is not refueling infrastructure. You are much better off buying a Volt or a Tesla.

  • Report this Comment On April 01, 2014, at 1:43 PM, speculawyer wrote:

    Aegius . . . you are dead wrong. "Americans will only adopt something if it is at least as convenient as something we currently have" . . . nope. Cell phones have crappy call quality compared to land lines and often drop the calls . . . but we love them. MP3s have crappy quality compared to CDs .. . but we love them.

    Unless you don't sleep, it is not a big deal to plug in your car. In fact EV drivers spend far less time fueling their vehicles than gas car people do . . . it only takes 5 seconds to plug in or unplug an EV. And the extremely cheap cost of driving on electricity is a nice advantage. As gas prices go up, more and more will shift to EVs and plug-in hybrids.

  • Report this Comment On April 01, 2014, at 5:59 PM, ManoftheRepublic wrote:

    I just went to the department of energy Alternative Energy Fueling Station locator for Hydrogen,,,,,

    Great News, my nearest fueling station is only 1161 miles away...

  • Report this Comment On April 01, 2014, at 6:57 PM, washer wrote:

    You are exactly right , speculawyer. My only restriction ,right now , is financial [fixed income].

  • Report this Comment On April 01, 2014, at 8:22 PM, PeakOilBill wrote:

    Working with hydrogen is a nightmare. Read, 'The Hydrogen Hoax', by former NASA scientist, Robert Zubrin. at The New Atlantis.

    And hydrogen is made from natural gas. There isn't as much of that cheap gas left here as Wall Street wants you to believe. The US is still an importer of natural gas. The only reason why you hear the hype about shale gas, is because only by exporting it can owners of unconventional gas get the price high enough to make a profit extracting it from shale. If they can get export terminals and export permits, foreigners will bid up the price enough to drill very expensive shale wells that run down in two years. The price you will pay will triple.

  • Report this Comment On April 02, 2014, at 12:14 AM, eddabraham wrote:

    Toyota will build and market it, but will not get you approved for a lease because of a low FICO. In other words they are simply not serious about getting this to everyday Americans.

  • Report this Comment On April 02, 2014, at 8:50 AM, CrazyDocAl wrote:

    The reason why Fuel cells will win is simple, our electrical grid. Right now it can handle the few EVs out there but if the number jumps then it's going to quickly become too much to handle. People will be forced to charge their vehicles at odd hours to avoid peak demand.

    With hydrogen the element can be extracted at any point in the day near sources of power. This will avoid one of America's largest problems, an electrical grid already pushed past it's limits and in need of trillions of dollars in upgrades.

    Before you say charging at night is all you need then you clearly haven't thought this out. What do you think would happen if you could only fill your gas tank up after 11pm? People would riot. What if you forgot to plug your car in or for some other reason it didn't charge and you wake up to find you can't get to work today because you are prohibited from charging until the next night?

    Over all the only way people will buy either is if it doesn't disrupt their lives in a meaningful way and if the price is inline with ICE vehicles. Otherwise they are going to be hopelessly outnumbered in sales.

  • Report this Comment On April 02, 2014, at 9:51 AM, Writer12345 wrote:

    Hydrogen is the future fuel for cars and home heating. It is available in abundance on earth.

  • Report this Comment On April 02, 2014, at 9:54 AM, btc909 wrote:

    Natural gas prices are already starting to creep up. A gas of any kind will be taxed to holy hell.

    You can generate electricity yourself in several ways.

  • Report this Comment On April 02, 2014, at 12:59 PM, davidthal wrote:

    CrazyDocAl: Haven't thought this out? Hmmm, I generally sleep at night, which means I have a nice chunk of time to charge my car. If I had a gas station in my house, I'd be perfectly fine with getting gas after 11PM, but your point makes no sense.

    Anyone who forgets to plug in their car will probably only do that once. Just like forgetting to get gas when the tank gets too low.

    Now if there is a power outage that prevents charging, this is a problem. I'd probably have to find an alternate location to plug in. But wait, I already have a generator to power part of my house if the power goes out. Problem solved! If I ever decide to install solar panels on my house with an electric battery for storage, again problem solved.

    The point is that I have plenty of options with an electric battery-powered vehicle. I don't have to wait until it is economically viable enough for the oil and gas industry to install hydrogen power stations all over the place. This isn't going to happen without a lot of taxpayer money or enough incentive (e.g. high-priced hydrogen) for it to be profitable to do.

  • Report this Comment On April 02, 2014, at 3:49 PM, southernshark wrote:

    Is hydrogen like helium, in that you can breathe it in and talk like Donald Duck for a few seconds? If so, that alone could make this car a huge success.

  • Report this Comment On April 02, 2014, at 3:52 PM, southernshark wrote:

    @Writer 12345

    "Hydrogen is the future fuel for cars and home heating. It is available in abundance on earth."

    Hydrogen is, as far as our science allows us to know, the most common element in the universe. It is more common than carbon, for example by a factor of more than 10,000. Thus hydrogen is certainly an available thing, more available than anything else.

    Comparing it to natural gas is a poor analogy because natural gas is much scarcer than hydrogen.

  • Report this Comment On April 10, 2014, at 3:03 PM, canvisionsucceed wrote:

    fraterjason, you've heard of vision? Huh...sometimes I think I'm the only person on the planet who knows about them besides their actual (5) employees.

  • Report this Comment On May 30, 2014, at 1:16 PM, LaureyWilliams wrote:

    I have to admit, this car looks pretty awesome! I wonder if it would last as long as normal cars though. Are hydrogen cars sold at any dealership? It's been a while since I bought a new vehicle. www.carwide.com

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