Will Americans Buy Toyota Motor Corporation's Hydrogen Car?

Toyota and Honda will bring hydrogen cars to the U.S. market next year. Are you ready?

Mar 31, 2014 at 5:13PM


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.

Are you ready for this $14.4 trillion revolution?
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.

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.

John Rosevear has no position in any stocks mentioned. The Motley Fool recommends Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers