Toyota (NYSE: TM ) said this week that its new FCV Sedan will be priced at about seven million yen when it goes on sale in Japan next spring.
The FCV Sedan is a "fuel cell vehicle". It's an electric car, but unlike the popular Model S from Tesla Motors (NASDAQ: TSLA ) , it doesn't have batteries. Instead, it's powered by a fuel cell, a device that chemically extracts energy from hydrogen gas and turns it into electricity.
As Motley Fool senior auto analyst John Rosevear points out in this video, the FCV Sedan represents an interesting bet for Toyota. Toyota may be the world leader in hybrids, but it's moving away from battery-electric cars and toward fuel cells instead -- even as Tesla CEO Elon Musk mocks fuel cells as a dead-end idea. Who's right?
A transcript of the video is below.
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John Rosevear: Hey Fools, it's John Rosevear, senior auto specialist for Fool.com. Toyota said on Wednesday that its all-new fuel-cell-powered car, which they're calling the FCV Sedan, fuel cell vehicle, will go on sale in Japan "before April 2015" and will come to the U.S. and Europe a few months later, next summer.
Toyota also revealed the new car's final exterior design, which looks a lot like the FCV Concept show car that we saw last fall. And they said that it will be priced at about 7 million yen when it goes on sale in Japan next spring, that's a little under $69,000 dollars.
Not a cheap ride, in other words. But it's still significant.
The FCV Sedan is an electric car, but it's not like the Teslas or the Nissan (NASDAQOTH: NSANY ) Leaf or Ford's (NYSE: F ) Focus Electric, it doesn't have batteries. Instead, it has a fuel cell, which is a device that chemically extracts the energy from hydrogen gas and turns it into electricity. The only "emissions" this car produces is water vapor. Toyota has been moving more aggressively toward fuel cells, they seem to have decided as a company that battery-powered electric cars are not where they want to place their big bets.
But this car is expensive, at the price Toyota announced on Wednesday this thing is going to be competing head on with the entry-level Tesla Model S, which for most people is a completely different and much more compelling proposition.
Of course the thing with the Tesla is like a lot of luxury cars, that may be the starting price but once you add the features you really want it's considerably more expensive, but still. If you're someone who is considering spending $70,000 on a green car, what are the odds that you'll choose this over a Tesla?
The other issue is of course the lack of infrastructure, there are only a few hydrogen refueling stations in the U.S. at the moment and most of them are in southern California, if you live in Texas or Nebraska or Rhode Island or really anywhere that isn't the Los Angeles metro area, you're going to have some trouble when you run out of gas.
Now, there may turn out to be government subsidies for buyers of these, and that may bring the price down to something a little more competitive with higher-end hybrids and so forth, but I wonder how many people will actually be willing to take a chance on this.
And I think it's also interesting that Tesla's CEO Elon Musk is really really disparaging fuel cells, he calls them "Fool Cells" and he doesn't mean "Fool" in the way we mean it here. Of course it's in his interest for battery-electric cars to catch on more widely, so he has an interest in talking down competiting technologies. More battery-electrics would mean more recharging points and so forth and with the Tesla battery gigafactory I think they're really hoping to sell batteries to other automakers.
But it is very interesting that Toyota, who is the global leader in hybrid cars and knows a thing or two about batteries and electric propulsion, is making this strong move toward fuel cells instead. I'm looking forward to seeing how this develops. Thanks for watching.