What was Toyota's (NYSE:TM) best vehicle this year?
We could nominate the compact Corolla, which might end up being the best-selling car in the world in 2015. We could nominate the big-selling RAV4 crossover, a huge part of Toyota's presence in the U.S. and elsewhere.
But while it may not be the "best," I think there's a case for an all-new Toyota that might be the most important. Not because it's blowing up the sales charts -- it's not -- but because it represents the world's largest automaker's vision of the future.
Why the Mirai is much more important than its sales numbers indicate
Toyota's Mirai sedan is one of just a few fuel-cell vehicles on the market now. It runs on hydrogen gas, but it doesn't burn it. Instead, the fuel cell chemically converts the energy in the hydrogen to electricity, which powers the car. The only "exhaust" is water vapor.
It's an intriguing alternative to what we have come to think of as an "electric car," one powered by a heavy and (so far, at least) expensive battery pack. It's possible to design a nice car around the big battery pack -- Tesla Motors' (NASDAQ:TSLA) Model S sedan certainly qualifies -- but the Model S is a big, heavy, expensive luxury car, in large part because of that battery pack.
As Toyota sees it, the Model S and all other battery-electric cars to date suffer from a big drawback: recharging time. Even with one of Tesla's superchargers, it takes a lot longer to "tank up" a Model S than it does to fill one of its internal-combustion rivals with gasoline. Toyota thinks recharging time will prove to be a huge obstacle to the mass adoption of electric cars.
However, Toyota still thinks the world needs electric cars. Hence the Mirai, an electric car than can be "refueled" with compressed hydrogen gas in about the same time it takes to fill an internal-combustion-powered car with gasoline.
But of course, the Mirai has its critics.
Fuel-cell technology has some big-name detractors
Tesla CEO Elon Musk famously described fuel cells as "fool cells," and he didn't mean that in The Motley Fool's sense of the word "fool." He thinks fuel-cell research is a waste of time and money that should be focused on developing better batteries, and he's far from alone. For starters, detractors point out that there's very little infrastructure for refueling hydrogen cars right now, though Toyota and others are working to build more over the next couple of years.
But there's more reason to be skeptical of the technology, they say. Fuel cells are still very expensive technology: The Mirai is priced close to $60,000, although Toyota hopes that costs will come down significantly as sales volumes grow. Another complaint is that current methods of producing hydrogen gas on an industrial scale aren't very green, which doesn't seem likely to change soon.
Those are all fair knocks. And it's also fair to point out that Toyota's two largest rivals, General Motors (NYSE:GM) and Volkswagen (OTC:VWAGY), have both make big commitments to battery-electric technology. Volkswagen is going all-out in the wake of its diesel-emissions scandal, with new CEO Matthias Mueller promising a slew of new battery-electric models in coming years. But GM at least has hedged its bet: While the company plans to bring the all-electric Chevy Bolt to market next year, GM product chief Mark Reuss said not long ago that the company sees roles for both technologies, and that fuel cells may make more sense for larger vehicles.
Fuel cells might also make more sense for vehicles that can't be out of service for more than a few minutes at a time, such as first-responder vehicles or those at busy job sites. Even if technical advances get recharging times down to 10 or 15 minutes for a full-range model, hydrogen refueling is likely to have a critical time advantage in at least some applications.
The upshot: Toyota is committed to this path, at least for now
Toyota's U.S. CEO, Jim Lentz, described the Mirai's fuel-cell system to me earlier this year as a "better battery." History may or may not prove him correct. Toyota has made a big bet on the technology, even as more and more of its rivals are moving toward battery-electrics.
Will it pay off? It's hard to say right now. But for future-minded investors, at least, it's easy to say that the Mirai was Toyota's most significant car this year.