Toyota Aims For Hydrogen Fuel Cell Sticker Price Parity With Gasoline, Diesel Cars, But Electrics May Get There First

When it makes its U.S. market debut in California this fall, the 2016 Toyota Mirai, Toyota’s first ever production hydrogen fuel cell vehicle, will do so with a sticker price of $57,500.

Toyota wants hydrogen fuel cell vehicles to reach parity with internal combustion engine vehicles. It will take a long time to reach that, however.

Toyota wants hydrogen fuel cell vehicles to reach parity with internal combustion engine vehicles. It will take a long time to reach that, however.

Set by Toyota in an attempt to encourage people away from plug-in hybrid and fully-electric cars, that sticker price is intentionally lower than that of the Tesla Model S electric car, the only other zero-emission vehicle on sale in the U.S. to offer a range in excess of 250 miles per refuelling. While that price is competitive however, it also represents a massive loss for Toyota on each and every vehicle since it costs Toyota — based on it’s own figures — an estimated $50,000 to produce each and every fuel cell stack at the heart of each Toyota Mirai. And that’s before you account for any of the other components which make up the hand-built car.

Despite previously admitting that further reductions in costs will be tough to achieve however, Toyota’s executives are now eagerly talking about a future where hydrogen fuel cell cars are priced to compete against gasoline and diesel-powered vehicles.

How quickly it will occur however, is a matter of great internal debate. What’s more, we think it’s likely that battery electric vehicles will reach price parity with internal combustion engine vehicles first.

Talking with Automotive News at the recent Geneva Motor Show, Katsuhiko Hirose, Toyota’s project general manager for hydrogen fuel cell development, said that Toyota’s end-goal is to produce hydrogen fuel cell vehicles that compete on an even playing field with internal combustion engined vehicles, both in terms of purchase price and running costs.  At the moment, he said, Toyota is aiming to produce a next-generation FCV that will cost the same as a modern diesel.

At the moment, Toyota loses money on each and every Mirai it makes.

At the moment, Toyota loses money on each and every Mirai it makes.

“That is a question, but once we made it for the market, huge pressure [to reduce cost] came from our chairman or president,” he said when asked about an expected timeframe for these reductions in costs.

“We say, ‘it may take 15 years.’ Their order is: ‘You do it in half.’ That is normal communication, then we try to extend it, and they try to shorten the target time,” he continued, hinting that Toyota’s board of directors and its engineering teams are perhaps at odds over the true length of time such price reductions could take.

Back in November, Hirose’s colleague Yasuhiro Nonobe had said that while Toyota had managed a massive 95 percent reduction in costs between its previous and current generation FCV technology it was likely that further reductions in cost for a 2020 model-year FCV would be in the order of two-thirds to three-quarters the cost of the Mirai’s fuel cell technology.

Even at that best-case estimate, a 2020 model-year Toyota FCV would still have a fuel cell stack inside which cost approximately $12,500 to make.

That’s far from the parity with internal combustion engine technology Toyota is aiming for.

Toyota wants a future where FCV cars are as cheap as petrol or diesel ones.

Toyota wants a future where FCV cars are as cheap as petrol or diesel ones.

By 2025, optimistic analysts say that lithium-ion battery technology will cost around $160 per kilowatt-hour to produce, with pessimistic ones looking at a price nearer to $200 per kilowatt-hour. Tesla’s own Gigafactory is hoping to hit a price of $100 per kilowatt-hour in under ten years, and some of its rivals — most noticeably General Motors, Nissan and Volkswagen — all have plans for new battery packs with energy densities that match Tesla’s current vehicles to make 200-300 mile range the norm rather than the exception.

The speed of evolution of these changes, not to mention the sheer number of companies working to revolutionise battery technology, makes it likely that reduction in price will occur first for electric vehicles rather than hydrogen fuel cell vehicles.

We note too, that it took Toyota more than ten years to break even on its revolutionary Prius hybrid technology.

For it to break even on hydrogen fuel technology in less, Toyota would need the kind of market explosion that we’ve seen electric cars experience in the past twelve months. Based on Toyota’s own production estimates for the next few years, it won’t be producing enough hydrogen fuel cell vehicles to make that happen.

As regulatory pressure pushes automakers towards producing more zero emission vehicles, we’re sure the cost of both battery electric and hydrogen electric vehicles will dramatically fall. From where we’re looking however, Toyota and its hydrogen fuel cell technology has a lot of catching up to do before it can even contemplate market parity with traditional fuels.

————————————

Want to keep up with the latest news in evolving transport? Don’t forget to follow Transport Evolved on Twitter, like us on Facebook and G+, and subscribe to our YouTube channel.

______________________________________

Want to keep up with the latest news in evolving transport? Don’t forget to follow Transport Evolved on Twitter, like us on Facebook and G+, and subscribe to our YouTube channel.

You can also support us directly as a monthly supporting member by visiting Patreon.com.

Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInDigg thisShare on RedditEmail this to someonePin on Pinterest

Related News

  • Surya

    EVs like the Leaf already reach parity with ICE cars when you look at lifetime cost. With expensive H2 that will be even harder to make a reality for FCV. But I too agree that BEVs will probably cost the same as comparable ICE cars sooner than FCVs wil

  • Bob_Wallace

    Toyota has stated that fuel costs for their FCEV will be 17 cents per mile and that might fall to 10 cents eventually. Compare that to 3 cents per mile for EVs.nnhttp://ecomento.com/2014/08/13/bullish-toyota-admits-hydrogen-wont-be-cheap/#comment-236548nnTelsa is currently paying Panasonic $180/kWh for their cells according to Navigant Research.nnhttp://reneweconomy.com.au/2014/battery-storage-costs-plunge-below100kwh-19365nnnnThe T/P gigafactory is expected to drop prices another 30%.nnnWith Tesla making a decent margin on their Model Ss starting at $71k and Toyota losing $50k on a $57.5k I have to wonder what Toyota is thinking. It’s going to take fairly large scale production to bring costs down to even $50k and the cost of fuel is a non-starter.nnnWhere are the customers who are going to spend the money on a car so expensive to operate? Is Toyota willing to lose $50k + cover fuel costs which could run over $2k per year for 50,000 to 100,000 buyers? And who will build the fueling infrastructure for them?nnnWith battery companies starting to go big the cost of batteries should drop fairly rapidly. It’s just a matter of scale, material costs for lithium ion batteries are about $70/kWh. $100/kWh is where prices should be before long. Some additional capacity improvement could turn the modern EV Gen2 200 mile, $35k EVs into Gen3 250+ $25k EVs.nnnHow can FCEVs push aside affordable long range EVs with rapid charging infrastructure in place?

  • D. Harrower

    Toyota must be delusional, like a beloved aunt or uncle that has started to suffer from dementia. Now they’re just stumbling around making claims they can’t back up. The data just doesn’t jive with what they say.nnNow they claim they will achieve price parity with ICE vehicles but by the time they achieve this, if they ever do, ICE vehicles will no longer be the standard. All their projections assume the EV market will stagnate over the next few years when it is, in reality, poised to explode.nnAlmost every automaker BUT Toyota is set to release a major entry into the EV space within the next three years. Toyota seems unable to process the speed at which EVs are advancing, and there will be THREE such advancement periods in Toyota’s 15 year target. And each will probably be more significant than the last.