Japan Is Betting Big on Hydrogen Vehicles

Source: Spencer Platt/Getty Images
Source: Spencer Platt/Getty Images

With hybrids, all-electric, and even hydrogen-powered vehicles all entering or set to enter the mainstream auto industry, one nation is making its intentions well-known. That country is Japan, and it appears that the country is set to go all-in on the most commonly-found element on Earth.

Hydrogen is the way of the future, or at least the Japanese are pushing a good amount of their chips into its corner. Though hydrogen-cell technology had been swirling around auto industry circles for several years, Toyota is the first, and so far the only automaker (though many have shown off concepts) that has committed to building a production HCV, the new Mirai sedan.

Toyota was the first major automaker to jump behind hybrid and electric technology as well, putting a huge amount of resources in its bet that the Prius would take off. It won that time, being years ahead of many competitors, and still others who are struggling to keep up. For example, the Prius was released in Japan way back in 1997, and it took American car companies more than a decade to catch up. Chevy, for instance, didn’t release the Volt until late 2010. Ford’s Fusion Hybrid didn’t hit the market until 2006.

Clearly, Toyota had a jump on the market in that instance, and carefully hedged its bet that consumers — and the market at large — would gravitate toward electric and hybrid vehicles. It was right in that case, and it looks as though it’s willing to take the same risk with hydrogen fuel-cell vehicles.

Source: Toyota
Source: Toyota

While Toyota’s introduction of the Mirai is definitely an achievement, it’s going to take some coordination to make the vehicle a success. That’s where the Japanese government has decided to step in, and help make HCVs become little more than a flash in the pan. Behind a decree from Prime Minister Shinzo Abe, Bloomberg is reporting that Japan is committing to building self-service hydrogen fueling stations, and also easing regulations to help ease hydrogen-powered vehicles into the market.

“It’s time to introduce a hydrogen era,” Abe said. “I want all ministries and agencies to have it.”

While Toyota and other Japanese-based automakers like Nissan and Honda will all benefit from the influx of investment for FCV infrastructure and more lax regulations, Prime Minister Abe’s announcement is not strictly to help out the automotive industry. Bloomberg says that the Japanese hope to eventually incorporate hydrogen fuel cells into homes and office buildings. By increasing investment in hydrogen-based power sources from approximately 1 trillion yen in 2030 ($9.8 billion) to 8 trillion yen in 2050, it’s clear that the Japanese see hydrogen as not only a viable alternative to fossil fuels, but that they are willing to bet it is the next big thing in energy production.

“Hydrogen energy has the potential for wide applications, not just fuel cell vehicles and fuel cells for homes,” a report from Japan’s New Energy and Industrial Technology Development Organization said. “It also has the potential for areas such as transportation and power generation.”

This announcement hit the newswires last summer, before Toyota’s Mirai had even been announced. That raises questions as to whether or not Toyota had actually been holding out on pushing the Mirai to production until the company was at least assured that there would be some sort of public infrastructure to help support potential buyers. As we know, it’s hard to own a car that you can’t refuel or recharge anywhere, so it would only make sense that the Mirai, and its future competitors, would hit the market after the government had made some concessions.

So far, Toyota’s bet appears to be paying off. The company has received more than 1,500 orders in Japan, reports are saying.

Source: Hyundai
Source: Hyundai

Toyota has certainly been making the most waves with its new fuel-cell vehicle, but it’s not the only company wading into the market. Hyundai, for example, is also pushing out the new Tucson fuel-cell SUV, which will give the Mirai a competitor right out of the gate. The question is, will Americans buy in?

As mentioned, Japan is giving the industry concessions in an attempt to adopt hydrogen fuel cells in a wider capacity. But other countries may not be making the same bet. Americans, for example, are still buying gasoline-powered cars for the most part. Companies like Tesla, which makes all-electric cars, are still doing their best to integrate charging stations across the country, but progress has been slow. Just imagine how long it would take to not only sell the American public on the idea of hydrogen fuel-cells (it took them long enough to buy into hybrids and EVs), and then to agree to public investment on infrastructure to support them.

But again, the U.S. is a vastly different — and vastly larger — nation than Japan is. As the Japanese people (and its government especially) seem willing to bet on the future of hydrogen as an energy source, that may not — and likely won’t be — the case in America. But if Toyota is able to capitalize on a new technology and demonstrate its feasibility in the Japanese market, like it did with the Prius, it could whet the appetite of western nations. Facing more stringent regulations in terms of efficiency and emissions, western governments may be more willing to adopt FCVs, and help with infrastructure, than they appear right now.

If one thing is clear, it’s that Japan isn’t waiting for the rest of the world to catch up. The country’s leaders, and Toyota, are blazing ahead, just as they did with the Prius. “The innovation in Mirai will be greater than our Prius (hybrid),” said Mitsuhisa Kato, Toyota’s executive vice-president, according to the Financial Times. “This is the start of a long, long path ahead.”

IHS Automotive, an auto industry analysis firm, is predicting FCV sales to total 4,500 in 2016, but jump to 11,500 by 2022. If that growth rate can be sustained into the future, then maybe Japan’s big bet will pay off.

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