Would Toyota Shift to Electric Cars Mean Death to Fuel Cells?

Toyota Prius Prime
A push toward Toyota electric cars would signal the company has lost faith in fuel cell vehicles | Toyota

The official Toyota position on green cars was stunningly consistent. Aside from the iconic Prius, the automaker bet heavily on fuel cell vehicles as the brand’s zero-emissions model of the future — despite “fool cell” taunts from a man named Musk. It was a hard line against battery electric vehicles, but the Japanese auto titan stuck to it. According to a report from Japan, Toyota’s script may soon flip with the arrival of a mass-market EV, and it could be the beginning of the end for fuel cells.

This remarkable twist, reported by Japanese newspaper Nikkei (via Reuters), had Toyota assembling a team early next year with the express mission of developing a long-range EV. Without naming sources, the Nikkei report went on to say the electric model would arrive at the end of this decade. Contacted by Reuters, Toyota maintained it was testing every efficient technology with the future in mind.

While this story lacks specific sources, you can see logic behind such a shift in the game plan. For starters, regulations in the U.S. and China may very well increase in the coming years. The situation could make the automaker vulnerable in the world’s top markets. Moving forward, the circumstances could force Toyota to step back from fuel cells and focus on technology that already exists. At least in the U.S. market, the big infrastructure plans involve EV chargers, not hydrogen stations.

Why Toyota needs EVs

Toyota Mirai fuel cell vehicle
The Toyota Mirai has not gained traction due to hydrogen fuel infrastructure limitations | Toyota

Despite the arrival of the Mirai fuel cell vehicle in California, no one considers Toyota’s plans for hydrogen-fueled cars part of the near future. With limited fueling infrastructure in the one state where it’s sold, sales volumes have been low. Meanwhile, clean-air advocates and Tesla CEO Elon Musk are calling for a stronger mandate from California’s Air Resources Board (CARB). Even without changes, state EV sales need to accelerate quickly in the coming years to meet CARB goals.

Toyota will need more than sales of the Prius Prime plug-in hybrid in order to hit manufacturer guidelines. Unless California somehow rolls out hydrogen stations rapidly and consumers swiftly take to the Mirai, sales of Toyota electric cars become necessary. On the federal level, the White House’s drive for alternative fuel corridors yielded maps heavily in favor of battery-powered EVs, while hydrogen stations remain in the background.

The Chinese market also currently favors battery EVs with government subsidies aimed at increasing plug-in concentration. As Toyota looks to the Asian market for untapped potential in the coming three years, electric cars seem like a better bet than fuel cells.

How fuel cells vehicle slide

Toyota RAV4 EV
The California-only, now-discontinued Toyota RAV4 EV | Toyota

The coming two-to-three years will be momentous for the plug-in market. Chevrolet Bolt EV is opening the book on 200-mile EVs costing less than $37,500. Tesla Model 3 should debut in 2017, and we expect the same from Nissan and Ford by 2018. Battery prices are dropping fast, enabling manufacturers to develop better products at competitive prices. By the time hydrogen cars become viable, consumers may prefer battery EVs to less-thrilling, more expensive fuel cell models.

Toyota seems bullish about the progress made with Prius Prime as well. After months of speculation there would be no plug-in model, Prime appeared as the most efficient vehicle on the U.S. market in EV mode. Considering it’s priced the same as a standard Prius, Toyota could use the plug-in as a test case to see how consumers respond. (Our own Micah Wright found Prime exhilarating in a 2016 test.)

This combination of weak infrastructure, a consumer preference for EVs, and slow-to-develop market for hydrogen cars could spell doom (or something close enough) for fuel cell vehicles. In the same way natural gas vehicles never took off, we may be seeing the brief rise and fall of another nonessential transportation option. If it pans out, Musk and others will have the last laugh.

Follow Eric on Twitter @EricSchaalNY