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Electric and hybrid cars have made great headway in the automotive market, such that they are no longer much of a novelty. Still, they remain less common than conventional gasoline engines, and their ability to shift the world toward more sustainable driving practices appears somewhat limited. Accordingly, several car companies, and Toyota primarily, seek an alternative option, in the form of hydrogen fuel cells to power vehicles.

A hydrogen fuel cell functions similar to a gasoline engine, except that it relies on the world’s most abundant element. A fuel cell holds enough hydrogen to power the motor for about 300 miles, also similar to a gasoline engine. Once it is depleted, it needs to be refueled—again, just like a conventional car driver would pull up to the gas pump.

But the similarities end there. Notably, unlike the vast availability of gas stations nearly everywhere in the developed world, hydrogen fuel stations are few and far between. The limited development of this market also means that there are not many alternatives in place that can ensure consistent supply. For example, when one supplier in the San Francisco Bay Area suffered an explosion, rendering it unable to service local hydrogen fuel pumps, there was no competitor available to take on the task. Drivers had no place to go to refuel, leaving them stranded and frustrated.

The accessibility issue is not limited to crisis situations though. There are only 61 hydrogen fuel stations in the United States. Other countries have more of them per capita; in particular, Japan has many more of them, driven both by the initiative of Toyota, as a local car manufacturer, and nationwide concerns about energy security. Japan lacks any of its own reserves of oil, and its experiences with nuclear disasters, such as at the Fukushima reactor, have made consumers leery about relying too much on that option. Therefore, hydrogen represents a much more popular and appealing source there.

In the United States though, the story is different. Toyota has focused most of its efforts to expand the market for fuel cell vehicles in California by introducing its Mirai model in showrooms in various cities. The state, generally known for its sustainability efforts, offers buyers a $10,000 tax break and a $15,000 fuel credit in return for purchasing a Mirai from Toyota, which is priced at around $60,000. The generous credits reflect the valuable environmental promise of fuel cell cars, which only emit water from their tailpipes, rather than any harmful pollutants. The state also has announced plans for at least 1,000 hydrogen fuel stations by the end of the 2020s.

But in the meantime, not a lot of consumers are buying it, literally or figuratively. Environmentally conscious drivers have vastly increased choices of hybrid and electric cars. If they choose an electric car, they can easily “refuel” it by plugging it in at home. The prices of these options also have continued to grow more reasonable, such that they are not substantially more expensive than comparable gasoline models.

In the face of these seemingly negative trends—and dismissive predictions of its failure by Tesla founder Elon Musk—Toyota is standing firm. It plans to increase production of its Mirai model from 3,000 to 30,000 cars next year.

Discussion Questions:

  1. Is Toyota’s dedication to hydrogen fuel cell technology reasonable—that is, is it evidence of forward thinking or a signal of failing to account for the marketing environment?
  2. What kinds of factors might account for the varying reception of hydrogen fuel cell vehicles in different countries?

Source: Faiz Siddiqui, “The Plug-In Electric Car Is Having Its Moment. But Despite False Starts, Toyota Is Still Trying to Make the Fuel Cell Happen,” Washington Post, February 26, 2020