Luke Ottaway's picture

When it comes to EVs and fuel cells, what is Toyota really thinking?

Though there does not necessarily have to be a battle between batteries and fuel cells, it often seems to happen that way. Toyota has been fueling the conflict between the two technologies through its words and actions, but what does the automaker truly think about the future of transportation?
Advertisement


Don’t you sometimes wish you could get inside the heads of other people to find out what they are really thinking? Those following the auto industry, particularly the emerging alternative powertrain segment, no doubt would like to figure out what is going on in the minds of Toyota executives.

The global automotive heavyweight has placed a big bet on hydrogen fuel cell cars while deriding battery electric vehicles and their current shortcomings, but there is almost certainly more to it.

High expectations for fuel cells, harsh words for EVs

Toyota executives have repeatedly offered comments that infuriate electric car advocates as the company trumpets its vision of a hydrogen-powered future. We collected some of the most prominent, occasionally head-scratching statements from recent months:

Bob Carter, senior VP of automotive operations: “Fuel cell electric vehicles will be in our future sooner than many people believe, and in much greater numbers than anyone expected.”

Bob Carter, at the JP Morgan Auto Conference: “The next big thing in automotive technology [is] hydrogen fuel cells.”

Craig Scott, national manager of advanced technologies, to the LA Times: “No one is coming to our door asking us to build a new electric car.”

Mitsuhisa Kato, head of R&D: “The cruising distance is so short for EVs, and the charging time is so long. At the current level of technology, somebody needs to invent a Nobel Prize-winning battery.”

Jim Lentz, CEO of Toyota North America: “For long-range travel primary vehicles, we feel there are better alternatives, such as hybrids and plug-in hybrids, and tomorrow with fuel cells.”

Former Toyota exec Bill Reinert: “While I don’t expect the battery car to get dramatically better, the internal combustion engine is getting phenomenally better...it’s hard to see where the case for the electric car really comes in. Is it for carbon reduction? No, you’d have to decarbonize the whole grid to make that case, and that’s not likely to happen...There’s going to continue to be a market for them, but it’s going to be a very small market.”

The reasoning of Toyota

Toyota clearly believes that EVs, or hydrogen fuel cell cars, must duplicate the range and refueling characteristics of gasoline cars to succeed. This may be wrong, and we would argue that electric vehicles in particular do not have to be capable of 400 miles on a charge with 5-minute refueling times to reach the mass market.

However, human nature sides with Toyota. Consumers are very reluctant to change their habits, and do not often make car-buying decisions based on logic alone. The TEPCO paradox is an excellent demonstration of the psychological considerations of humans when it comes to electric cars.

Toyota certainly has some very valid reasons for its skepticism toward the battery electric car. Today’s electric cars certainly can’t meet everyone’s needs – in addition to drivers who have long commutes or make frequent road trips in regions with low charging station density, 15% of Americans live in apartment homes largely without access to a charging point at night, and this trend is increasing. This is especially a problem in some global markets (i.e. China).

And even with significant reductions in battery costs across the industry, an electric vehicle capable of 200-300 miles on a charge will command a price premium over a legacy gasoline competitor for many years to come – and barring great energy density improvements, such a battery will be large and heavy and difficult to package without redesigning the traditional vehicle architecture as Tesla and BMW have done.

It is also worth pointing out that CARB awards more credits to hydrogen fuel cell vehicles than electric vehicles.

Bullish on fuel cells

One of the reasons Toyota is so bullish on fuel cells is the remarkable progress they have made over the last decade-plus of intense research and development. The automaker has reduced the cost of the fuel cell powertrain by 95% in 12 years and is confident it can reduce it further.

However, it still is a very expensive system in the limited volumes of Toyota’s initial production run of a planned 1,000 units. The car will retail for about $70,000 in Japan, though U.S. pricing is still unconfirmed. Costs will have to come down a whole lot more to bring the mass market even within shouting distance.

Arguably the biggest obstacle to fuel cell vehicle adoption, however, is the lack of hydrogen fueling infrastructure, which Toyota is no doubt aware of. There are currently 11 public refueling stations in California, but allegedly only 68 stations could feasibly serve 10,000 fuel cell cars that would all be within a 6-minute drive of a station.

As for the East Coast, though, don’t hold your breath.

Another disadvantage is the cost of refueling the vehicle. Toyota estimates that a full tank of compressed hydrogen to provide 300 miles of range will cost $50 initially with the potential to reduce to $30. This is approximately equivalent to the cost of gasoline in an average family sedan today, and more expensive than a current Prius even under the optimistic future scenario. Electric cars, on the other hand, require a fraction of the cost to refuel compared to gasoline vehicles – 1/5 to 1/3 the cost per mile in most cases.

Has Toyota’s vision become clouded?

Some are quick to view Toyota’s dogged persistence of fuel cells at the expense of battery electric vehicles as proof that the automaker is off its rocker. We think there is more to it, however.

Granted, there are a couple of clear flaws in Toyota’s apparent reasoning. The company seems to fail to recognize the importance of owner satisfaction of electric vehicles, which by all accounts is unprecedented. The convenience of recharging at home most of the time similarly ought not be overlooked in the value proposition of electric cars, yet Toyota seems to willfully forget this detail.

It also appears on the surface that Toyota assumes lithium-ion batteries will not improve much in the coming years, as many of their arguments are based on the current range limitations of electric cars. However, the second generation of EVs – arriving a mere 5-7 years after the dawn of the current electric car era – will demonstrate significantly increased range across the board, from the Chevrolet Volt to the Nissan LEAF to yet-to-be-revealed long-range EVs from Tesla, GM, and others.

Is Toyota that shortsighted, to presume that the current state-of-the-art in EV batteries will remain so for the foreseeable future?

Obviously not. Contrary to what some EV advocates are quick to suggest, there are plenty of brilliant people at Toyota. We also would be remiss to forget that it was Toyota that pioneered the hybrid electric vehicle back when no other automaker was thinking about fuel efficiency.

What else might they be thinking?

We have a feeling that Toyota and its Lexus division are biding their time until battery technology improves significantly. The automaker is known to be researching solid-state and lithium-air batteries, both potentially revolutionary advancements. Toyota also has a joint venture in China called GAC Toyota Motor Co. that will produce electric vehicles under the Leahead brand, and is expanding an EV charging station trial project in Japan.

It is evident that Toyota has not totally written off the idea of battery electric vehicles, despite what company executives may say publicly. If a better battery comes along, Toyota would likely jump back on board the EV bandwagon for fear of being left behind.

There is also more to fuel cell development than a single Toyota car. Great potential for hydrogen fuel cells exists in grid applications, as well as heavy-duty transport where battery power is impractical. Toyota’s home market of Japan also demonstrates intriguing potential for a legitimate hydrogen economy based on a multitude of factors, and the government is clearly supportive of hydrogen fuel cells – it will be giving out $20,000 in incentives for Toyota’s hydrogen fuel cell car to make it more affordable.

And if there is a future for range-extended electric vehicles that use hydrogen fuel cells as the backup energy supply, Toyota will have an immense head start.

It is undeniable that hydrogen fuel cells present some very interesting possibilities for the future. However, that future may be a long way off if it even arrives at all. Toyota has placed a big bet on the potential of fuel cells while appearing to write off electric vehicles, but their true intentions – as well as a backup plan, assuming there is one – remain unknown to us.


Sign-up to our email newsletter for daily perspectives on car design, trends, events and news, not found elsewhere.

Comments

I went to a great talk recently by John Bozella of Global Automakers. He went over in detail how much more attractive hydrogen is compared to BEV with regards to CARB compliance. You mentioned that in the middle of the story. My mental note was that an H car is about 3X better than a BEV for automakers. Toyota looked for the best path to maximum profits within CARBS guidelines and decided that it can make all the ZEVs it needs to comply with far fewer H cars. I don't think they care one whit about the infrastructure challenges. If they build the cars and the state (CA) hasn't kept up their end I don't really see a problem for Toyota. At their profit level they can almost give away the cars, or better yet, sell them to the states and municipalities that are asking for them to use in fleets. - One last thing, with dozens of hybrid models, some about to enter their fourth generation, and with more gasoline saved than can be credited to all EVs combined, Toyota is not exactly the top environmental evil doer in the auto industry. - I love your last paragraph here. I think you nailed it. It seems to me that both Honda and Toyota already have excellent plug-in EVs at the 90% stage. If batteries increase in density and the cost comes down (or is subsidized) all of Toyota and Honda's hybrids suddenly are perfect platforms for either plug-in hybrids, or EREVs.
Yes the CARB credits are the driving force behind the FCV cartel push to get FCVs on the road. We may also consider that EV sales are way higher at the same launch point as the Toyota hybrid sales at their initial launch. Its just a matter of time until Toyota's tired old synergy drive is put to pasture. Many EV owners have looked to Toyota to make a EV and are disappointed that the best selling EV is a Nissan. Toyota could have done well with an EV but decided not to show leadership.
I totally agree that the Toyota hybrid drive is way overdue for a complete redesign much like Honda just did with its Accord Hybrid and PIH. Not sure I can agree with you about hybrid sales history vs EV sales. We are discussing CARB and US market sales, right? The Prius in its third full year of US sales sold about 25,000 units in the US. The Leaf and Volt (not really a BEV) both did about the same, just under actually. In its fourth year the Prius sold over 50,000 then in its fifth year it sold over 100,000. The Leaf is on track this year (its fourth full year) to do a very respectable 30,000 units, the Volt has gone backwards and will do maybe 20,000. The Tesla (which serves a much different market) has never topped 20,000 and is behind last year's pace. The BMW i3 is doing great, but about half its sales include a gasoline engine. This is the fourth continuous year of modern EV sales in the US. All the BEVs added together do not equal the Prius' fourth year sales (2004). This breakdown ignores that the kooky little 70MPG Honda Insight had a few sales here and there back in the 2000s. We are also ignoring that the GM EV1, a true BEV, was first leased to customers in 1996. This is year 18 for modern EVs in the US market. It is year 14 or 15 for modern hybrids in the US market.
Reportedly Tesla is paying Panasonic $180/kWh for batteries and prices are expected to drop another 30% when the Tesla/Panasonic giga factory is up and running. If all that is true then we are short years from affordable longer range EVs. ( A 50 kWh, 200 mile range battery pack for about $6,000.) If EVs reach affordability and adequate range first they will be 'king of the mountain'. FCEVs will only be able to push them off the mountain if they have a meaningful enough advantage. I can't see selling prices of FCEVs reaching that of EVs without significantly large manufacturing levels. Cost per mile is going to be much higher with FCEVs. And 200 mile range with rapid recharging means the ability to drive all day and arrive no very much later than someone driving an ICEV. A few years back FCEVs looked like the way to get us off oil But battery technology improved and it looks to me as if FCEVs are going to be a dead branch on the evolutionary tree.
California AB 8 Perea, urgency bill for Wallet Flushing tax to build Hydrogen stations to fill car tanks to 10,000 psi of Hydrogen, absolute insanity.
Toyota thinks their 6-11 mile range Prius PHV is better for Canadians than their ~120 Mile Range RAV4 EV (Built in California + Ontario & Sold only in California), and they may be right - since they gave it no Fast Charging DC Ports: Not Tesla, Not CCS, and Not CHAdeMO! However - the Ford Focus EV has a slower base rate included AC Charger than the RAV4 EV - at 6.6 kW versus the RAV4's 9.6 - 10 kW unit from Tesla, so - maybe they could bump it up with a second such Charger, as an option - like Tesla Does, and give it access to 18 kW+ AC Charging!?! That would help, as there are a few Public CS100 L2's from Clipper Creek out there that they could take advantage of! Better - they could have made it with the Tesla Plug and included a J1772 adapter like Tesla owners get when they by their car, as the price of the Tesla Model S HPWC is now less than the equivalent Clipper Creek model! Plus - RAV4 EV owners could borrow home shared plug access from Tesla Owners too! (Even if they gave it no access to the Superchargers, it would still be better than they made it so far!) As to the FCV Problem - they could sell more of them if they had a Dual Fuel Option: Battery Range of 30 - 45 miles minimum, (up to 100 miles even better) - with the FCV for 200 Plus miles of tripping - where you 'need' faster refueling times, anyway! At home - they could be EV's with daily Commuting distance covered by overnight charging, and extra errands with local Level 2 chargers and DC Fast Charging! This would greatly reduce the need for the numbers of City Based H2 Fueling stations, and allow more of them to be placed at Freeway Service Centers, anyway! With a full charge when leaving home, and full Hydrogen, you could get 245 - 300 miles range or even up to 350+ miles range depending on the mix, and - that would allow Inter-City H2 stations to be placed at intervals of 100 - 120 miles average with up to about 150 - 170 miles max for comfort levels! If such stations also had a pair of Level 2 Charging Stations at 100 Amps service, and a couple DC QC's - if the car could access those, they could fill with H2, and then park it at the EV Charging station - plug in - and go hit the washrooms, grab a bite to eat, and come back out, unplug, and go again! With just 45 or so miles of AER - the DC QC would have nearly filled it while they take a break, giving them another full FC Range + the EV Range getting topped up! Many Crew Cab Pickup Trucks also have dual tanks, requiring a vehicle to be re-positioned to fill the other tanks, and more than doubles the fill time, but gives them longer ranges, the FCV+EV (or ERFCV) gives a similar dual tank idea and option to travelers!