Japan is readying subsidies to help Toyota Motor Corp. and key suppliers take the lead in hydrogen-powered fuel cell vehicles that could top $400 million over the next several years.
Prime Minister Shinzo Abe’s planned consumer rebates of at least $20,000 per vehicle would be the largest government support plan for hydrogen vehicles yet, raising the stakes for a commercially unproven technology with roots in the space race that Toyota and others see headed for the mainstream over the coming decades.
The taxpayer-funded program would bring down the cost of Toyota’s soon-to-be-launched hydrogen-powered fuel cell car to around $50,000 in Japan, about the cost of a small luxury sedan such as the BMW 3 Series.
The cost savings could be enough to make the Toyota vehicle affordable for taxi operators and other companies with fleets of vehicles within driving range of the 100 hydrogen fueling stations that Japan expects to have built by March 2015.
Fuel cell vehicles, which run on electricity made by cells that combine hydrogen and oxygen, have been in testing since the 1960s, when the technology was also being developed by NASA.
Since the vehicles emit only water and heat, they have been seen as an environmentally friendly alternative to those powered by combustion engines.
It could also help Japan shift to hydrogen energy as the country, dependent on imported fossil fuel as an energy source after the 2011 Fukushima nuclear disaster, seeks to cut carbon emissions. While much of the hydrogen used in the country now is made from fossil fuel, the government hopes to implement carbon-free production by 2040.
The $20,000 rebate per car means taxpayers may support subsidies of up to around $200 million a year. Annual sales forecast for fuel cell vehicles in the early years of market introduction vary from several hundred to 10,000 vehicles.
To put 100 hydrogen fuel stations in urban areas by the end of March 2015 will be an estimated $2 million per station — which cost $4-5 million each to build — meaning another $200 million in taxpayer money.
The government plans to continue offering subsidies and tax breaks so that fuel cell cars can sell at around the same price as gas-electric hybrids in the 2020s.
Besides Toyota, Honda also plans to start selling its fuel cell vehicle in 2015. Automakers including General Motors Co. and Ford Motor Co. have been working on fuel cells for years and Daimler AG and Hyundai Motor Co. lease fuel cell cars in the United States, but so far there are no plans for sales in Japan.