Toyota plans 10-fold boost to hydrogen bet with restyled Sedan

The Japanese behemoth will begin sales late next year of the second-generation Mirai, its fuel cell-powered four-door, and ramp up annual production by 10-fold from the current model. Toyota’s bet that it can position a hydrogen sedan for more of a mass market flies in the face of rivals wagering on putting batteries into the bigger-bodied vehicles consumers are buying.

Toyota has been slower than peers to embrace EVs, citing uncertain demand in key markets including the US and technical hurdles that limit battery range and recharging times. While the company has pledged to offer an electrified version of every model in the next five years, and 10 fully electric vehicles by early the next decade, its also going to keep coaxing consumers to give hydrogen a try.

Toyota will not be putting all our eggs in one technology basket, Doug Murtha, Toyota’s U.S. Group Vice President for corporate strategy and planning, said at a briefing in Greensboro, North Carolina.

Toyota’s near-term electrification goals in the U.S. center on its gas-electric hybrid powertrains. It currently sells six hybrid vehicles and said Thursday it will add a plug-in hybrid version of its RAV4 crossover next year.

The company plans to increase sales of hybrid cars and SUVs in the U.S. to 25% of deliveries by 2025, up from about 9% today.

Slow Development

Toyota began developing hydrogen-powered cars more than 20 years ago, but progress has been slow due to high material costs and steep hurdles to setting up refuelling infrastructure. Recent technological advances halved the cost of fuel cell stacks that mix hydrogen and oxygen to produce electricity, allowing the car maker to boost global output from 3,000 a year in 2018 to 30,000 next year and 200,000 by 2025, Taiyo Kawai, General Manager of the company’s hydrogen efforts, told reporters during a briefing in London.

Rival auto makers such as General Motors Co. in the U.S. and BMW AG in Europe have invested in fuel cell technology but are prioritizing EVs in their current and future zero-emission products. In the U.S., only Toyota, Honda Motor Co. and Hyundai Motor Co. sell fuel cell-powered passenger cars -- and only at a handful of dealers due to the scarcity of hydrogen stations.

Fuel cell vehicles offer several advantages over battery-powered cars, including quicker refuelling times and longer driving ranges. But they remain a novelty, accounting for less than 0.1% of the nearly 100 million vehicles produced each year, according to research by the National Academy of Sciences.

Unfortunately, despite years of education efforts, hydrogen cars are still a mystery to most people, said Jackie Birdsall, a senior engineer at Toyota’s R&D center in Gardena, California. The good news is that fuel cell technology is gaining momentum around the world, she said.

Hydrogen stations

Improvements have been made to shrink the size of hydrogen fuel tanks and reduce the amount of costly platinum needed for fuel cell stacks. But there is still more to do, including replacing platinum with cheaper synthetic materials, said Shawn Litster, a mechanical engineering professor at Carnegie Mellon University.

Toyota, which loses money on the current Mirai, has not said when it plans to break even with a future version. The company showed a near production-ready model to reporters this week in Greensboro, but would not say when the car will make its official public debut.

The first Mirai -- which means future in Japanese -- debuted in late 2014, but availability in the U.S. has been limited to California and Hawaii. California has spent about $100 million over the past several years to build out a network of hydrogen stations. The state currently lists just 38 retail locations that are operational; another 22 are in various stages of development.

The first-generation cars oddball looks, $58,500 sticker price and cramped interior made it a hard sell for dealers. Most U.S. drivers lease the Mirai, and experiences with the futuristic vehicle have been mixed.

Going global

The new version of the Mirai is sleeker and more coupe-like, with a lower, longer and wider stance. It has room inside for five passengers, one more than the current model, and sports racier 20-inch wheels.

Toyota says the Mirai will make a 30% leap from the existing models 312-mile range. Pricing wont be announced until later, but it will be sold as a premium vehicle under the Toyota brand. Sales may be expanded to some states in the Northeast and Northwest, pending their build-up of hydrogen station networks.

Toyota’s U.S. executives said that while they may prefer to have an SUV to sell, the company has stuck with a sedan body style to compete with premium models where passenger cars are still popular. In addition to Japan, Europe and the U.S., the Mirai will be sold in China, Australia and parts of the Middle East. If I were king, we might have gone for something larger, Murphy said. But this needed to be a vehicle for global markets, not just us here.

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