The Asian nation, the third largest economy in the world, is ready to invest in a commercially unproven technology, as Toyota, Honda and suppliers ready the introduction of the first wide series fuel cell cars and the infrastructure to support them.
Prime Minister Shinzo Abe’s newly revealed plan to subsidy the electric cars with at least $20,000 per vehicle is a huge gamble, one that could be worth more than $400 million if the boldest predictions of the automakers pan out. Toyota, Honda and the companies that would levy the infrastructure say fuel cell cars are the true answer to clean transportation, overcoming many of today’s limitations of the battery electric cars.
“It’s still difficult to make these cars popular among ordinary consumers, but the subsidy has certain effects on companies interested in promoting themselves as green,” said Tomohide Kazama, Senior Consultant at Nomura Research Institute. “It’s a move to plant a seed for future growth.”
Still, the technology that was developed initially during the space race is largely commercially unproven, has huge development costs and dearly lacks the necessary refueling network – as hydrogen fuel stations alone cost millions per unit to build. The tax-payer funded subsidy would effectively lower the cost of Toyota’s newly announced FCV to around $50,000 – or as much as a mid size sedan in the premium class.