Toyota plans ¥500bn share issue to fund fuel cell research
Toyota will seek approval to issue up to 150 million new Model AA shares, raising about ¥500 billion to support long-term hydrogen and fuel cell development.
Toyota has announced plans to raise up to ¥500 billion by issuing 150 million new Model AA shares, aiming to secure long-term funding for fuel cell and hydrogen technology research. The proposal, disclosed in a filing to Japan’s Finance Ministry, will be put to shareholders for approval at the company’s annual meeting in June.
The Model AA shares will not be listed on the open market and come with trading restrictions for about five years. Investors are offered a dividend at least 20 percent higher than that of ordinary shares, with the option to sell the shares back at the original issue price after the restricted period or convert them into common stock at a favourable rate. Toyota expects the structure to appeal to long-term investors seeking higher returns while supporting the company’s technology development plans.
Focus on hydrogen and fuel cell vehicles
The carmaker has prioritised hydrogen fuel cell technology as a core part of its strategy, having already launched the Mirai fuel cell saloon. Toyota management has described the Mirai as a model for the next century, setting the company apart from rivals focused on battery-electric vehicles. Proceeds from the new share issue will be directed primarily to research and development in hydrogen and fuel cell systems, although the funding could also support other advanced technologies.
Toyota’s approach differs from manufacturers such as Hyundai, who are also investing in hydrogen vehicles but face similar questions about infrastructure and long-term viability. Daimler’s CEO, for instance, has expressed doubts about the commercial prospects for fuel cells compared to self-driving technologies. For more on Hyundai's hydrogen plans, see Hyundai to Unveil New Hydrogen Fuel Cell SUV in 2017.
Shareholder approval and timeline
If shareholders approve the plan at the June meeting, Toyota intends to issue up to 50 million Model AA shares immediately. The remaining shares could be offered in annual batches over the following five years, depending on market conditions and funding needs. The company has not detailed the exact schedule beyond the initial offering.
