Toyota Tackles Chicken And Egg With Rollout Plan for Hydrogen-Powered Mirai – Forbes

Posted: Tuesday, November 18, 2014

Automakers have long gushed about the advantages of hydrogen fuel cell vehicles– no emissions, no fossil fuels, none of the range anxiety associated with electric cars. But the hang-up has always been the lack of hydrogen fueling stations.

Without a convenient hydrogen infrastructure, no one would buy a fuel cell car. But until there is sufficient demand for fuel cell vehicles, there’s no point in building hydrogen stations. It’s a classic chicken-and-egg dilemma.

Toyota Motor hopes to simultaneously solve both issues with the introduction of the hydrogen-powered Mirai, a four-door sedan that refuels in about five minutes and travels 300 miles between fill-ups. To kickstart public acceptance of fuel cells, the Japanese carmaker is subsidizing the construction of hydrogen stations in California and the Northeast, and paying early buyers’ cost for refueling.

“We’re going to have to move in tandem with the infrastructure. We can’t move one faster than the other,” said Jim Lentz, chief executive of Toyota North America.

The Mirai will debut next fall in California, which Toyota’s Group Vice President for Strategic Planning Chris Hostetter said “is beginning to look like the global epicenter for the hydrogen movement.” It’ll be priced at $57,500 or  $499 a month for a 36-month lease.With a federal tax credit of up to $8,000 and a state rebate of $5,000, the net price could fall to below $45,000, Toyota says.

Toyota expects most customers to lease the Mirai, however. The $499 lease, after $3,649 due at signing, is similar to the lease rate on Hyundai Motor’s fuel cell Tuscon SUV, which requires $2,999 down. The price includes 24/7 concierge service and roadside assistance; three years of free maintenance, and an eight-year, 100,000-mile warranty, among other perks.

Like Hyundai, Toyota is covering the cost of refueling for the three-year lease term. That’s more a practicality than a benevolent gesture: California has yet to finalize exacting standards to measure hydrogen dispensed at the fuel pump, so it’s impossible to price it. Toyota executives say it’s roughly $10 per kilogram, equivalent to $4-per-gallon gasoline. It’ll cost Toyota roughly $1,500 per vehicle to cover annual refueling for its customers.

It’s a small price to pay to nudge the market for fuel cells, Toyota says. “The ultimate success of fuel cell technology will depend less on the genius of the car than it will on the ownership experience,” said Toyota Chairman Takeshi Uchiyamada.

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