Toyota’s $63000 Mirai Greeted by Japan’s Prius-Like Bet – Bloomberg

Posted: Tuesday, November 18, 2014

Toyota Motor Corp. (7203) will start
selling its Mirai fuel-cell vehicle for 7.24 million yen
($63,000), which Japan will subsidize with the aim of repeating
a bet that paid off with the world’s most popular hybrid.

Early buyers of the Mirai, which runs on hydrogen and emits
only water vapor, will be entitled to about 3 million yen in
subsidies in some areas, government officials have said. The
support mirrors the inducements Japan has offered to purchasers
of hybrids including the Prius, sold since 1997. Toyota and
Japan have since dominated global hybrid sales and production.

“Hydrogen can encourage new industrial development that
can have the impact of changing our society’s structure,
creating new jobs and improving our global competitiveness,”
Mitsuhisa Kato, a Toyota executive vice president, said today in
Tokyo.

Toyota is receiving government support to popularize what
it sees as the next-generation technology for autos, just as it
did with cars running on both gasoline and electricity. The
Prius and other Japan-made models have been eligible for
domestic tax breaks and incentives that have helped the nation’s
companies achieve scale and lower costs, paving the way for
Toyota to sell 7 million hybrids cumulatively as of September.




Photographer: Tomohiro Ohsumi/Bloomberg

An Iwatani Corp. employee holds a fuel dispenser nozzle as he prepares to fill a Toyota Motor Corp. Mirai fuel-cell powered vehicle with compressed hydrogen from a smart hydrogen fueling station in Tokyo, Japan, on Nov. 17, 2014. Close

An Iwatani Corp. employee holds a fuel dispenser nozzle as he prepares to fill a Toyota… Read More

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Photographer: Tomohiro Ohsumi/Bloomberg

An Iwatani Corp. employee holds a fuel dispenser nozzle as he prepares to fill a Toyota Motor Corp. Mirai fuel-cell powered vehicle with compressed hydrogen from a smart hydrogen fueling station in Tokyo, Japan, on Nov. 17, 2014.

Prime Minister Shinzo Abe has called for forming a
“hydrogen society” in Japan after the nation’s 2011 nuclear
disaster led to surging oil imports and record trade deficits.
The energy predicament for the world’s third-largest economy,
which has slumped into its fourth recession since 2008, adds to
Japan’s motives for supporting hydrogen-powered cars.

Energy Objectives

“You heard energy diversity, energy security mentioned
several times,” Christopher Richter, a Tokyo-based auto analyst
at CLSA Ltd., said after attending Toyota’s presentation today
in Japan. “You didn’t hear as much about carbon reduction or
climate change or global warming, which was kind of revealing of
what their objectives are here.”

Toyota plans to build 700 Mirai fuel-cell cars in the next
year from the Motomachi plant near its headquarters in Toyota
City, Japan. Output will rise to tens of thousands annually
during the 2020s, Chairman Takeshi Uchiyamada said in Newport
Beach
, California, before the Los Angeles auto show.

“Gasoline has been the primary fuel for the first 100
years of the automobile,” said Uchiyamada, known within Toyota
as the father of the Prius. “I believe that hydrogen will be
the same for the next hundred years.”




Photographer: Tomohiro Ohsumi/Bloomberg

The power control unit for the Toyota Motor Corp. Mirai fuel-cell powered vehicle is seen in Tokyo, Japan, on Nov. 17, 2014. Close

The power control unit for the Toyota Motor Corp. Mirai fuel-cell powered vehicle is… Read More

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Photographer: Tomohiro Ohsumi/Bloomberg

The power control unit for the Toyota Motor Corp. Mirai fuel-cell powered vehicle is seen in Tokyo, Japan, on Nov. 17, 2014.

Toyota rose 2.5 percent to 6,998 yen at the close in Tokyo.
The shares have advanced 9 percent this year, outpacing the 7.1
percent gain for Japan’s benchmark Topix Index.

U.S. Price

In the U.S., Toyota will charge $57,500 for the Mirai,
which can travel 300 miles (483 kilometers) on a hydrogen tank
that can be refilled in less than five minutes. Federal and
state incentives could reduce the price by as much as $13,000,
and Toyota plans to provide free fuel to early buyers. Customers
can also lease the car for three years for $499 a month.

Automakers are under pressure in California, as well as
across the U.S., Europe, Japan and South Korea, to offer
vehicles that emit little or no carbon pollution and reduce
petroleum use. Eventually, Toyota and its affiliates also plan
to sell trucks, buses and forklifts that run on fuel cells.

For now, hybrids are the top-selling vehicles powered by
alternative powertrains. Carmakers will build almost 2.2 million
of them this year, with Japan accounting for 70 percent of
worldwide production, IHS Automotive estimated as of August. The
researcher projected two of every five cars assembled in Japan
will be hybrids by 2020.

Facing Skeptics

Toyota faces skeptics among analysts and electric-car
advocates including Tesla Motors Inc. (TSLA) Chairman Elon Musk. IHS
Automotive projects fuel-cell vehicles will need until 2019 to
top 5,000 units per year and sees output failing to exceed
15,000 annually through 2025.

The researcher predicts automakers will produce more than
30,000 electric cars in 2015. Musk, who has criticized using
fuel cells to power cars, forecasts Tesla alone will deliver
50,000 battery-powered Model S sedans that year.

Competitors also loom, with Honda Motor Co. (7267) competing
against the company to get a fuel-cell car to market, just as
the Insight hybrid battled the Prius in the 1990s. Honda
yesterday showed a five-seat concept car in Tokyo, previewing a
production model that goes on sale by the end of March 2016.

The planned arrival for Honda’s car is later than the 2015
introduction date set by the company as of last year. The
automaker needs more time due to the complexities of the
technology, Honda President Takanobu Ito said yesterday. Kiyoshi
Shimizu, the vehicle’s chief engineer, said recent recalls of
Honda’s Fit compact and Vezel crossover also have led to added
scrutiny of the fuel-cell car’s development.

Five Seats

“Our strong point is this car is a five-seat sedan,”
Shimizu said. Honda’s hydrogen system is installed under the
hood rather than beneath the car to improve roominess compared
with Toyota’s four-seat Mirai, he said.

Both Toyota and Honda are introducing their models after
Hyundai Motor Co. (005380), which started retail leasing of its hydrogen-powered crossover in June in California. The company also sells
the vehicle to government fleets in South Korea and Europe.

Hyundai’s model is priced at 150 million won ($137,000) in
the Seoul-based company’s home market. The nation’s environment
ministry is providing subsidies of about 60 million won, or half
the incremental cost of the fuel-cell Tucson compared with the
gasoline-powered model.

Japan’s Subsidies

Japan’s fuel-cell subsidies are bigger than the incentives
China, the U.S. and Europe offer for electric-vehicle buyers.

In Beijing, buyers of an EV can get as much as 114,000 yuan
($18,600) off the sticker price after central and local
government rebates. The U.S. offers a $7,500 per vehicle federal
tax credit to electric vehicle buyers, before additional state
incentives. In Europe, Norway has provided the most generous
incentives, amounting to as much as $8,200 per car.

In Japan, the subsidies for Toyota’s Mirai will be more
than triple the 950,000 yen of incentives offered for buyers of
Mitsubishi Motors Corp. (7211)’s all-electric i-MiEV.

To contact the reporters on this story:
Craig Trudell in Tokyo at
ctrudell1@bloomberg.net;
Yuki Hagiwara in Tokyo at
yhagiwara1@bloomberg.net;
John Lippert in Chicago at
jlippert@bloomberg.net

To contact the editors responsible for this story:
Chua Kong Ho at
kchua6@bloomberg.net
Terje Langeland, Dave McCombs

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