Japan bets big on making fuel-cell cars a near-future reality

Wed Jun 25, 2014 3:26am EDT
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By Yoko Kubota and Maki Shiraki

TOKYO (Reuters) - Japan's government and top carmakers, including Toyota Motor Corp, are joining forces to bet big that they can speed up the arrival of the fuel cell era: a still costly and complex technology that uses hydrogen as fuel and could virtually end the problem of automotive pollution.

Toyota, the world's biggest carmaker, unveiled its first mass-market fuel-cell car on Wednesday, which is due to go on sale in Japan by end-March next year priced at around 7 million yen ($68,600). A U.S. and European launch will follow in the summer.Prime Minister Shinzo Abe's growth strategy, announced the day before, also included a call for subsidies and tax breaks for buyers of fuel-cell vehicles, relaxed curbs on hydrogen fuel stations and other steps under a road map to promote hydrogen energy.

That will bolster plans by Toyota and Honda Motor Co, Japan's No.3, to start fuel-cell vehicle sales in 2015.

"This is the start of a long challenge to make hydrogen a standard feature in society and to make the fuel-cell vehicle an ordinary automobile," Toyota Executive Vice-President Mitsuhisa Kato told a news conference.

With two of Japan's three biggest automakers going all in on fuel cells, the country's long-term future as an automotive powerhouse could now hinge largely on the success of what they hope will be a key technology of the next few decades.

The auto sector carries special significance in Japan, providing nearly one in 11 jobs and about one-fifth of its manufacturing output. It is also one of the few big industries where Japan remains at the pinnacle of global competition after losing much of its edge in electronics and elsewhere.

Japan's ruling party is pushing for ample subsidies and tax breaks for consumers to bring the cost of a fuel-cell car down to about $20,000 by 2025. The government is also aiming to create 100 hydrogen fuel stations by end-March 2016 in urban areas where the vehicles will be launched initially.

"To stay globally competitive, Japan cannot afford to lag behind in this area," said Yuriko Koike, a former environment minister who heads a group of ruling party lawmakers advocating hydrogen energy.   Continued...

A security guard walks under the logo of Toyota Motor Corp at the company's showroom in Tokyo June 17, 2014. REUTERS/Yuya Shino