Japan readies fuel cell subsidies in bet on Toyota’s next big thing
By Yoko Kubota and Maki Shiraki
TOKYO (Reuters) - Japan is readying subsidies to help Toyota Motor Corp (7203.T: Quote) and key suppliers take the lead in hydrogen-powered fuel cell vehicles that could top $400 million over the next several years if the most bullish projections for the technology play out.
Prime Minister Shinzo Abe's planned consumer rebates of at least $20,000 per vehicle would be the largest government support plan for hydrogen vehicles yet, raising the stakes for a commercially unproven technology with roots in the space race that Toyota and others see headed for the mainstream over the coming decades.
The taxpayer-funded program would bring down the cost of Toyota's soon-to-be-launched hydrogen-powered fuel cell car to around $50,000 in Japan, about the cost of a small luxury sedan such as the BMW 3 Series.
Abe announced the outline of the plan last week and details are still being finalised.
The cost savings could be enough to make the Toyota vehicle affordable for taxi operators and other companies with fleets of vehicles within driving range of the 100 hydrogen fuelling stations that Japan expects to have built by March 2015.
"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."
Fuel cell vehicles, which run on electricity made by cells that combine hydrogen and oxygen, have been in testing since the 1960s, when the technology was also being developed by NASA.
Since the vehicles emit only water and heat, they have been seen as an environmentally friendly alternative to those powered by combustion engines. Continued...