You’re going to have to be pretty passionate about hydrogen fuel cell technology in order to justify purchasing Toyota’s (NYSE:TM) new FCV when it lands in the United States next year, as it’s slated to cost in the neighborhood of $70,000 off the showroom floor — though it’s worth mentioning that this figure is based on the 7 million yen price tag (about $68,000) that it was awarded in Japan. Toyota notes that it hasn’t set European or North American pricing yet.
Like in the U.S., initial sales will be confined to areas that already support a hydrogen refueling infrastructure or are having one built. Overall, Toyota is remaining pretty mum about the details of its groundbreaking new car, but we now know that it will provide a similar experience as the conventional gasoline sedans it currently produces and will boast a driving range of about 435 miles.
The production model looks virtually identical to the concept that was revealed last year, and unlike plug-in battery-electric vehicles, it can be refueled in about three minutes. Hydrogen power has its fair share of critics, but Toyota is confident that once greater adoption can be recognized, it will be the way forward.
“Hydrogen is a particularly promising alternative fuel since it can be produced using a wide variety of primary energy sources, including solar and wind power,” Toyota said in its statement. “When compressed, it has a higher energy density than batteries and is easier to store and transport. In addition to its potential as a fuel for home and automotive use, hydrogen could be used in a wide range of applications, including large-scale power generation.”
But let’s get back to that price. By any stretch of the imagination, $70,000 is an astronomical figure for what is essentially meant to compete with a Toyota Corolla or a Ford Focus. That’s Cadillac ELR or Tesla Model S money, but here’s the most fascinating part: The fact that Toyota has been able to get a fuel cell vehicle on the road for less than $100,000 is remarkable. Its first hydrogen prototypes, for example, ran well over $1 million per unit.
Yet the Tesla and ELR also have something that the FCV lacks inherently: looks that help warrant the stratospheric price. Tesla can charge $70,000 for the Model S because it looks like a $70,000 car. The FCV, however, does not — it’s clearly sitting on an economy car level, though its sticker plays with the likes of Porsche, Mercedes, Tesla, BMW, and so on. And even on the compact car front, the FCV isn’t exactly a formula that may appeal to American consumers.
I don’t claim to be an auto business strategist or expert, but here’s what I foresee as being a problem for Toyota once the FCV hits the market: Had this car been badged as a Lexus, it would have made the leap in price that much more bearable. But Toyota followed the same formula that dogged the EV industry for years: It took the most expensive powertrain and shoveled it into the cheapest car possible in order to lower the price for consumers. It’s an understandable model, but it can easily go awry, resulting in things like a $70,000, Corolla-rivaling sedan.
But if that powertrain found its way into a car like the Lexus ES or even the CT 200, than charging such amounts would seem more reasonable. Further, it would put a more premium face on the so far nearly nonexistent segment that Toyota is pinning its future on. Of course, that doesn’t fit into Toyota’s model — the idea is that it will be a mass-produced car that, one day, will appeal to the everyday consumer. And everyday consumers identify more with Toyota’s badging, rather than Lexus.
There are certainly advantages to greater adoption of fuel cell vehicles: the only emission from the cars is water, they are refueled far faster than plug-in electric cars, hydrogen is the most abundant element on earth, and beyond. However, its greatest challenges lay in no supporting infrastructure, high costs, and consumer apprehension — all of which are solvable, but challenges nonetheless.