I believe the $50,000 price figure for Toyota hydrogen fuel cell vehicles in 2015 that was reported in a Bloomberg article last month by Alan Ohnsman is much higher than the high-volume figure (i.e. if at least a couple hundred thousand vehicles were produced) would be.
Let me explain…
Lots of evidence that the high-volume price of hydrogen fuel cell vehicles would be much lower in 2015
The title of Alan Ohnsman’s Bloomberg article on May 6th is “Toyota Targets $50,000 Price for First Hydrogen Car.” And as you can see at the following link, which is a Google search of “Toyota, hydrogen car, 2015, $50,000″, the $50,000 figure has spread around the Internet.
The problem is that this is a low-volume figure which is misleading to people who likely view this as a high-volume figure.
Here is evidence from other car companies that the high-volume figure will be much lower than $50,000 in 2015:
1. Ironically, here is an excerpt from a Bloomberg article that was written by Alan Ohnsman on October 9, 2009:
“GM, Toyota, Honda Motor Co. and Daimler AG say durability improvements and cost reductions may enable them to sell the zero-emission vehicles by 2015. Costs to make the fuel-cell cars have fallen from $1 million each a few years ago, and automakers are working to meet a proposed goal of slashing the premium for the cars to $3,600 more than a midsized gasoline model.”
2. Daimler CEO Dieter Zetsche discussed the cost of hydrogen fuel cell vehicles in the following excerpt from a Spiegel (Germany) article that was published in March 2009:
“But the question remains: When will hydrogen-fueled cars be mass-produced and affordable? Zetsche says that annual production of the new vehicles would have to reach 100,000 and that by around 2015, the vehicle prices could match those of conventional cars.”
3. Hyundai/Kia said in July 2009 that hydrogen fuel cell vehicles produced at that time would cost $50,000 if 50,000 units were made each year. Furthermore, a key point to mention is that Hyundai/Kia did not start researching hydrogen fuel cell vehicles until 2000.
But Toyota started their hydrogen fuel cell program back in 1992 (Daimler started their program in 1994). Moreover, Toyota invests nearly one million dollars per hour on future technologies. Therefore, Toyota should be at least as far along as Hyundai is.
Bill Reinert from Toyota being very critical of hydrogen fuel cell cars a few years ago…
Toyota has a history of downplaying their hydrogen fuel cell program.
The movie “Who Killed the Electric Car?” (2006) was on TV two nights ago. I saw it was on when the movie was about half over. And I ended up watching most of the rest of the movie including the part where hydrogen fuel cell cars are criticized.
You can see the discussion about hydrogen fuel cell cars from minute 4 to minute 10 in the YouTube video below which is part of the movie.
Here are various statements that Bill Reinert from Toyota (one of my favorite people in the hydrogen industry) made in this segment. I’m guessing the interview was probably done in 2005 since the movie was released in the middle of 2006.
1. Question from reporter (starting at 5:44 in the video below): “Consumers are probably going to want to know how long it would be for this (Toyota hydrogen fuel cell car) to be mass produced?”
Response from Bill Reinert: “That’s quite a ways off. We’ve got some real technical issues we’ve got to solve with hydrogen storage, durability, with cost reduction.”
2. Question from other reporter (starting at 5:56 in the video below): “Is it a practical solution at this point?”
Response from Bill Reinert: “The cars have a limited range, the durability of the cars isn’t so very good and the…let me see, what else? Oh, they don’t do well in cold weather. Other than that, they’re great. (Bill Reinert laughs.)”
3. Bill Reinert comment (starting at 9:20 in the video below): “These (hydrogen fuel cell cars) could be a long ways out into the future. Toyota says: ‘Fuel cell cars, 30 years away.’”
…But now Toyota is talking A LOT differently about hydrogen fuel cell cars
It’s pretty hard for me not to laugh when I compare what Bill Reinert said in the movie with what Toyota is saying now which can be seen below which is my post the “7 reasons to love Toyota hydrogen fuel cell vehicles”:
(Please note that many of these developments were announced in 2007-2009 which was only ~2-4 years after the Bill Reinert interview, so I believe he probably knew that a lot of these things were going to happen.)
Here are 7 reasons to love Toyota hydrogen fuel cell vehicles (which the company started developing in-house back in 1992 when I was a senior in high school):
1. 431-mile real-world driving range with Toyota FCHV-adv (mid-size SUV) hydrogen fuel cell vehicle (See the following YouTube video)
2. 68.3 real-world miles per kilogram fuel economy with Toyota FCHV-adv (See the following YouTube video)
3. Ability to operate in temperatures as low as minus 35 degrees Fahrenheit (minus 37 degrees Celsius)
4. Irv Miller, TMS group vice president, environmental and public affairs, made the following comment on August 6, 2009:
“In 2015, our plan is to bring to market a reliable and durable fuel cell vehicle with exceptional fuel economy and zero emissions, at an affordable price.”
5. Masatami Takimoto, a Toyota executive vice president and board member, made the following comment about hydrogen fuel cell vehicles in January 2009 at the North American International Auto Show:
“By 2015, we will have a full-fledged commercialization effort.”
6. The Toyota FCHV-adv (Highlander) hydrogen fuel cell vehicle has the same trunk and passenger space as the gasoline-powered version.
Click on the following link to see a picture of the trunk in the Toyota FCHV-adv hydrogen fuel cell vehicle.
7. Here is a comment made by Justin Ward, advanced powertrain program manager-Toyota Technical Center, in a Ward’s Automotive article (subscription required) that was published on July 16, 2009:
“We have some confidence the vehicle released around 2015 is going to have costs that are going to be shocking for most of the people in the industry. They are going to be very surprised we were able to achieve such an impressive cost reduction.”
In my opinion (and there is no way I can prove this), Bill Reinert from Toyota was downplaying the Toyota hydrogen fuel cell program when he was interviewed for the “Who Killed the Electric Car?” movie.
Benefits of downplaying
Why would Bill Reinert want to do this?
Just ask yourself these two questions:
1. Are competitors likely to increase or decrease their focus on hydrogen fuel cell vehicle research and development if they hear Toyota (arguably the top car company at the time) saying the technology is a long way off?
2. Are customers more or less likely to buy a new car powered by gasoline if they think hydrogen fuel cell cars are a long way off?
If I’m seeing this correctly, this was a very shrewd business move. Toyota would end up making more money in the short-term and the long-term. And when you follow the money, a lot of things make sense.
How this relates to the Toyota $50,000 price figure for 2015
People should keep all of this in mind when thinking about Toyota’s recent comment in a Bloomberg article last month by Alan Ohnsman about the price of hydrogen cars possibly being $50,000 in 2015.
In the article, Toyota said a small number of vehicles would be produced and the company would set a price where money would be made on the vehicles.
Here is the key point:
In my opinion, the price would need to be this high (i.e. $50,000) if only a small number of vehicles are produced. But I believe the price could be A LOT lower (i.e. likely around the price of a hybrid) if hundreds of thousands of vehicles are produced.
Here is the most important sentence in the Bloomberg article:
“Shifting from low-volume assembly to mass-scale production would lead to further cost reductions, he said.”
Perhaps the reporter should have focused on this issue A LOT more?
Furthermore, I suggest reading the comment above by Justin Ward from Toyota where he says that Toyota feels like they are going to have hydrogen fuel cell costs in 2015 that are so low that it will be “shocking” to most people in the auto industry.
And take a look at the statement above by Irv Miller from Toyota where he says the company plans on selling an “affordable” hydrogen fuel cell vehicle in 2015.
Would a $50,000 hydrogen fuel cell vehicle in 2015 shock most people in the auto industry?
No
Is $50,000 affordable?
No
Along the same lines as question #2 above, I think this can be explained by asking yourself the following question:
Are customers more or less likely to buy a new car powered by gasoline today (instead of waiting to buy a hydrogen fuel cell car in 2015) if they think hydrogen fuel cell cars will cost $50,000 in 2015 instead of a much lower figure?
Final thoughts
With the BP oil spill being yet another reminder of the consequences of oil, reporters who write about alternatives to oil have an ethical responsibility to present the facts about alternative technologies in clear terms.
And readers need to think a little more before buying into headlines.
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