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Toyota is betting big on the hydrogen for the long term. Its first fuel cell vehicles (like the Toyota FCHV pictured here at the 2008 New York Auto Show) may debut in 2015. Meanwhile it is scorning electric plug-in offerings.

Toyota plans on continuing to use less efficient nickel-metal batteries in its future Prius vehicles. It believes lithium-based batteries are too expensive for the efficiency gains they offer.
From battery chemistry, to electric vehicle adoption, Toyota isn't going with the flow

If you used industry-wide levels of interest in lithium-ion battery technology and electric vehicles as a barometer, both of these fields are at record highs.  In the U.S., the former "Big Three" -- GM, Chrysler, and Ford -- all have electric vehicles planned for release, with the GM's 2011 Chevy Volt being perhaps the biggest attraction.  In Germany, Daimler and child company Mercedes-Benz have both concepts and planned market EVs.  And in Japan, Nissan is gearing up to debut the electric-only 2011 Leaf EV.  All of these companies' electric efforts are driven by lithium-ion batteries, and these batteries are going in their hybrids as well.

The world's most successful vendor of electric vehicle technology, albeit in the form of mild hybrids, Toyota is going against the current on both of these trends, though.  In a new Bloomberg report aired concurrent with the Frankfurt Auto Show, it is revealed that Toyota extensively tested lithium-ion batteries as a potential replacement for the nickel-metal hydride batteries in its Prius and other mild hybrids.

What it found was that while the batteries were extremely efficient and didn't raise serious reliability or safety concerns, they were overly expensive for the gains they provided.  For that reason, Toyota reportedly concluded that the market wasn't ready for lithium and has decided to primarily continue with its nickel-based batteries for most of its hybrid cars.

Toyota also concluded that electric vehicles were too expensive to succeed in the current market.  Toyota Executive Vice President Takeshi Uchiyamada stated at a Frankfurt Auto Show press conference, "Electric vehicles of today are less costly than in 1990s, but if you compare them with the other vehicles out there they are still too expensive.  Unless there is a very big breakthrough in battery costs I don't think electric vehicles can take a large market share."

Toyota indicated that it will likely stay out of the electric vehicle market for close to a decade, the time it believes it will take for EVs to become profitable and affordable enough for the masses.

So is Toyota right?  It's hard to say.  Toyota's demonstration of business acumen over the last several years is hard to argue, given its ability to produce the first profitable mass-production hybrid, the Prius, which leads worldwide hybrid sales to date.  Furthermore, there are a handful of competitors, such as Germany's Audi, whose management are split on the viability of electric vehicles (Audi's North American president recently called buyers of the Chevy Volt EV "idiots"). 

On the other hand, the vast majority of the industry is shifting towards all electrics, and if Toyota counts on its competitors to lower production costs, it may find itself in a foreign hole when it finally decides to enter the market.  While some of the German automakers are pushing for clean diesel as a supplement or alternative to hybrids, Toyota is pushing hydrogen as a long term solution, a technology that faces significant production, transport, and storage obstacles -- all of which raise the price.  Toyota may release a fuel cell (hydrogen) car by 2015, according to recent reports. 

So for now Toyota is opting for one of the least expensive and most proven solutions (mild hybrids), while its mid-to-long term efforts focus on what is currently the most expensive and least proven solution of them all -- hydrogen.

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RE: I have to chuckle...
By bhieb on 9/16/2009 9:39:54 AM , Rating: 3
Agreed, the infrastructure is the #1 obstacle to hydrogen. Who wants a car they can only drive in certain parts of CA. Car makers are not going to invest until the infrastructure is there, and the cost of piping/tanking up the entire US with hydrogen is way to prohibitive.

Honestly I don't see how you can make the argument for hydrogen anytime in the near future, let alone the next 10-20 years. CNG is not 100% ready for mass adoption, but it is WAY closer than hydrogen.

RE: I have to chuckle...
By mars2k on 9/16/2009 10:24:48 AM , Rating: 2
Well it just so happens part of the Honda program in CA is getting a Hydrogen producing system for your home. It splits Hydrogen out of Methane and you refuel at home. Yes I know it produces CO2 but the rational is that the system overall releases less CO2 than internal combustion engines on their own. Plus methane is sourced locally.

There are other H2 production systems out there. The CA H2 infrastructure effort uses electricl powered hydrolysis. The fueling stations are actually producing H2 onsite using PhotoVoltaic arrays.

The same company that makes the H2 genrators make home sized units about as big as a washing machine. Interesting stuff really.

RE: I have to chuckle...
By Spuke on 9/16/2009 1:25:13 PM , Rating: 2
Well it just so happens part of the Honda program in CA is getting a Hydrogen producing system for your home.
How much do these stations cost?

RE: I have to chuckle...
By drmo on 9/16/2009 10:50:59 PM , Rating: 2
The solar one from CSIRO is supposed to be about $500 (eventially, whatever that means):
I seriously doubt that price is anywhere close to what it will really be.

The one from Honda can power your entire home from NG, but would run around $4000, hopefully.

I doubt somewhat that estimate on price (I only found the $4000 one place), but whatever; I don't think there are reliable prices out there yet.

If you can power your whole home and car from NG converted to hydrogen, then energy costs would run about 50% as that on gas and grid electricity (based on what Honda claims).

RE: I have to chuckle...
By Spuke on 9/17/2009 1:24:53 PM , Rating: 2
If you can power your whole home and car from NG converted to hydrogen
$4000 to power the entire home? That's pretty cheap compared to solar. I wonder how much NG a typical home would use. Thanks much for the info though.

RE: I have to chuckle...
By tapa on 9/18/2009 9:51:01 AM , Rating: 2
I don't think that's accurate. The home fuel station is an R&D project as far as I know. You can't get it for your home in California or anywhere else. Besides, it would have to be intended in the design of the home.

And it's useful to remember that there's enough hydrogen made in the US to fuel all the cars already. Trouble is, it's being used to produce gasoline. Naturally, it costs much lower than gas at the point of production. The only thing we don't have is the distribution system and affordable hydrogen vehicles.

These things can be solved.

RE: I have to chuckle...
By namechamps on 9/21/2009 9:22:06 AM , Rating: 2
Wonder what the cost to add limited H2 fueling to an existing gas station.

$10K? $100K?

If it is manageable then it may be upon the car companies to provide interest free loans, and partial grants for the first x number stations in the area. If the govt provided matching funds it could be enough to get the ball rolling.

I have 80 gas stations in my area. I don't need that many H2 stations. Just one near my work or home would be enough to start.

So initially the goal shouldn't be a H2 station on every corner but rather 10 stations or so per city in the 100 largest markets. That is 1000 stations which should be manageable if the car companies work together.

"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997

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