* Toyota unveils fuel-cell car to be sold in Japan, U.S. and
Europe from 2015
* Toyota's hydrogen car to sell for about $70,000 in Japan
* Japan government promises subsidies to cut vehicle prices,
to promote infrastructure
(Updates with Toyota announcement on fuel cell vehicle launch
in paragraph 2)
By Yoko Kubota and Maki Shiraki
TOKYO, June 25 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
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
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
That will bolster plans by Toyota and Honda Motor Co
, Japan's No.3, to start fuel-cell vehicle sales in
"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
A fuel cell vehicle, running on electricity from cells that
combine hydrogen with oxygen, emits only water vapour and heat.
Hydrogen fuel production from hydrocarbons emits some carbon
dioxide, although Japan hopes to implement carbon-free
production by 2040.
Hydrogen vehicles can run five times longer than
battery-operated electric cars, and their tanks can be filled in
just a few minutes compared with recharging times from 30
minutes up to several hours for electric cars.
The challenges for fuel cell cars nevertheless remain
daunting and growth could be slow, especially given the expense
of building up an infrastructure of hydrogen fuel stations and
the likely reliance on subsidies until costs come down.
"Even after 10 years, fuel cell cars are likely to be less
than 10 percent of the Japanese market," said Ryuichiro Inoue, a
professor at Tokyo City University and an expert in the auto
"This isn't a strategy to talk about for the next 10 years,
but for the next 20 to 30 years."
Even Toyota only expects tens of thousands of fuel-cell cars
to be sold annually a decade from now as the new technology will
need time to gain traction.
The government's commitment to hydrogen vehicles in its
growth strategy, however, shows how far the technology has come
since Toyota and Honda began leasing fuel cell-powered cars in
Japan 12 years ago. Japan had set out bold predictions, later
abandoned as unrealistic, of putting 5 million fuel cell cars on
the road by 2020.
Engineers have since overcome a variety of technological
challenges, including cold-weather ignition glitches due to
water freezing and the need to reduce loadings of platinum - the
precious metal that fuel cells use as a catalyst.
Rivals such as South Korea's Hyundai Motor Co
and Daimler AG are also producing fuel-cell vehicles,
but Japan believes it will have an advantage after the UN
adopted many of its proposals for global fuel-cell safety
standards last June. This means it can avoid major changes to
fuel cell specifications for exports, keeping costs low.
Toyota, which astounded rivals 17 years ago by developing
the Prius hybrid car in barely two years and then swallowed
initial losses to establish its dominance in the segment, is
confident of its prospects in fuel cells.
"When we first introduced the Prius, there was little way we
could make a profit and our vision was longer-term, for the
second- and third-generation models," Toyota managing officer
Satoshi Ogiso told Reuters in March.
"Unless you are willing to accept losses initially, it's not
possible to increase sales."
($1 = 102.0500 Japanese Yen)
(Editing by Edmund Klamann and Rachel Armstrong)