The Sole Battle of Japan for Hydrogen Powered Cars

Most of the world is going mad for electric vehicles (EVs) in the hope that they will diminish car emissions and will end reliance on fossil fuels. In the meanwhile, in Japan, top automakers, such as Toyota and Honda, are curiously betting on hydrogenpowered cars, often referred as fuel cell vehicles (FCVs). Why are they doing so? Is the market appreciating their bet? Are they farsighted on the future of automotive market or is that a tremendous mistake? Today we will investigate on the reasons why these Asian automakers are pushing on FCVs technologies and how the market is reacting.

Despite the greater complexity and cost of the fuel cell technology, these carmakers are betting on hydrogen superior energy density compared with batteries giving to FCVs a decisive advantage in range. Indeed, FCVs don’t suffer the EVs’ main drawbacks of limited range and of long recharging time. If the Tesla Model S travels about 300 miles (480 kilometers) on a single charge only with the best driving condition, the Mirai can always run for 312 miles (502 kilometers) per fueling whatever the conditions are. Moreover, while Tesla Model takes at least 30 min to recharge partially, Mirai can be fueled up as quickly as a regular car.

Japan’s goal of Tokyo Olympics in 2020 run by hydrogen technologies is another reason for which Toyota and Honda are pushing on FCVs. Although in the past hydrogen cars have hit an unexpected obstacle due to some stringent Japanese regulations on hydrogen filling station,Prime Minister Shinzo Abe has recently made rewriting these rules a national priority. “To meet our goal of 40,000 fuel-cell vehicles on the road by 2020 we need a plan to accelerate the rollout of hydrogen fuelling stations,” he said in April.

However, international investors have recently shown an exceptional interest in EVs since both US and China are moving faster and faster towards this technology. By comparing the price growth of Toyota and Honda stocks with Tesla one, it is clear that the evolution of prices was similar until the end of 2016, while, from the beginning of 2017, Tesla has “detached” itself from the automotive sector reaching a higher path. We might conclude that in 2017 the market has shifted decisively towards the EVs believing in this technology as the predominant one for the next future even if, recently, Tesla announced delays in his blockbuster Model 3 causing a sharp correction in the stock price. Anyway, EVs are becoming a hot issue in the investment arena leaving in the shadows companies that are not investing on them.

Moreover, it is important to highlight that notall Japanese automakers are betting on FCVs. Manabu Satou, general manager of technology at Nissan, says that it is an “utter mystery” why anyone would be so engaged on fuel cells when China, the world’s biggest car market, is going for conventional EVs. “If it focuses too much on fuel cells, Japan is going to end up being super-ultra-Galapagos,” Ryuichi Kino, who has written about electric vehicles and energy, said it in relation to the risk of separation that Japan is running by focusing only on hydrogenous technologies. We will see soon how this battle will end up: EVs look well ahead but the astonishing developments that technology showed in the last 10 years leave the door still open for the hydrogen adoption in the future. The sole battle of Japan for hydrogen powered cars is only at the first stage and we will understand soon the size and the consequences of this bet.

Matteo Zocca & Niccolò Pardelli