Japan was one of the first countries in the world to formulate a national hydrogen strategy, pledging back in 2017 to innovate production, transport and storage technologies related to the cleaner fuel, which produces only water when burned.
(Bloomberg) — Japan was one of the first countries in the world to formulate a national hydrogen strategy, pledging back in 2017 to innovate production, transport and storage technologies related to the cleaner fuel, which produces only water when burned.
Almost seven years on, things aren’t turning out entirely as politicians may have hoped.
MK West Group, a taxi operator in Kobe, a city on Osaka Bay in central Japan more famed for its heavily marbled beef than its passenger cars, is a case in point.
The company, an upmarket operator that runs a fleet of luxury vehicles and prides itself on smartly dressed drivers who see themselves more as chauffeurs, also has a suite of greener cars including hybrid versions of Toyota Motor Corp.’s Crown, Camry, Alphard and Lexus models.
About two months ago, it added two Toyota Mirai hydrogen fuel cell vehicles to the mix. According to Group President Yoshiaki Aoki, the experience has been somewhat underwhelming.
It’s not that there’s anything wrong specifically with the cars, which are good-looking mid-size sedans with Lexus-level accoutrements. Rather, it’s the high cost of hydrogen, which Aoki says should be subsidized more aggressively if the government is serious about using the fuel as a greener option.
Two months into using the hydrogen fuel cell vehicles, the cars aren’t cost-competitive compared to gasoline ones, Aoki said.
The cars’ biggest selling point is they can be refilled, super quick — handy for a taxi company where having drivers idle means money lost. The Mirais take three to five minutes to have their tanks replenished, giving them a leg up over electric vehicles that take at least 30 minutes on a fast-charger.
But compared to a hybrid car, for example, the cost of a hydrogen fuel cell vehicle rises by around ¥1 million ($7,100) if it runs 150,000 kms a year as a taxi, Aoki said.
“You’d have to be crazy to buy a FCEV, even considering the environmental angle,” he said. “And customers aren’t prepared to pay extra money because the taxi they’re using is good for the environment.”
Still, Aoki hasn’t completely written off hydrogen fuel cell vehicles just yet. He says he hasn’t figured out whether he’ll prefer FCEVs or EVs longer term, and that decision will likely come down to cost, the infrastructure supporting both technologies and available models.
Considering taxi drivers are on the road almost 24-7, requiring lots of fuel, if the high cost of hydrogen doesn’t come down significantly, Aoki says that as better electric models surface, MK West will probably switch more of its fleet to EVs, even if they do take longer to charge.
As something of car buff, Aoki also bemoans the lack of FCEV models available. He’s pinning some hopes on Toyota’s new FCEV Crown, a five-seater sedan set to be released later this year.
Aoki also believes that were individual drivers to embrace hydrogen fuel cell cars, the infrastructure in Japan would be “built in no time,” with the help of energy companies like Idemitsu Kosan Co. and Eneos.
MK West for its part has a hydrogen station near its headquarters that was installed by Air Liquide SA. About three other cars on top of MK West’s two come there almost every day to fill up, Aoki said, which isn’t much considering Mirai’s first model went on sale almost a decade ago.
Yoshihiro Ueno, a senior executive manager at Air Liquide in Japan, said the company built the station there to make it easy for taxi drivers to refuel as they come back to base. “This also solved any infrastructure-related concerns for the taxi operator,” Ueno said.
But more broadly, “most companies operating hydrogen stations for mobility purposes aren’t in the black because there’s no market for it yet,” he said. There are only around 8,000 hydrogen-powered passenger vehicles in Japan, a minuscule portion of the some 80 million cars on the nation’s roads.
Hydrogen providers do get subsidies from the government to cover station installation and operation costs, but there isn’t sufficient policy direction from Japan’s current ruling party, and it’s become “a chicken-and-egg problem,” Ueno said.
“There’s no demand so there are no stations, and there are no stations so there’s no demand, and this has been going on for quite some time,” he said. “Something has to break through.”
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