Hydrogen fuel-cell car push 'dumb'? Toyota makes a case for the Mirai

TOKYO (Reuters) – Having invested heavily in hydrogen, a technology derided by Tesla chief Elon Musk as “incredibly dumb”, Toyota Motor Corp is making a renewed push for fuel cell cars to fill a role in a future dominated by electric battery vehicles.

FILE PHOTO – The Toyota Mirai, an hydrogen fuel cell vehicle, is displayed on media day at the Paris auto show, in Paris, France, September 29, 2016. REUTERS/Benoit Tessier/File Photo

Japan’s biggest automaker believes both technologies – all-electric battery cars like the Tesla Model X on one hand and Toyota’s hydrogen Mirai on the other – will be needed to fully usurp gasoline cars. 

“We don’t really see an adversary ‘zero-sum’ relationship between the EV (electric vehicle) and the hydrogen car,” Toyota chairman Takeshi Uchiyamada told Reuters ahead of the Tokyo auto show. “We’re not about to give up on hydrogen electric fuel-cell technology at all.”

Toyota began pitching its fuel-cell car as a mainstream gasoline car alternative in 2014 when it launched the Mirai with a price tag of 7.24 million yen – almost $ 70,000 at the time.

The car has since been launched in the United States and other countries around the world. But initial excitement has faded as major markets including China and Europe have tilted heavily toward electric vehicles.

Just 4,300 Mirais have been sold, compared to around 4 million units of the Prius, Toyota’s blockbuster hybrid that ushered in the age of the EV.

Uchiyamada, who is known as the “father of the Prius”, says Toyota isn’t anti-EV and is investing heavily in technologies such all solid-state lithium-ion batteries to make them more desirable.

But it also sees some advantages for hydrogen cars, which are propelled by electricity generated by fuel cells.

One major issue facing EVs is the length of time they take to charge – up to 18 hours in some cases – and a problem being amplified as automakers pack in more batteries to extend range.

Rapid charging technology is helping to solve this issue. But a 30- to 40-minute wait is still too long for many ordinary drivers with busy lives, says Yoshikazu Tanaka, the chief engineer in charge of Toyota’s Mirai.

What’s worse, rapid charging when used too often compromises battery life significantly, he and other engineers say.

While a hydrogen car can refuel in under five minutes, the high cost of the technology and a lack of refuelling stations is a problem, something Toyota has been focused on addressing.

The company has joined forces in Japan with rivals Nissan Motor Co and Honda Motor Co, and with energy companies such as JXTG Nippon Oil & Energy to build a network of refuelling stations that now totals 91.

FILE PHOTO – The Toyota Mirai, Toyota Motor Corporation’s first commercially available, mid-sized hydrogen fuel cell sedan, is seen at a press preview in Newport Beach, California, November 17, 2014. REUTERS/Lucy Nicholson/File Photo

Tanaka also wants to significantly extend the car’s driving range to compensate for the lack of fuelling stations.

While still at the concept stage, Tanaka wants to raise the “practical driving range” of the Mirai to about 500 km (310 miles) from the current 350-400 km (190-250 miles). A fuel cell car’s practical range usually dips to 65-70 percent of its “sticker” range – 650 km for the Mirai – because drivers often use air-conditioning and accelerate with abandon.

Making the fuel cell system more efficient and trying to gain more propulsion power from a given amount of hydrogen will be key, Tanaka said. He also wants to package the vehicle more efficiently to gain more storage space for larger fuel tanks.

CHINA HOPES

Toyota says one of the most promising markets for hydrogen cars is China – a key advocate of electric cars but one which is beginning to embrace fuel-cell technology as well.

Last month, Shanghai announced plans to promote development of fuel-cell vehicles by adding hydrogen refueling stations, subsidizing companies developing fuel-cell technologies and setting up R&D facilities. The city’s goal is to put 20,000 hydrogen fuel-cell passenger vehicles and 10,000 commercial vehicles on the road by 2025.

”Chinese policymakers visit us and we visit them frequently” to discuss Toyota’s hydrogen fuel-cell technology, says Katsuhiko Hirose, a green tech engineer at Toyota. 

Toyota was set to test hydrogen fuel-cell cars in China this month as part of an effort to determine the feasibility of selling the Mirai there.

But it’s not all just about cars.

In an effort to encourage other industries to use hydrogen, Toyota and Air Liquide S.A. helped set up the Hydrogen Council, a global lobby launched in January on the sidelines of the World Economic Forum in Davos.

With 27 members including automakers Audi, BMW, Daimler, Honda, Hyundai, and energy companies such as Shell and Total, the Hydrogen Council has lobbying policymakers and investors on hydrogen.

The council’s main argument is that electricity supplies can be limited and unstable in high demand. That’s because power grids have small buffers as electricity cannot be stored easily and transported. Large-scale adoption of hydrogen can solve that issue, said Toyota’s Uchiyamada, who is also co-chair of the Hydrogen Council. 

Electricity generated during the night, which usually goes to waste when unused, and electricity generated by solar and windmills can be stored and easily transported as liquid hydrogen, much like gasoline.

“Elon Musk is right – it’s better to charge the electric car directly by plugging in,” said Tanaka. But hydrogen has a place as a viable alternative to gasoline, he added.

Reporting by Norihiko Shirouzu; Editing by Lincoln Feast

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Toshiba weighing options in case chip unit sale not completed by March

CHIBA CITY, Japan (Reuters) – Toshiba Corp (6502.T) said it is considering various measures in case the $ 18 billion sale of its chip unit does not close by the end of the financial year and leaves the embattled conglomerate short of funds needed to ensure it stays listed.

FILE PHOTO: The logo of Toshiba is seen as a shareholder arrives at Toshiba’s extraordinary shareholders meeting in Chiba, Japan March 30, 2017. REUTERS/Toru Hanai/File Photo

The deal needs to close by end-March or Toshiba will likely report negative net worth – where liabilities exceed assets – for a second year running. That could trigger an automatic delisting from the Tokyo Stock Exchange.

“Nothing has been decided, but it’s true that we are considering potential measures,” CEO Satoshi Tsunakawa said at an extraordinary general meeting where shareholders approved the sale to a consortium led by Bain Capital LP.

Proceeds from the sale are crucial to cover billions of dollars in liabilities arising from the conglomerate’s now bankrupt U.S. nuclear unit Westinghouse.

But a deal was only agreed last month after a long and contentious auction, and chances are high that it will not receive regulatory approvals by end-March as such reviews usually take at least six months.

Tsunakawa did not elaborate on what measures Toshiba may take but his comments follow the Tokyo Stock Exchange’s decision this month to remove the firm from a special watchlist which had prevented it from issuing new shares on the market.

Analysts believe, however, that ordinary investors are unlikely to get behind a firm that lurched from a 2015 accounting scandal to a full-blown financial meltdown last year.

“It may issue preferred shares worth several hundreds of billions of yen to investors such as Bain Capital or it might ask its banks for debt-to-equity swaps,” said Kentaro Harada, a credit analyst at SMBC Nikko Securities.

The sale of the unit – the world’s No. 2 producer of NAND semiconductors – is also facing legal challenges from Toshiba’s chip joint venture partner Western Digital (WDC.O), which opposes any deal without its consent and has sought an injunction with the International Court of Arbitration.

Toshiba said in a statement on Tuesday that it “remains fully determined to resolving the issue through the arbitration process.”

Harada said that if Western Digital did gain an injunction order, that could harm banks’ willingness to provide Toshiba with any further financial support.

In addition to the chip unit sale, shareholders also approved Toshiba’s earnings report for the past business year and the appointment of 10 executives to the board, including Tsunakawa and seven other incumbent board members.

The earnings report has been controversial.

Filed in August after months of delays, it received an unusual “qualified opinion,” or limited endorsement, from Toshiba’s auditor, which said it thought Toshiba was late in booking losses at its Westinghouse unit. Proxy advisory firms Glass Lewis and ISS had recommended this month that Toshiba’s shareholders should not give their approval given the auditor’s mixed review.

Japan’s securities watchdog is also investigating accounting in its earnings report to see if it properly handled losses incurred by its U.S. nuclear unit, a source with knowledge of the matter has said.

Reporting by Makiko Yamazaki; Editing by Edwina Gibbs

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