Is Toyota Making A Mistake By Betting Its Entire Future On Hydrogen?

Batteries are poised to take over the world. So why won’t Toyota invest in them?

Toyota left quite a few heads cocked to the side in confusion when it revealed that its strategy for tackling a future where the internal combustion engine isn't the dominant source of vehicular motivation would be hydrogen fuel cell technology. Given that it would be easier to join the majority and send piles of money to research and development offices with the interest of building a better electric car, the automaker is making a big bet by sticking to its guns and forgoing the temptation of building a Nissan Leaf fighter.

Bloomberg took a deep dive into the logic (or lack thereof) behind Toyota’s decision to stick with hydrogen despite being part of an industry that’s putting all its chips in batteries and electric motors. Surprisingly, the report concludes that even though Toyota stands to lose a lot if its gamble goes wrong, the Japanese automaker’s move may not be entirely as crazy as it seems. But crazy does describe how many see the decision. With countries and cities around the world forcing automakers to switch to propulsion sources that emit zero pollutants out the tailpipe, manufacturers are all jumping on the electric bandwagon. Just about every major automaker has stated that EVs will be the name of their game soon.

It’s because of this that EVs are expected to proliferate the market once their cost is on par with that of gas-powered cars—a shift that’s expected to take place in 2025. Buyers in China, the US, and Europe are all flocking to new fully electric models while governments and private companies install charging infrastructure to keep up with the demand. On the other hand, the push for hydrogen has hardly been felt. Batteries, it seems, are poised to rule the world. So how could Toyota benefit from breakthroughs in fuel cell technology? According to what Executive Vice President Didier Leroy said in an interview at last month’s Tokyo Motor Show, it will be with sales of hydrogen cars in parts of the world where electricity is not a viable a power source.

“We know, for example, that the fuel cells in the Japanese society will be much more than just cars,” Leroy said. “In many other places in the world, it will be the same.” Toyota has yet to back up that sentiment with hard numbers, but if its gamble pays off, it could leave the large automaker with a temporary monopoly on the technology while other companies play catch up.

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