Toyota, BMW gamble on lukewarm hydrogen market

Toyota and BMW have deepened their mutual commitments to hydrogen, promising to launch next-gen fuel cell electric vehicles (FCEV) and supporting a global refueling network.

Driving the news: This week, Toyota and BMW announced plans to work more closely on hydrogen technology. The partnership, an evolution of the two brands’ 2011 agreement to collaborate on eco-friendly vehicles, has two primary objectives, with the long-term goal of creating a “hydrogen society.”

• First, the automakers will design a third-generation FCEV system for use in both Toyota and BMW models, with the latter introducing its first mass-produced hydrogen vehicle in 2028.

• The companies then plan to coordinate with hydrogen suppliers to lower production costs and make refueling more accessible to consumers.

Behind the scenes: Toyota and BMW face an intense uphill battle if they hope to achieve their hydrogen goals.

• Pure or elemental hydrogen, the kind needed for fuel cell vehicles, is rare and difficult to produce, especially without the release of greenhouse gases.

• Hydrogen refueling facilities are also hard to find. Less than 1,000 stations were operational worldwide by the end of 2023.

• Roughly 50 of these are in California following Shell’s closure of seven stations earlier this year. Only a few stations are located or planned in the rest of the U.S.

• Meanwhile, Toyota’s previous FCEV, the Mirai, is the subject of a new lawsuit. Plaintiffs claim the automaker misled consumers on the strength of California’s hydrogen supply chain.

Bottom line: It makes sense that these investments into hydrogen are arriving during a time when alternative fuels are growing in popularity. At the same time, it’s not clear whether fuel cell vehicles are a viable alternative to electric-only models. At the very least, the sector has immense challenges to overcome before we see the “hydrogen society” envisioned by the likes of Toyota and BMW. That being said, while it doesn’t seem likely the industry’s future will align with FCEVs, that could change if more automakers rally behind hydrogen.

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