Toyota Consciously Uncouples From Tesla, Choosing To Focus On Fuel Cells

May 13, 2014

In 2010, Toyota teamed up with Tesla to develop electric cars. According to Green Car Reports and the New York Times, that partnership will soon expire, and Toyota isn't planning to renew it.

Why? Because Toyota has seen the future, and it doesn't involve conventional battery electric vehicles. For Toyota, the forecast is for hydrogen fuel cell cars. 

FUEL CELLS VS. BATTERY ELECTRIC VEHICLES

If you've been following along at home, this may not be much of a surprise. The first sign of trouble came when Toyota's RAV4 battery electric vehicle -- co-developed with Tesla -- failed to perform on the sales floor. Then, Toyota and Honda both announced plans to debut hydrogen fuel cell vehicles as early as next year. Add those facts together, and you had a couple of strong hints that Toyota planned a conscious uncoupling from Tesla. 

In practical terms, though, abandoning electric cars (which are powered by batteries that need to be recharged) in favor of fuel cell vehicles (which are also run on batteries, but which are juiced by hydrogen) is a long shot.

For starters, there's practically no hydrogen infrastructure to speak of, meaning that refueling fuel cell vehicles will be difficult for consumers. The average range of fuel cell vehicles in test fleets is vaguely comparable to that of conventional gas-powered cars, so adding significant numbers of fuel cell vehicles could mean adding almost as many hydrogen stations as there are gas stations. (For reference, there are upwards of 175,000 gas stations in the U.S., and hydrogen stations cost more than $1 million each to build.)  

Also, battery technology is improving, and it's likely to make exponential jumps once Tesla's gigafactory comes online. How this technology will evolve remains to be seen, but it likely means better batteries that hold more energy and are quicker to recharge than today's varieties. For consumers, that will mean much less time plugged into walls and far more time enjoying the open road (or the daily commute).

In child development metaphors, battery technology is walking well and learning to run, while hydrogen fuel cells are still wobbly standing at the edge of the crib. So, why would Toyota bail on batteries now? 

OUR TAKE

We agree that battery electric vehicles, like are -- like hybrids -- a messy middle step between combustion engines and fuel cells. Yes, they're cleaner than hybrids, but they still depend on electricity, which is, in many cases, produced by dirty fossil fuels. With an increasing number of regulations directed at the auto industry and the environment, hydrogen fuel cells are, for now, the greenest of many options, and they may well become mainstream in the future. 

To us, that future is decades away, but Toyota clearly has a more optimistic view. Perhaps it's lined up a new battery partnership. Perhaps it knows something we don't about a coming breakthrough in hydrogen technology. Or perhaps it's simply confident that it can bide its time by producing increasingly efficient hybrids until making the jump to hydrogen, skipping the middle bits altogether. 

What we do know is that you can find a much deeper discussion of these issues at our colleagues' blog, Green Car Reports

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