Toyota is aiming to win back a leading green carmaker image gained initially through its Prius sub-brand, whose popularity has waned in recent years as Tesla has taken the mantle.
As outlined in an interview with Forbes, Jim Lentz, CEO of Toyota North America observed that the Prius was once recognized for bringing hybrid electric vehicles to the world and for making green cars a viable option for car shoppers.
Since 1997 the automaker has sold 8.5 million hybrid vehicles, including 5.4 million Prii – far more than any other automaker and representing a lot of fuel saved.
But the automaker which killed off a small electric city car in 2012 declaring battery electric technology not ready for prime time has challenges now.
As the Tesla Model S has taken off in sales, winning awards, and grabbing media attention, Toyota has been turning its attention from hybrids to hydrogen. Toyota is putting all its bets on its Mirai hydrogen fuel cell car and is selling its claimed advantages over electric vehicles.
Toyota’s advertising focuses on the Mirai’s benefits – and the fact that it’s also powered by electricity. The Mirai emits only water; it can be refueled in about five minutes versus several hours at a 240-volt electric vehicle charger; and it has a driving range of 312 miles, comparable to a gasoline-powered car.
“Consumers, while I think they love the idea of a high-tech car that’s very green, they still want a car that acts like what they are driving today,” said Lentz. “Being able to pull up to a fueling station and fill the tank in five minutes is a huge plus” for hydrogen-powered cars, he said. “Even supercharging of EVs isn’t realistic. You have to wait 30 minutes.”
Toyota faces steep challenges in making the Mirai as popular as the Prius. There are only 16 retail hydrogen filling stations in the U.S. (mostly in California), a number that expected to grow to more than 30 by year’s end. There are also technical and regulatory issues the Mirai and other fuel cell vehicles will need to pass through, such as the safety of hydrogen compared to other fuels.
Another challenge is a fundamental branding problem. Tesla CEO Elon Musk has been setting the pace in news and social media.
“When you talk about electric cars, most people jump to Tesla,” said Jez Frampton, global chief executive of Interbrand. “The car industry has all the capability to beat these upstarts. And yet they seem to have grabbed people’s imagination. That lays a significant challenge at Toyota’s doorstep.”
The Toyota Mirai will be competing with more high-end car purchases such as the Model S than it will be with the more affordable Tesla Model 3. At $57,500 the Mirai is almost half the price of the top-end Model S. State and federal incentives can take off an additional $13,000.
Leasing programs on the Mirai are available for $500 a month. For the hydrogen fuel, Toyota will even buy the Mirai owners fuel for three years under a promotional offer.
Toyota’s sales targets are minimal for now with 3,000 Mirais sold by the end of 2017 and 30,000 by 2020. Long-term, Toyota sees hybrids and fuel cell cars as the way to go for leadership in green car sales. Toyota says that battery-electric vehicles have serious constraints in costs and driving range for the foreseeable future. Toyota believes there will be an inevitable switch over to hydrogen fuel cell vehicles years from now.