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Want a Hydrogen-Fueled Car? It'll Cost You Double

If the fuel isn’t any cheaper -- indeed twice as expensive today -- will the car be any cheaper?  We don’t know because Toyota has not announced prices yet.

A Prius costs the average American $960 per year to run in terms of fuel -- 12,000 miles at 50 mpg and $4 per gallon.  Toyota’s hydrogen car would cost just over twice that amount -- $2,000.  How much less would you need to pay for the privilege of paying twice as much for fuel, or approximately $1,000 extra per year?

There is no exact answer to this, but Toyota could probably get away by charging as much as $15,000 for the hydrogen car, in terms of the point where a consumer might be interested given the rationale of the economics.  Somehow I don’t think Toyota’s hydrogen car will be anywhere near $15,000.  It might be $30,000 or $50,000 or somewhere in-between.  The price in Japan, with their taxes included and more expensive market in general, is closer to $69,000.

I have no idea who would want to buy a car with fuel costs twice as high as the Prius, while paying an up-front premium to the Prius.  It would have to be at least $10,000 less, not tens of thousands more.

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Obviously there is a way to make up for this fuel cost disadvantage. Theoretically, the car could be nicer to drive than other cars.  It’s pretty clear that it will drive better than a regular gasoline car because the hydrogen car is basically an electric car -- except with a very small battery and two hydrogen tanks instead.

However, it would not have any drive quality advantage over an electric car.  The first iteration will not even accelerate as quickly as the more popular electric cars today.

In principle, a hydrogen car combines the smooth operation of an electric car, with the refueling convenience of a regular gasoline car -- 300 miles in less than four minutes.  Given that the fuel will be twice as expensive as it would be driving a Toyota Prius, people had better appreciate this electric car-like smoothness!

In addition, as was already well-known, hydrogen faces a massive infrastructure build-out hurdle.  Tens of thousands of stations are necessary, possibile hundreds of thousands world-wide.  The point of this article is simply this: To what end?  If the fuel, even at the end of the rainbow -- a decade or two from now -- will only be at par with gasoline, why bother?

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