Electric latecomer Toyota invests big in battery-powered vehicles

The Japanese automaker announced plans to invest US$13.6 billion in battery R&D, coming after Hyundai Motor's announcement of its two-pronged approach of investing in both battery and hydrogen power

Hyundai Motor’s hydrogen fuel cell electric vehicle, the Nexo (provided by Hyundai Motor Group)

Automobiles are a key field for anticipating the future of the hydrogen industry. Recently, the industry has been caught in a fierce debate over which is superior: hydrogen fuel cell electric vehicles (FCEVs) or battery electric vehicles (BEVs).

Both types of electric vehicles currently being produced by the finished automobile industry use electricity to operate their motors, but they differ in where their electrical energy comes from.

With a BEV, drivers charge their battery using a charging plug on their vehicle. With an FCEV, hydrogen is placed in a tank in the vehicle, with a fuel cell serving as a sort of generator that produces electricity as it combines with oxygen in the air.

The industry debate has been escalating since Toyota Motor Corp.’s recent announcement of plans for large-scale investment in its battery sector. Toyota was the world’s second automaker to mass-produce hydrogen vehicles — Hyundai Motor having been the first.

A relatively late starter in its transition to electric vehicles, Toyota announced plans on Sept. 7 to invest 1.5 trillion yen (US$13.6 billion) through 2030 in battery research and development and facility construction, with the aim of achieving battery production upwards of 200 gigawatt-hours annually.

Honda Motor Co., the world’s third-ranked hydrogen vehicle manufacturer, recently decided to halt production of the vehicles. Its decision was seen as based on the lower profitability of hydrogen vehicles, where sales have been weak due to the steeper price tag and fuel costs when compared with EVs and the lack of charging infrastructure.

The German company Volkswagen made the move relatively early on to go all in on BEVs rather than FCEVs. In a report published in 2019, the company said that while FCEVs have numerous advantages, including fast charging times without the need to store a heavy battery, their inefficiency in terms of energy and costs was a decisive strike against them.

Not all the major finished car makers have washed their hands of hydrogen.

BMW recently showed off its iX5 Hydrogen concept car at the IAA Mobility motor show in Germany. Like Hyundai, it is pursuing a strategy of both BEV and FCEV development.

Hyundai, which ranked first in FCEV sales globally this year with 5,300 units sold between January and July, has officially adopted a two-pronged strategy of producing and selling both BEVs and FCEVs.

“In comparison with Toyota, which has said it plans for major production of hybrid vehicles with internal combustion engines through 2030 at least, Hyundai’s strategy of focusing on both BEVs and FCEVs seems more in line with the recent eco-friendly trend,” said an official with a major automaker.

By Park Jong-o, staff reporter

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