Toyota's hydrogen chief warned that vehicles powered by green fuels could suffer the same fate as battery-powered electric vehicles, and Chinese groups quickly dominate supply chains and exports unless other countries step up investment in technology.
Mitsumasa Yamagata, president of the hydrogen arm of Japanese automaker, said China is leading the infrastructure of hydrogen trucks, reducing fuel costs to a third of Japan's rapid construction of gas stations. China already accounts for most of the world's hydrogen commercial vehicles sales.
“All stakeholders who move immediately are the most important thing to reduce the cost of hydrogen,” Yamagata said. “China is the most advanced hydrogen truck in the world. The reason why they are advanced is that the Chinese government has ordered the transformation of major logistics routes into hydrogen highways.”
Hydrogen fuel cells (which generate electricity through chemical reactions with oxygen that emit only water vapor) offer great hope for long-distance transportation, as the batteries are considered too heavy and require too much charging for commercial vehicles.
Asian automakers, including Toyota and Hyundai, bet that hydrogen is the fuel of the future, even as battery-powered vehicles take off and narrow market opportunities for colorless natural gas.
But it turns out to be aware of cheap, clean fuel production, building gas stations and producing low-cost hydrogen cars. The future of major infrastructure projects is doubtful as costs surge and subsidies are considered insufficient.
The risk of U.S. funding for hydrogen projects could be cut under President Donald Trump, Japan's plans for subsidies for hydrogen roads and imported fuels have been moving slowly, and auditors say the EU's goal is to produce and import 10 million tons of renewable hydrogen, which is "unrealistic" by 2030.
Even in China, the role of hydrogen in commercial transportation cannot be ensured. Sales of battery-electric trucks and buses have been growing rapidly, helping zero-emission commercial vehicle sales reach a peak of 230,000 in 2024, according to the International Clean Transport Commission.
Yamagata said that batteries and hydrogen vehicles are "transitional" technologies, but battery-powered vehicles push the grid to a break point, which is not suitable for heavy loading at long distances, requiring multiple decarbonization solutions.
According to interactive analysis by data providers, China's sales of hydrogen fuel cells and trucks in 2024 are higher than sales in all other parts of the world, with sales of 7,069 vehicles in the region.
Chinese state media touted the launch of the country's first cross-regional hydrogen truck route last month, spanning 1,150 kilometers between Chongqing and the southern ports of Qinzhou.
Yamagata said China's hydrogen costs between 500 and 1,000 yen ($3.50 and 7) per kilogram in Japan and 2,000 yen in the dollar, although part of this advantage is due to the production of fuel as a by-product of steel production.
The head of Toyota Hydrogen said China's leading position is not impeccable, but urgent action is needed. "We don't have much time - it's important to speed up quickly," he said.
Toyota is the world's largest sales automaker and has been the industry's foremost hydrogen car supporter, and the technology has grown for more than 30 years since its launch in 2014 and has sold 28,000 Mirai fuel cell vehicles. BMW and Honda are also pursuing this technology.
As battery-electric vehicle sales took off, Toyota's expectations for hydrogenation completely changed the expectations of the auto market, but the Japan Group is heading towards making its fuel cell technology successful in the truck and bus markets.
It recently released its third-generation hydrogen fuel cell, which can last until diesel engines and can be installed as a single unit in a commercial vehicle, helping to reduce costs.
Toyota believes its hydrogen bet will pay off like years of pursuit of hybrids. In China, it plans to compete for market share through joint ventures with local companies. Last year, it opened a factory in Beijing that can produce up to 10,000 fuel cell systems per year.
Yamagata said Toyota will use the Chinese market as a "Dojo" to study its technology before pushing it to the rest of the world.
“By perfecting our products in China’s tough market environment, we will release competitive products in Japan, Europe and the United States,” he said.