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Japan proposes incentives to spur hydrogen fuel cell vehicle growth

As they did with electric hybrids over 15 years ago, Japan wants to jump-start the fuel cell market.

Japan is attempting to jump-start the market for hydrogen-powered cars. This week Prime Minister Shinzo Abe unveiled an plan that would spur growth in fuel cell technology if implemented.

In order to promote the development of fuel cell technology, Abe wants to give customers of such vehicles tax breaks and subsidies. Similar policies encouraged the spread of electric-hybrids in the past decade and half, giving them a 20 percent share of the Japanese new car market. According to Reuters, such incentives could drop the price of fuel cell cars to about $20,000 by 2025.

Abe also wants to loosen restrictions on hydrogen fueling stations in order to hasten the development of a fuel cell infrastructure. A network of 100 stations by April 2016, situated in urban centers, is the goal.

The call to action coincided with announcements by Honda and Toyota that they would be introducing fuel cell vehicles to the market by 2015. This is definitely a long-term move. Toyota began leasing fuel cell vehicles in 2002 and expects that by 2024, only tens of thousands of will be on the streets. As with the Prius, Toyota is willing to lose money initially on their $69,000 FCV in order to carve out a market share.

Last year, the UN also adopted many of Japan's fuel cell safety standards for the global market, possibly giving the nation an advantage over South Korea and Germany, whose automakers are also exploring fuel cell technology.

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