Japan promises $20K subsidies for fuel-cell buyers

Rebate program aims to promote expensive tech embraced by Toyota, Honda.

Japan is reportedly preparing to launch is subsidy program for fuel-cell vehicles, with consumer rebates expected to be initially set at $20,000 or more per vehicle.

The program will directly benefit Toyota and Honda as both companies prepare to launch fuel-cell vehicles in Japan ahead of expansion to the US and other global markets.

Hydrogen-powered drivetrains are still prohibitively expensive for mainstream adoption, though significantly cheaper than the $1 million price tag for research vehicles several years ago. Toyota will likely lose money on its $69,000 FCV as it arrives on the market, while Honda is expected to be in a similar position.

Hyundai is one of the first companies to launch a fuel-cell vehicle in the US market. Notably, the Tucson Fuel Cell crossover is only available via lease and only in a few California cities that already have hydrogen refueling infrastructure.

Hyundai-Kia, Toyota and Honda are making a bet that infrastructure will continue to expand and fuel-cell drivetrain costs will sharply drop over the next five years. Both trends are viewed as necessary to help the technology compete against electric vehicles, which continue to benefit from cheaper battery technology.

"The subsidy is a huge driving force for sales, but it won't be offered forever and I think the message here is that we need to continue cutting costs," Toyota senior engineer Koichi Kojima told Reuters.

Japan is expected to continue offering subsidies for fuel-cell vehicles, potentially dropping the consumer cost down to approximately $20,000 by 2025.

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