Toyota to produce first fuel cell car

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The long awaited fuel cell car is finally here, sort of. Toyota ( TM ) announced this Thursday that they were beginning mass production of a completely new kind of car which will run on hydrogen fuel cells. In theory, that will give the car far longer range and greater torque than an electric car, while leaving behind no exhaust, only water. The technology was once theorized to be the next logical step forward for automobiles, but in recent years, it has fallen very much out of favor.

Were it anyone else, it would be harder to believe, but Toyota is the company that took hybrid cars off the drawing board and put them on the road, sparking a global phenomenon. Toyota's Prius accounts for 25% of all hybrid vehicles sold in the United States, and it outsells all brands of electric car combined.

Fuel cell technology is not without critics; when asked what he thought of fuel cell technology, Tesla's ( TSLA ) CEO Elon Musk said bluntly, "Fuel cells are so bulls**t!" He later added that he usually refers to them as "fool cells." But what about the incredible environmental gains to be made from cars with water for exhaust? Unfortunately, almost everyone concedes that these are an illusion; you have to expend energy to create a hydrogen fuel cell capable of producing energy, and that energy has to come from somewhere. Much the same is true of the electricity in electric cars, but electric cars appear to be more efficient than anything that can be made using hydrogen fuel cells.


Toyota's as yet unnamed fuel cell car will go on sale in Japan next year, where they have at least the beginnings of the infrastructure-refueling stations, etc.- needed to make the cars practical. It is known that fuel cell cars will be expensive. What isn't yet known is what, if anything, their long-term advantages will be. In a world that has already embraced hybrid technology and is beginning to embrace the electric car, it may be that the fuel cell car is an idea the time for which need never come.

Even so, it is hard to figure out why the announcement hasn't caused more excitement in the usually-volatile fuel cell company stocks, such as FuelCell Energy ( FCEL ), Ballard Power ( BLDP ) and Plug Power ( PLUG ), all of which are down today by about 2%. A successful fuel cell car, made by anyone, would be a great thing for fuel cell companies, yet the market snores. It seems like no one is giving Toyota's venture any chance at all of success.

Though I am pessimistic myself, universal pessimism seems excessive. Perhaps it is just that too many investors have been burned too many times by fuel cell companies. Whatever the cause, it seems fuel cells are one the bait the market won't rise for. 

Julian Close has been a business writer since the first day of the twenty-first century, having written for PRA International and the United Nations Department of Peacekeeping. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. He became a stockbroker in 1993, but now works for Fresh Brewed Media and uses his powers only for good. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC .


This article was originally published on MarketIntelligeneCenter.com



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Technology

Referenced Stocks: TM , TSLA , FCEL , BLDP , PLUG

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