Opinion: Toyota Wanted To Launch a High-Volume EV With Tesla’s Help – Now Toyota Is Stuck With An FCEV


Sorry Toyota, No Batteries For You

Sorry Toyota, No Batteries For You

During the Tesla shareholder meeting, Musk let slip a little piece of information Toyota probably did not want to make public. It is an example of one of those hidden gems that makes listening to every Musk Q&A worth it.

Musk was questioned why the relationship with Toyota was “terminated,” in obvious reference to the RAV4 EV project.

Musk’s response was that it was a fixed production run (~2600 units) and it was nearing the end, not terminated. Toyota wanted to do another EV drivetrain project, in higher volume, likely at a lower price point. Musk did not want to take away battery supply from expanding Model S production just to send the capacity to Toyota.

That could mean two things: the profit margins are better on Model S than the drivetrain supply deals, or Musk does not want Toyota to beat them to market with a Gen III competitor. Musk did say they would revisit the talks in a couple years. It would likely lineup with the Gigafactory coming online and cell supply issues being resolved. Tesla would also be much closer to having Gen III on the road.

Toyota FCEV Concept

Toyota FCEV Concept

At this point we know Toyota’s main drive is regulatory compliance with ZEV credits. With the requirements going up in 2018, Toyota is most likely trying to get ahead of the curve and pile up credits. With Tesla unable, or unwilling, to deliver a higher volume of drivetrain supply (likely at lower margin than RAV4 EV), Toyota is forced to push forward their FCEV technology to the consumer early or be forced to purchase credits from Tesla or Nissan.

In the end, I believe Toyota’s release of the FCEV is out of necessity, not because they believe it is the future of transportation or even a superior technology to BEVs. I find it unlikely that Toyota will sell enough FCEVs to meet the increased requirements in 2018. It is now on the marketing department to try to sell enough to hit their ZEV credit goals. Look for this to be a lease only program and only live long enough for them to get another EV project rolling.

Toyota was key in helping Tesla get the Model S off the ground with the capital investment, discounted Fremont factory, and RAV4 EV contract. Now, Toyota is ironically at Tesla’s mercy, in regards to ZEV compliance.

Category: Tesla, Toyota

Tags: , , , ,

97 responses to "Opinion: Toyota Wanted To Launch a High-Volume EV With Tesla’s Help – Now Toyota Is Stuck With An FCEV"
  1. FFY says:

    Huh? Toyota has long experience with electric drive trains, and there are several alternative EV battery makers. I’m sure Toyota could easily build an EV by themselves if they really wanted to. Why exactly would they be “at Tesla’s mercy”?

    1. Josh says:

      If they could easily build a BEV themselves, why did they use Tesla to build the drivetrain for the RAV4 EV? And why did they ask Tesla to do another BEV project?

      1. QCO says:

        For the same reason Ford went outside for the FFE drive train, even though it could have been done in-house: The compliance car volume is so low that it’s not worth the engineering effort when you can outsource it from a specialty supplier.

        Toyota believes in hybrids and FCVs, so forced BEV development for compliance purposes is an annoyance they can live without. Some of us believe they are wrong, but it’s their choice.

        1. RichardC says:

          Your comment doesn’t make sense. Toyota asked Tesla to help them with a “high volume” EV offering, but you assert Toyota could have done it themselves? High volume implies that it would not be a compliance vehicle.

          Toyota has gotten behind the curve on BEV’s and will pay a price for it. Their FCEV will not be a strong player for many, many years.

          1. cmg186 says:

            The article says “in higher volume”, not “in high volume”. 2601 is higher volume. Just sayin’.

          2. QCO says:

            2600 cars is cottage industry volume, which is virtually zero for any major auto manufacturer.

            Toyota is just not serious about BEVs at this point in time.

    2. evnow says:

      Yes – but can they build a small car that goes 200 miles ?

      1. Spec9 says:

        I think any of these automakers can build an EV that goes 200 miles. The thing is that none of them except Tesla believed that there would be a market for an expensive car that goes 200 miles. Tesla was right . . . there was a market for such a car.

        Now Tesla is trying to build a less expensive car that can go 200 miles. Will any of the the other automakers try to do it as well? GM has said they are somewhat interested but no one but Tesla has really pushed forward.

        1. I agree! The EV1 was at ~150+ miles on NiMH batteries. The Illuminati Motor Works ‘Seven’ and Dave Cloud’s Dolphin have 220+ and 200+ miles ranges, respectively. The Sunrise EV project went way over 300 miles.

          It is primarily the efficiency of the car. Build it as efficient as possible, and the battery required to go 200+ miles is smaller, less expensive and lighter weight.

    3. RedLeafBlueLeaf says:

      This is my question. An EV is less complicated to design and build than a hybrid is. Now, true, marketing an EV is harder. If you remember your first time driving a hybrid, it was amazing just how different everything was – the cool displays, the sounds, etc. – but in the end a hybrid adds no complexity to the user – just put in fossil fuel and it runs.

      An EV, by contrast, (that is, a true BEV) requires a whole different end-user approach, from “where do I charge?” to “what chargers should I use at home?” to “how do I plan a trip longer than my single-charge range?”. It seems like Toyota wanted no part of supporting this kind of transition – and to be honest except for Tesla and Nissan no other manufacturer has really embraced this challenge either.

      Given how easy it would be for Toyota to build a BEV Prius I have to imagine that this was the only reason they didn’t do the LEAF equivalent when Nissan did. I’m guessing that the FCV interest is because FCVs, in theory, would be as easy as ICEs for a customer.

      1. Rav4 EV says:

        The reason Toyota is not able to build their own BEV is that they don’t have the engineering work that Tesla and Nissan have done on packaging battery technology for pure BEV’s.

        THe Rav 4 EV is an amazing car, I own one. The only thing lacking is a quick charge port. 120 miles + range at 70 mph is the sweet spot for BEV mass acceptance.

        Come on Toyota, get your head in the EV game. FCEV’s are a pipe dream.

        1. RedLeafBlueLeaf says:

          But they could easily have invested the engineering time to develop that technology. Given their innovation on the Prius, the technical problems of going to a true BEV would be a simpler problem to tackle. But they clearly chose NOT to invest in that direction.

    4. Toyota did build an BEV without Tesla components …

      The Toyota Scion iQ has a 12 kWh battery that provided ~50 mile range from 43 kW (50 HP) motor.


      1. Dr. Kenneth Noisewater says:

        So, state of the art… 25 years ago.

        1. GSP says:

          More like 110 years ago… LOL!


      2. If the iQ EV had 75-80 miles range, it would be very desirable, in my opinion. Toyota needs to take another look at this and do whatever it takes to get it done.

        If Mercedes can do it with the Smart ED, then Toyota can succeed with the iQ EV.

    5. See Through says:

      Toyota could just get the batteries from Panasonic, and starve Tesla if it wanted. They are in the same country and this would require no shipping of batteries.
      Musk just likes to bite the same hand that fed Tesla when it was on the verge of collapse a few years back. He is now acting like a mad dog! And these Musk-fans just take his every rumbling as another sign of being ultra genius.

      Even if what he said was true, it reflects extremely poorly – shows his sloppiness in disclosing confidential information. How would he like if Panasonic would dump tesla’s empty pipeline info to public?

      1. Mint says:

        Nobody said it was ultra genius. You only claim such sentiment because you are incapable of simple math.

        Tesla makes $25k gross margin on every 85kWh of batteries that it can get its hands on.

        The only way it would make financial sense to sell 30kWh drivetrains to Toyota is if Tesla could get $8k+ profit on each *and* get Toyota to pay for all engineering and tooling. At that price, Toyota couldn’t compete with anyone, so the deal fell apart.

        BTW, Daimler is the one that saved Tesla with a timely investment at the end of 2008, not Toyota. Toyota merely sold Tesla an idle factory that was worthless to it. That was no favor or investment risk.

    6. Taser54 says:

      Reads like Musk is fearful of major corporations entering the low cost EV space before Tesla. If, for example, an EV Camry was released before the Gen III, the sheer momentum of Toyota’s goodwill built up over millions of car owners would be nearly impossible to overcome.

  2. Chris O says:

    Toyota at Tesla’s mercy…hardly. Toyota is a big boy and the recent change in CARB mandates that heavily favors hydrogen over plug-ins is no doubt a sign of Toyota&co turning a lemon into lemonade by means of effective lobbying.

    HFC vehicles may be very expensive to make and can only be sold by heavily subsidizing them but all that is a real bargain since every vehicle could net up to $130K worth of ZEV credit points in the revised mandate.

    The fact that the state of California is willing to throw $220 million of the taxpayer’s money at hydrogen infrastructure only sweetens the deal for Toyota.

    1. Spec9 says:

      This ‘$130K of ZEV points’ is a highly suspect figure.

      1. Chris O says:

        According to wardsauto: “The zero-emission-vehicle credit program of CARB, the state’s air-quality regulator, will see Hyundai earn as many as 26 points for each Tucson leased up to the ’17 model year, equivalent to $130,000”.

    2. Josh says:

      As far as I understand it, the ZEV credits are an open market. The top sellers in California (and a few other states), just need X number of credits on their books to be in compliance.

      Nissan and Tesla have all of the excess credits. Honda has purchased them from Tesla in the past, but Fit EV seems to be meeting their needs now. RAV4 EV meets the needs for Toyota right now. So the credits aren’t worth much because nobody is desperate for them to comply.

      My understanding is the requirements crank way up in 2018, so the big guys all have that year circled on the calendar.

      Maybe Jay can stop by can clear up the details of the program…

    3. evnow says:

      Yes – why compete in the market place and actually invest in real technology when you can pay off the CARB guys.

      BTW, I don’t know where you got that 130k – but that keeps changing depending on the market.

    4. See Through says:

      Making BEVs is a piece of cake for Toyota. Their hybrid tech is way more sophisticated. Now, they have a chip to cut fuel consumption by another 10%! Get that Musk, just a chip.

      Making EV cars is really easy. See how many dozens of EV car makers are churning out cars in China. There are EV cars in China that go 30 miles for under $2000!

  3. Driverguy01 says:

    Why are Toyota and Honda not jumping in the EV bandwagon is behond me! They could do so much for EV’s. It’s ridiculous really!

    1. RichardC says:


    2. Yep, if Honda *sold* an EV version of their Fit, that would be my EV.

  4. David Murray says:

    Yet Toyota is already selling more plug-in cars than Tesla. Granted, the batteries are tiny in the PiP compared to the Model-S. Toyota obviously has their own supply of lithium batteries. I’m counting on the next-gen plug-in Prius being a giant leap forward for plug-in vehicles. I’m expecting them to increase the EV range and sell it in larger volumes and in all markets.

    1. Big Solar says:

      The PIP uses lithium batteries?

      1. Spec9 says:

        Yes, the PiP uses Li-Ions.

        But I don’t think Toyota is selling more than Tesla. They had a big month last month but I suspect that was an anomaly.

        1. Driverguy01 says:

          Well, i expect it to be an anomaly cause the pip just barely give you an idea of what electric will do. The pip does not qualify as a ”blast to drive”. My Volt does but it has the wrong logo…. they think!

        2. The PiP uses a lithium pack ‘piggybacked’ onto the NiMH pack, I believe.

        3. Mint says:

          I don’t think it’s an anomaly at all. It’s just awareness.

          Assuming Toyota didn’t do anything stupid, the PiP is *way* more profitable than a comparable Prius. All it has is 3kWh extra batteries and a charger, and everything else is basically identical.

          With the federal tax credit for plugins, the only people that should be buying regular hybrids are those without access to a plug, which is probably a tiny percent of new car buyers (who are generally higher income). The only reason this transition is happening so slowly is lack of competition and awareness, leading to manufacturers jacking up the price of PHEVs.

          I think VW’s commitment to PHEV is going to have a huge impact on plugin sales.

    2. Josh says:

      If I understand the ZEV credits correctly the PiP gets Toyota exactly zero credits for the program. The RAV4 EV is their vehicle to get them the credits they need to stay in compliance.

      RAV4 EV will be over very shortly and the credit requirements go way up in 2018. Toyota needs to get some credits built up in the bank before that year.

    3. SIvad says:

      Tesla isn’t really the right car to compare with. The Leaf is. The Leaf has already sold thousands more this year than the PIP.

      In 2013 the Volt, Leaf and Tesla sold more than the PIP

  5. jmac says:

    It is more efficient to use natural gas to make grid electricity than it is to use natural gas to make hydrogen.

    It’s just that simple.

    You figure out the rest.

  6. Rudy Clarke says:

    Don’t mind the naysayers Josh, I think you hit the nail right on the head. The reality was never that Toyota Motor Corporation could not produce a high volume EV, it’s just easier and a more viable business plan to outsource the power and drive train to a market leader and simply use that platform for one of its iconic “Green” brands – the Prius.

    Surely a new generation Prius EV (better styling) with 150 to 200 miles would be a market hit!! How much more simpler can you get that investing hundreds of millions, probably just over one billion on infrastructure and R&D to build or retool just for another kite flying exercise with a BEV. As a business manager that is what I would have done.

    I’m with your story 110 %, let see, who else has gone this route? Ahhh, a profitable company called Daimler aka Mercedes-Benz.

    1. Josh says:

      Thanks for the words. It is good to know there is at least one other person that buys into my crazy logic 🙂

  7. none says:

    Hydrogen is ridiculous expensive to produce, to storage and it is extremely flammable! It’s a wrong way to concept an electric vehicle! Charge points are much easier and cheaper to be deployed. Charge costs are the cheapest or even free (Tesla’s Supercharger stations and others). Hydrogen will be expensive to buy as gasoline and Diesel! With the advance in battery technologies, hydrogen vehicles will be a short fad!

  8. jmac says:

    Once you figure out who is actually behind the fuel cell, everything else becomes clear.

    Follow the money. Who stands to profit the most from a hydrogen economy based on reforming natural gas ?

    The answer of course is our current oil megopoly.

    1. CherylG says:

      Does that then mean that the coal industry and nat gas industry is behind EVs? Thanks for letting us know.

      1. Grady says:

        I think the implication is that hydrogen fuel cell vehicles (HFCV) would benefit the natural gas industry because one of the easier ways to obtain hydrogen is by separating it from natural gas. Investing in an HFCV future, in the US at least, means investing in natural gas. And, of course, natural gas is cheap right now because of the fracking boom which has made much more natural gas available.

        Iceland was trying to make hydrogen cleanly using geothermal power. But the US already has a huge natural gas network in place. You can prop up a hydrogen gas station “easily” with a normal natural gas connection (like what you might use for your home stove or heater) and a little electricity.

  9. FFY says:

    Or they simply believe that pure EVs with long range will not be commercially viable for the mass market in the foreseeable future, and are looking at hydrogen as a long-term low-emission alternative. It remains to be seen if Tesla can prove them wrong with models like the Gen 3.

    1. Spec9 says:

      Sure . . . but that does not prevent them from offering shorter range “City car” EVs or making a real attempt at building a plug-in hybrid instead of the lackluster PiP which merely copied what enthusiasts had been doing to Prius hybrids 8 years earlier.

      1. Anton Wahlman says:

        And what is it that says that they won’t be offering just those kinds of cars in the next 2-3 years?

        1. Josh says:

          I have a feeling that is why they were hoping to do with another Tesla project, but Tesla turned them down.

          1. Anton Wahlman says:

            So Toyota just assumed that they would cut a favorable deal with Tesla, and as a result didn’t bother to have any contingency plan/development in place? That’s like assuming Citibank doesn’t back up its server data. I think the more plausible explanation is that Toyota always had its own internal development(s), and viewed Tesla as an “option” just in case they could cut such an amazing deal that an internal development wouldn’t make sense to take to completion.

            1. Josh says:

              What I am trying to convey is the FCEV was their backup plan for compliance. I will be eating crow if Toyota releases their own 100+ mile BEV within 12 months.

              1. Anton Wahlman says:

                Perhaps not within 12 months, but within 24 or at worst 36 months. And not just 100+, but perhaps more specifically somewhere around 200-250 miles. It seems pretty obvious that Toyota would have 2 torpedoes in the water, no?

  10. Spec9 says:

    I think Toyota’s biggest issue is that they have the most successful and profitable line of hybrid cars on the planet. It has taken a lot of investment and time to achieve that. And because of that, Toyota is not eager to eat its own children and jump with both feet into the largely unprofitable plug-in car market. They want to ride their hybrid success as long as they can before being forced to build plug-ins.

    This could back-fire on them though . . . the competition might get too far ahead of them.

    1. Josh says:

      I agree that Toyota is in a tough spot. Nissan had zero momentum in the hybrid space, so jumping to EV was a chance to get ahead. GM took the same approach with the Volt.

      I have mentioned this before, I think Toyota’s EV backup plan was to buy Tesla. I don’t think anybody 4 years ago believed they would have the market cap they do now. That option may no longer be on the table.

      It will be interesting to see what Toyota’s next plug-in move is.

  11. scott franco says:

    I saw the Q&A. Methinks to much is read into it.

    Toyota: We want an EV, but don’t want to do any real work.

    Musk: We are full tilt on our own car, we don’t have spare capacity. You could pay us fat stacks for the technology and do it yourself…

    Toyota: That would require real work and thought. Ohhh, look, a shiny toy…. we’ll get back to you.

    1. Josh says:

      So do you think the FCEV release is to meet compliance, or because Toyota thinks it is the technology of the future?

      1. scott franco says:

        I would also consider the idea that Toyota has no real intention of ever marketing the FCEV. I like to think they are not stupid. There are probably benies that come from just working on one, or saying you are.

        Really is that any different from what has gone on for the last 20 years? The technology that is just around the corner?

      2. Purely compliance …

        a FCV with 250 mile range gets ~6x as many credits as a LEAF, or Tesla. Above 300 mile range, a FCV gets at least 10x the number credits per ZEV. (major bonus credits for refueling range in under 10 min.).

        For full award of credit a vehicle only needs to be placed in service for 24 months. Unlike the RAV4 EV the FCV will not be sold and few will see over 50,000 mies on the odometer.

        1. Josh says:

          You and I are thinking the same Brian.

          These FCEVs will be 24 or 36 month leases only, then they will get the regular return and crush treatment.

          Wonder if they will pull the FC stacks out before the crush (jk), otherwise it might be quite the show.

  12. ggpa says:

    The Plug in Prius sells in huge numbers. I assume that must give Toyota all the ZEV credit they need. Or not?

    1. evnow says:

      No. PIP doesn’t give them “gold” credits. Only real ZEV can give gold credits, not PHEVs.

    2. mike w says:

      I’m thinking they don’t have the required credits without the RAV4EV. That’s why they are pushing the FCV because they are worth 7 or 9 credits each. Without the RAV4EV Toyota has to pay Tesla for their ZEV credits. With the RAV4EV Toyota has to pay Tesla for the batteries and electric motors. You would think Toyota could got to LG Chem or Toshiba (SCIB) and get the batteries cheap and still buy the motor and engineering off of Tesla.

      1. Rudy Clarke says:

        My point exactly, that what any recent business grad would do, but Toyota simply does not want to retool and eat away at its profitable hybrid market all for a technology that appears to them, is not yet mass market ready (price point and infrastructure).

    3. FFY says:

      From what I understand, Toyota has accumulated such a huge number of credits in the past that they are already fully covered for this decade:


      They also still earn credits from the PIP, although plug-in hybrids don’t earn as much as they used to. Based on this, it seems that Toyota has far less urgent problems meeting the regulatory requirements than other manufacturers thanks to their decade-long market leadership with the Prius. Perhaps that’s part of the reason why they are not in a hurry to produce pure EVs.

      1. Josh says:

        Thanks for the link. It is a little old, but a very good background on how the credits work. My understanding is that the Prius and PiP credits work for a portion of the requirements, but not the whole thing. Here is a quote from your article that confirms my thinking:

        only about 18,000 of those credits—representing about 6,000 electric vehicle sales—are needed to meet the ZEV-only portion of the requirement

        1. FFY says:

          My interpretation of this sentence is that a car maker can use the 18000 credits to offset the failure to build the mandatory number of ZEVs. Given that Toyota has apparently accumulated well over a million credits, that would not affect them anytime soon.

          1. FFY says:

            Correction: Is not “well over a million”, but just ~228,000 credits according to the article. The table at the bottom uses a different unit. Still enough to cover more than a decade without building any pure EVs …

            1. Josh says:

              I see what you are saying. If that is true, it shoots a hole in my theory for sure.

              I still believe that there is two buckets of credits, ZEV credits and PZEV credits. I think automakers need to have qualifying amounts of both to be in compliance. Toyota is loaded with PZEV credits from the Prius and PiP, but it still needed the Rav4 EV to get the ZEV credits.

              This article from the same site talks around the issue a little bit. http://www.plugincars.com/tesla-still-big-winner-california-zev-credit-sales-128593.html

              I will see if I can find some more concrete information.

            2. Josh says:

              Ok, I dug out the actual CARB rules, so I wouldn’t be guessing at the answers. And of course it is more complicated than either you or I were thinking. I am going to post the excepts that I think we are looking for.

            3. Josh says:

              2012 through 2014 Requirements.

              A manufacturer must meet the total ZEV
              obligation with ZEVs or ZEV credits generated by such vehicles, excluding NEVs and Type 0
              ZEVs, equal to at least 0.79% of its annual sales, using either production volume determination
              method described in section C.2.1(b) No more than 50% of the total obligation may be met with
              PZEVs, No more than 75% of the total obligation may be met with AT PZEVs. No more than
              93.4% may be met with Enhanced AT PZEVs, Type 0 ZEVs, and NEVs, other than limits
              described in section C.7.6. The entire requirement may be met solely with ZEVs.

            4. Josh says:

              2015 through 2017 Requirements.

              A manufacturer must meet its ZEV obligation
              with ZEVs or ZEV credits generated by such vehicles, excluding NEVs and Type 0 ZEVs, equal
              to at least 3% of its annual sales, using either production volume determination method described
              in section C.2.1(b). No more than 42.8% of the total obligation may be met with PZEVs, No
              more than 57.1% of the total obligation may be met with AT PZEVs. No more than 78.5% may
              be met with Enhanced AT PZEVs, Type 0 ZEVs, and NEVs, other than limits described in section
              C.7.6. The entire requirement may be met solely with ZEVs.

            5. Josh says:

              Requirements for Large Volume Manufacturers in Model Year 2018 and

              In the 2018 and subsequent model years, a manufacturer must meet a ZEV total
              percent requirement of 16 percent. The maximum portion of a manufacturer’s percentage ZEV
              requirement that may be satisfied by PZEVs that are not Enhanced AT PZEVs or AT PZEVs, or
              credits generated by such vehicles, is limited to 6 percent of the manufacturer’s applicable
              California PC, LDT1, and LDT2 production volume; Enhanced AT PZEVs and AT PZEVs or
              credits generated by such vehicles may be used either alone or in combination, to meet up to onehalf
              of the manufacturer’s remaining ZEV requirement.

            6. Josh says:

              So based on Toyota’s 2012 production (because that number is in CARBs table) of 297000 vehicles sold in California, lets see their ZEV credit requirements.

              2014 – 2346
              2015 to 2017 – 8910
              2018+ – 47520

              The Rav4 EV was a 3 credit vehicle, so that puts a little over 6k in the bank for them. They can also use the Prius and PiP credits to get them to 75% in 2014, 57.1% in 2015 – 2017, and 50% in 2018+.

              Coming up with 23k ZEV credits a year in 2018 is where Toyota is going to be in a tough spot. The penalty is $5k per credit or $115 million a year. At 7 credits per vehicle, they would need to deliver north of 3k FCEVs per year.

              1. FFY says:

                I’m not sure about those numbers … those regulations seem way too complicated. 😉 But even if your result is correct, I don’t believe it would be a big issue for Toyota to operate ~3000 fuel-cell vehicles by 2018, given that the FCEV concept will launch in 2015. They could easily meet that target with a lease program of some kind.

                Also remember that they could simply purchase credits from other manufacturers with a surplus such as Tesla or (probably) Nissan. The price for the credits would obviously be below $5000 per car (since otherwise they could just pay the penalty without lining their competitors’ coffers).

                Finally, remember that regulations are not set in stone. If the car industry as a whole fails to generate the total ZEV credit requirement, the requirements will be watered down. This has happened in the 1990s as well.

                1. Josh says:

                  I agree the rules are too complicated. That must have been the results of the negotiations with the automakers.

                  The $5k per credit is the upper limit as you clarified. Nissan and Tesla will both have plenty of ZEV credits for sale for less than $5k, but we are still talking about tens of millions of dollars out of Toyota’s pocket.

                  Toyota would have to be leasing $3k new FCEVs per year to keep up with the requirements in 2018+. So a fleet closer to 10k. That seems too big for a lease only program.

                  As you stated, these regs have changed many times in the past, so changes could come in the future as well. With Tesla and Nissan proving that BEVs can sell to the public (and sitting on credits), I don’t see CARB backing off very much on the regulations.

                  1. Josh says:

                    type 3000 FCEVs not $3,000 FCEVs, they would sell like hot cakes at that price, even without refueling stations 😉

  13. Anthony says:

    I thought similar things when I heard that in the conference call. Elon is right – Tesla’s first goal is to make cars. Not to make EV power trains for other automakers.

    I don’t know what Toyota was even thinking trying to get Tesla to make them EV power trains that would directly compete with Gen 3. Maybe in 2020 when they can have a second GF online and enough capacity for a diversity of EVs.

  14. Carguy says:

    I’ve been driving EV’s for close to three years but I’m not an engineer and I haven’t been able to get a clear answer as to why Fuel Cell technology is better or even comparable to battery. Even the fuel cell industry’s own sites seem very weak in showing any advantages over battery tech. Theoretically you can refuel but thats only after there is a new refueling infrastructure in place.

      1. scott franco says:

        Thats an old article, but its worth noting for what it says between the lines. Elon probably already is buying fuel cells for the rockets spacex makes. Hes not unaware of what the technology can do.

        1. Josh says:

          It is an old article, but it is the best headline grabbing one for Musk’s assessment of FC technology. There have been many other times where he has discussed that the fundamental energy physics don’t add up for FCs. This is only his opinion, but I thought it was a relevant source to this discussion.

        2. Jouni Valkonen says:

          SpaceX does not use fuel cells and will never use fuel cells. Fuel cells were for the Apollo era space technology. Also space shuttle was using fuel cells as it was designed in 1970’s.

          Solar panels + batteries just has superior energy and power density compared to fuel cells. If solar power is not available beyond asteroid belt, then nuclear batteries (RTG) are the choice of energy source.

  15. jmac says:

    Electric Vehicles running on grid furnished electricity cost about .02 cents a mile to operate.

    Gasoline vehicles cost about 10 Cents a mile for fuel. Costs per mile for fuel cells are slightly less but roughly similar to gasoline.

    Fuel cell vehicles have essentially the same drive train as pure battery electric vehicles — an electric motor.

    Why would you want to pay 10 cents a mile for gasoline or hydrogen when you could be paying just 2 cents a mile for
    electricity ?

    The motor in the standard fuel cell vehicle and the battery electric car is the same — an electric motor. The question is: Do you want to pay 8-10 cents a mile to run your electric car on hydrogen from the filling station on the corner or 2 cents a mile with electricity from the wall plug in your garage ?

    The only remaining argument that fuel cell advocates have is that a tank of hydrogen will take you about 300 miles and that it is quicker to fill up with hydrogen than to recharge. The range/cost/recharge time problems with batteries are likely to be solved soon, even with just normal incremental improvements, even without any big battery tech breakthrough.

    Everything else about hydrogen is either just a wash or an outright negative. It’s going to cost billions for a hydrogen infrastructure to deliver a fuel (hydrogen) that will ultimately cost the same as gasoline does today.

    The only people who stand to benefit from the proposed H2 economy are the present day fossil fuel companies that would love to just morph our present day gas stations into the hydrogen stations of the future and dump the huge, outrageous cost for all this nonsense onto the taxpayer who will ultimately foot the bill.

    Present day oil and other fossil fuel companies stand the most to gain from H2.

    I suppose we could ask Toyota and Honda why they are so wrapped up with hydrogen , but I doubt we would get a truthful answer.

    1. philba says:

      EV costs are higher than that. Typically an EV uses about 300 watt hrs per mile. Factoring in charging loss (15% or so) you are getting close to 4 cents/mile based on national average electricity costs. When you figure in cold weather losses, it gets to about 5 cents/mile. Still better than petrol though I’ve not seen any solid data on true H2 costs.

    2. Mike I says:

      “The only people who stand to benefit from the proposed H2 economy are…”

      Don’t forget the industrial gasses people. Linde and Air Liquide and possibly Praxair are making money building these fueling stations for a couple million a pop. They should. They are the ones with the experience with that kind of infrastructure and can do it safely.

  16. Driverguy01 says:

    ”The range/cost/recharge time problems with batteries are likely to be solved soon, even with just normal incremental improvements, even without any big battery tech breakthrough.”

    Have you seen the size of the cable of those superchargers?
    Imagine the size of the same cable to recharge the battery in 5 minutes?
    Not going to happen unless it’s done by robots and, for some funny feeling, i probably would not be close to the car while it recharges. That’s some humongous amount of power transfer we’re talking about!

    1. TimE says:

      5 minute recharges are not necessary, and do not need to be the goal for “re-fueling” an EV. 30 minutes is just fine.

      You plug the car in when sleeping, always start the day with basically a full battery, and rarely – if ever – end up using more than 150 miles in a single day.

      Drove 930 miles this past weekend in one day, in the gas car since we were moving – as I was driving, I was keeping a running track of where/when we stopped and how far we went in between. Had I been in a Tesla and had access to their 30-45 minute SuperChargers along the route I took, I would have had no issue.

      So – you rarely need those quick “fill-ups” on any given day in the first place, and the 30 minute fill-ups do just fine for that RARE long distance road trip. Why do we still have anyone who believes a 5 minute fill-up is a necessity or goal???

      1. philba says:

        Truth, Simply put, once people actually understand that the gas station analog is wrong for EVs then they will see the clear benefit of always having a full charge in the morning. Then the light will go off and the need for any charge stations vastly diminishes.

      2. Brandon says:

        having to go to a gas station is just horrible.

        And charging your car is actually fun, unlike filling a gas car up. Waiting for your car to charge is no problem

      3. Priusmaniac says:

        Well, charging in five minutes is simply faster and if there is a way to do it why not?
        Consider that the charging can be made from under the car through large contacts on little bumps on the ground. Then add a higher voltage in the thousand of volts instead of the mere 400 v we have right now. In that why the same size cables, which are now underground and don’t need to be manipulated, can now feed the car at a megawatt order rate (1000 KW), enough for a five minute charging time. The model s 85 KW contains 7104 18650 cells of roughly 3.6 volt. They are arranged in 16 modules in series, each containing 6 groups in series, with 74 cells in parallel. This all makes 22 v per module and 346 v for the pack. To recharge they go somewhat higher at around 400 volts. If you want to benefit from a higher voltage, you need change this configuration. A way to do it would be to put all the cells in series which would give a voltage of 25574 volts (about what is used in a standard ignition engine spark plug). This would allow a 74 times larger power transfer for a same cable section. Would, because of course your cells must still be able to individually charge faster as well but that is not involving the power transfer to the car anymore but the specific engineering of the cell. On that side you need to reduce electrode thickness and instead expand their area. This will result in faster charge for a same capacity.
        Since 74 times faster is giving half a minute compared to half a hour, to get to 5 minutes, it should be enough to use a 2557 volt arrangement of the cells and charging voltage of roughly 3000 volt. That is of course more then 400 v but 3000 v is also not that much compared to what’s used in power lines. So the five minute megawatt power level charge is indeed possible if the cells can charge in five minutes.

      4. GSP says:

        Well said. Batteries can support 20-30 min DC fast charging. Going faster requires too many compromises in cost, range, and infrastructure.

        Faster than 20-30 minutes is just not necessary for the occasional long distance trip.


  17. Jouni Valkonen says:

    If fuel cell cars are so good, then why exactly Toyota does not offer fuel cell variant of their most expensive Lexus? As this costs more than $100 000, the cost of fuel cell would not be a significant fraction of total cost of car and therefore it could survive without government subsidies.

    Also higher cost of refueling hydrogen than refueling gasoline is not a problem for the rich high end Lexus owner.

    Or is it that fuel cell cars really are inferior to gasoline cars and therefore ther is no point for selling them for those who are looking a good car rather than a cheap or green car.

    1. Aaron says:

      You’re right. Fuel cells can’t produce the amount of power needed* to move an LS460 at a decent clip, without a significant battery reserve.

      * without a very, very large and even more expensive fuel cell

    2. Anton Wahlman says:

      They have to sell many of them. Not too many people buy $100,000 cars. They need to sell cars that cost $25,000 – $40,000.

      1. Jouni Valkonen says:

        Toyota does not plan to sell many $80 000 fuel cell cars. Even Toyota estimates hopefully that fuel cell cars could be in mainstream at some point in 2030’s.

        Of course they won’t because electric cars will come to mainstream around 2017 and Fuel Cell cannot never compete with electric car with 200 kW fast charging and 600 km range. But Toyota assumes that electric cars can never achieve more range than 100 km and faster charging than 50 kW.

        Even fuel-cell powered Rolls-Royce or Ferrari would have good enough sales volumes at this point.

  18. Lad says:

    The problem is still there; no one can produce a real good traction battery. The current batteries are too weak, too heavy and too expensive. Additionally, no one can produces enough batteries to satisfy an immediate mass increase in BEV sales.

    In the case of Toyota, Tesla is already battery constrained; why would they sacrifice their own sales and increase this constraint by building drivelines for Toyota?

    The only way for BEVs to reach critical mass and overtake ICE cars is riding on the ability of traction battery makers to supply a better battery in massive amounts to the BEV manufacturers. And, the best hope is Tesla’s Giga Factory producing batteries designed by Argonne’s JCESR project.

  19. Anon says:

    Another way to look at the Tesla / Toyota relationship:

    Toyota hoped to ensnare Tesla into diverting its limited resources, to defuse and delay them from reaching their own production milestones. Tesla didn’t bite– so the Model X, Superchargers, Gen III, gigafactory, are still reasonably on track…

  20. jmac says:

    We are going to run out of fossil fuels at some point in time.

    Going to an H2 economy based on reformed natural gas is like getting off heroin only to fall into morphine addiction.

    H2 backers realize this and have from time to time tossed around the idea that we should use sunlight to split water into hydrogen and oxygen.

    On the surface it sounds good, but why not just take the energy produced by solar cells and put it directly into an electric car battery. Much simpler.

    That’s vastly more efficient than taking the electrical energy produced from solar to split water, then using the resulting hydrogen in a fuel cell.

    The goal in both cases is to use electricity to power an electric vehicle.

    But with hydrogen you are going through the extra, unnecessary, expensive step of manufacturing hydrogen rather than just using the electrical energy straight up, which is the common sense thing to do.

    Moving to a hydrogen economy is like quitting heroin so that you can take up opium.

    It’s still a fossil fuel economy and we are going to run out of fossil fuels.