Japan to dangle nearly $20,000 in subsidies to spur fuel-cell sales

Mitsuhisa Kato, executive vice president at Toyota, introduced the FCV fuel-cell sedan in Tokyo last month.

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TOKYO (Reuters) -- Japan's government will offer at least 2 million yen ($19,700) in subsidies for fuel-cell vehicles, Prime Minister Shinzo Abe said, according to media reports, as the government and Japanese carmakers including Toyota Motor Corp. join forces to speed up the introduction of the vehicles.

The subsidy would mean that consumers would pay about 5 million yen for Toyota's FCV fuel-cell sedan, which is set to go on sale by the end of March 2015 priced at about 7 million yen ($68,690).

Abe, who visited a hydrogen station and test-drove fuel-cell cars on Friday, vowed to back the technology through subsidies and the purchase of the cars by government agencies.

"This is the car of a new era because it doesn't emit any carbon dioxide and it's environmentally friendly," Abe told reporters. "The government needs to support this."

Abe's growth strategy promotes the use of hydrogen energy and fuel-cell cars, which use hydrogen as fuel and run on electricity from cells that combine hydrogen with oxygen and emit only water vapor and heat, though some carbon dioxide is emitted when hydrogen is produced from hydrocarbons.

Honda Motor Co. is also set to start selling its fuel-cell vehicle in 2015.

Both the government and many industry experts believe the technology could take decades to become widely used partly because of the costs of building up infrastructure of hydrogen fuel stations.

Toyota's Camry-sized FCV sedan will go on sale in the U.S. and Europe months after its launch in Japan.

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