TOKYO — A consortium of Japanese automakers is pitching what it calls an investment opportunity to help build a future based on hydrogen fuel cell vehicles.
But buying in won't be for the faint of heart.
Initial outlays will likely be huge and returns are a big question mark. Payoffs will likely come a decade down the road, if at all. Even one of the organizers calls it "high risk."
But a group of the country's automakers and energy companies is going ahead with the new company to jump-start construction of a hydrogen refueling network across Japan. The idea is to share startup costs and bring in outside investors interested in a piece of the future.
The consortium of 11 companies — including Toyota, Honda and Nissan — announced their venture last week, saying they will pool resources to build 80 hydrogen stations in the next four years.
They want to build more through March 2028, ideally with additional partners.
The company is called Japan H2 Mobility, or JHyM (JAY'-hym). Its president, Hideki Sugawara, also project general manager for Toyota Motor Corp.'s Tokyo engineering division, called JHyM the world's first framework for bringing industry players together with outside investors to build a hydrogen refueling infrastructure.
Makoto Anayama, who represents the Development Bank of Japan, another initial investor, called it something different: "For investors, it's still a high-risk investment."
Japan is trying to position hydrogen as an energy source of tomorrow through a government-backed campaign to achieve a "hydrogen society." Tokyo sees hydrogen as a way for resource-poor Japan to become more energy self-sufficient and break its dependence on fossil fuels.
But the technology is costly and presents a chicken-egg problem.
Fuel cell vehicle sales aren't expected to take off without more refueling stations. And no one will build refueling stations unless more cars need a fill-up.
The cost of building a station can climb as high as ¥500 million ($4.7 million), and JHyM wants to reduce that. Japanese government subsidies can slash that investment in half. JHyM hopes that winning more investments can trim some 10 to 20 percent off the remaining amount.
Today, Japan has just 101 hydrogen stations for some 2,400 fuel cell vehicles on its roads — exclusively Toyota Mirai and Honda Clarity sedans, the only cars available.
Building 80 more stations over the next four years could help Japan catch up to the government's goal of opening 160 by 2020. By then, Japan wants 40,000 fuel cell vehicles on its roads.
Even more ambitious is the 2025 goal to reach 320 stations and 200,000 hydrogen vehicles, on the way to a 2030 goal of 900 stations and 800,000 vehicles.
"It is a very challenging target," Sugawara conceded.
Joining Toyota, Honda Motor Co. and Nissan Motor Co. as initial partners are assorted energy and logistics companies: Idemitsu Kosan Co., Iwatani Corp., Tokyo Gas Co., Toho Gas Co., Air Liquide Japan, Toyota Tsusho Corp. and JXTG Nippon Oil and Energy Corp.
The Development Bank of Japan rounds out the list.
JHyM is in talks with other possible investors, Sugawara said, declining to give details. Organizers wouldn't say how much each initial partner invested.
Nissan's participation is less than a ringing endorsement. Of the 11 original JHyM participants, Nissan was the only company without a financial stake in the venture. Nissan, which is more focused on full-electric vehicles, doesn't have its own fuel cell car on the roads.