New Toyota CEO Koji Sato will prioritize hydrogen, even as company steps up EVs

SUZUKA, Japan – Toyota's newly appointed CEO, Koji Sato, said hydrogen will be a top priority of his carbon neutral strategy, even as he redoubles his focus on electric vehicles.

Under his watch, through the end of the decade, the focus will be expanding the hydrogen infrastructure and the array of industries using the futuristic fuel, Sato said.

"We want to ensure that hydrogen stays a viable option," Sato said March 18 on the sidelines of a weekend endurance race where Toyota had planned to field a hydrogen-powered race car.

"We need a production and transport supply chain," Sato said. "Unless we see evolution there, we cannot expect a volume increase in the energy's use."

Sato, who takes over as CEO of Toyota Motor Corp. on April 1, said last month after being named to the top job that the world's biggest automaker "must drastically change" the way it does business and adopt an "EV-first" mindset. The company is now developing a new dedicated EV platform for 2026 that will be deliver less costly, better performing EVs. Sato, who will succeed Akio Toyoda at the top of Toyota, signaled the new push when announcing his new leadership team.

Fuzzy goals

Toyota expects to sell 3.5 million electric vehicles globally in 2030.

In contrast to the emboldened ramp-up on the full-electric front, Toyota has been more circumspect in talking about hydrogen. The company that helped pioneer fuel cell technology with its Mirai water-vapor-emitting hydrogen-powered car doesn't even have a concrete sales target.

Sato declined to offer one, even as Toyota hosted a media event to tout hydrogen's potential.

"We don't have a very specific business goal at this time," Sato said.

When Toyota released the second-generation Mirai fuel cell sedan in 2020, the company was so confident in future demand for the technology that it ramped up fuel cell production capacity to 30,000 units a year, a tenfold increase over its previous-generation stack. But it has sold only 21,700 of the first- and second-generation Mirai since sales began December 2014.

The Japanese government has announced a target of having 200,000 fuel cell vehicles on the country's roads by 2025 and 800,000 by 2030. Today, Toyota said there are about 160 hydrogen filling stations in Japan. That is forecast to climb to 320 in 2025 and to 900 in 2030.

Hydrogen will play a critical role in Toyota's multipronged approach to achieving carbon neutrality, Sato said. The strategy leverages full EVs, hybrids and hydrogen technologies.

"We are making full-fledged efforts on everything," Sato said. "It is important to remain flexible in order to tailor products and energies to different carbon neutral needs in different markets."

More partners

Sato said it was especially crucial to bring more partners to the table to build out a network of companies manufacturing, delivering and using hydrogen.

To underscore the point, Sato was joined on stage at the weekend race event by the presidents of Kawasaki Heavy Industries, the maker of liquid hydrogen carrier ships, and Iwatani Corp., a Japanese company that manufactures hydrogen and operates a fueling networks.

Toyota had planned to show off a new GR Corolla race car running on liquefied hydrogen at the weekend's five-hour endurance race at Suzuka Circuit in western Japan. But earlier this month, the car caught fire during a test run because of a leak in a hydrogen fuel line. The car's debut was scuttled, and it was replaced on the grid by a gasoline-burning Toyota GR Yaris.

Despite Toyota's efforts to test and develop hydrogen combustion in race cars, Kawasaki Heavy President Yasuhiko Hashimoto said he envisions the technology making its biggest impact in heavy trucks, buses, construction equipment, trains, aircraft and stationary power generators.

Hashimoto, for example, said his company is working on a new liquefied hydrogen transport ship that will have a capacity 128 times that of today's hauler, which is also built by his company. The goal is to bring the price of hydrogen down to about 30 cents per cubic meter by 2030, partly by  being able to transport huge quantities, he said.

"Hydrogen will be an indispensable future energy," Hashimoto said.

Sato said it was important for all industrial sectors to pull their weight. But he stopped short of saying Toyota would take the lead in plowing money into areas like infrastructure and logistics.

"It's not that Toyota will take a proactive lead," he said, "in making these investments."