BMW and Toyota to expand their tie-up on FCEVs

Sources familiar with the matter said on Tuesday that Toyota Motor Corp. and BMW AG will expand their tie-up in fuel cell vehicle (FCEV) operations in a bid to increase the competitiveness of their hydrogen-powered cars.

Under the deeper partnership, which is due to be announced on September 5th, Toyota will provide key components, such as hydrogen tanks, to BMW, which will, in turn, build and sell mass-produced FCVs in the next few years, the sources said.

Bringing down the cost

The expanded tie-up aims to standardize components and reduce the cost of FCEVs, which promise to achieve carbon neutrality as an alternative to battery electric vehicles (BEVs) but have not gained popularity due to their high prices and the lack of infrastructure.

The two automakers agreed to a tie-up on FCEVs in 2012 as part of efforts to develop greener cars amid tightening environmental regulations. The sources said sharing key components could lower the cost of the Toyota Mirai, for example, while sparing BMW the burden of developing parts independently.

According to these sources, the two companies will also collaborate on building hydrogen stations in Europe. The lack of filling stations has been a major stumbling block in popularizing FCEVs.

The European Union stresses the importance of hydrogen in the energetic transition and is keen on supporting initiatives that bring the use of (green) hydrogen closer to daily reality. Providing an adequate filling network for both cars and (even more importantly) trucks should be one of these priorities.

Pioneer Toyota

Toyota is a leading developer and provider of FCEVs, launching the first Mirai, the world’s first mass-produced FCEV, in 2014. However, its sales account for only a tiny fraction of the company’s overall vehicle sales, which exceed 10 million units annually. According to the company, the Japanese carmaker sold about 26,000 units of the FCEV Mirai from its launch in 2014 until June of this year.

One reason for this is that the Mirai sells for over 7 million yen (€43,400) in Japan, considerably more than the average price of a car over there, which stood at 2.64 million yen (€16,400) in fiscal 2023, according to data of an industry organization.

In Europe, the Mirai, trimmed in a full-option Executive version, costs around €80,000 now. Despite Toyota’s efforts to show it at different significant events (the latest Olympics in Paris, for example) and to introduce it in the leasing business, sales have been very slow.

Another hurdle, maybe even more important, is the lack of hydrogen-fueling infrastructure. The ‘range anxiety’ already well-known among BEV clients is also very present among potential FCEV customers, not because of the range as such (which is more than reasonable) but because of the complete lack of filling stations in most European countries.

BMW and Toyota

What has brought BMW and Toyota together is their partly shared vision of how the car market will evolve. Both groups are adept at the so-called multi-path approach, not wanting to lay all their eggs in the full-electric BEV basket but trying to provide different ways to achieve zero emissions.

Toyota is the world’s number one and a long-time leader in the hybrid vehicle sector. It sees the recent slowing down of BEV sales as confirmation of its views and will continue to develop hybrids, BEVs, and FCEVs together.

BMW seems to be the European (premium) manufacturer catching up most quickly with Tesla and the Chinese in developing and proposing BEVs. Its recent EV sales figures prove this.

The Bavarians will launch a major offensive regarding BEVs with their ‘Neue Klasse’ at the end of 2025, but it has been confirmed that FCEV derivatives will also be proposed soon.

Currently, BMW is learning lessons from a bunch of modified X5 SUVs running on hydrogen distributed to selected clients. An FCEV model should reach the real market by 2026. To be continued.