Toyota’s announcement today of falling profits is the first step to seeing hydrogen fuel cell cars in showrooms
(Note: To learn more about hydrogen fuel cell cars and their potential to solve the oil crisis, please read the series of articles titled “Twelve Hydrogen Facts” which is part of the Hydrogen Manhattan Project.)
The following article from CNNMoney.com that was published today opens by noting that:
“Toyota said the strong yen and weaker U.S. sales took a bite out of January-March earnings and projected worse was to come - a 27% plunge in its full-year profit.
It would be the first drop in full-year profit in seven years for the automaker.
The results and outlook released Thursday highlight how the tough North American auto market is hammering profits.”
Toyota is arguably the top car company in the world in terms of sales and quality. They have had an incredible amount of success for many, many years. However, high oil prices can even take a toll on the best car company in the world. Today’s announcement of falling profits is an ominous sign of things to come.
The title of Hydrogen Fact #12 is “Many consumers will stop buying cars powered by gasoline as fuel prices continue to rise even further, so car companies will be very motivated to start selling hydrogen cars soon.” The first paragraph states that:
“The days of powering our cars with gasoline in an internal combustion engine will be over much sooner than most people think. High oil prices that will go much higher are taking away the economic viability of our current transportation model. Hydrogen fuel cell cars are the only option for meeting all customer requirements. Therefore, the transition away from oil to hydrogen will begin in the near future.”
Let me say that hydrogen fuel cell vehicles in large numbers will not suddenly show up tomorrow, next month, or next year. People will still continue to buy cars with gasoline-powered internal combustion engines.
However, we may look back years from now at Toyota’s announcement today of falling profits as the beginning of the end of the gasoline-powered internal combustion engine. Toyota is the gold standard when it comes to making money in the auto industry. When their profits begin to go down, you know that the entire industry is in a lot of trouble.
If oil prices were to go back down, this would only be a temporary problem. However, oil prices are going to continue to rise. Global demand is simply outpacing global supply. As I wrote about on Tuesday, a Goldman Sachs analyst (who has an excellent track record of forecasting oil prices) predicts oil could hit $200 a barrel as soon as this year.
How many people are going to be lining up to buy a new car when gas prices are heading towards $5 or $6 per gallon?
Furthermore, Toyota has made tremendous progress with hydrogen fuel cell vehicles. The Toyota FCHV is a mid-size SUV (Highlander Hybrid) powered by a hydrogen fuel cell that gets 80 miles per kilogram of hydrogen and has a driving range of 480 miles.
Although Toyota will never admit it for fear of losing current new car sales to people who might instead wait for hydrogen fuel cell cars, I guarantee you that they are making plans to bring hydrogen fuel cell cars to showrooms. My guess is that the earliest the first hydrogen fuel cell vehicles could be brought to market would be 2011. Although this seems like it is right around the corner, a lot can happen in three years. Just look at how much higher oil prices are now than back in 2005.
Therefore, Toyota would be wise to start being a lot more aggressive (like Larry Burns from GM) about calling on the government and energy companies to build the initial hydrogen fueling stations.
