Four years ahead of the launch of its first fuel-cell vehicle, Toyota Motor Corp. is shaving manufacturing costs as it attempts to reduce the cost of the vehicle.
Toyota has reduced the amount of expensive platinum content needed for the advanced powertrain technology and developed a less-expensive method of insulating the car's hydrogen tanks, Justin Ward, program manager for Toyota Motor Engineering & Manufacturing North America Inc., said last week.
Ward, speaking at the 2011 Management Briefing Seminars in Traverse City, said the current cost of producing one of the development-stage, fuel-cell vehicles is 10 million yen, or about $129,000 — one-tenth of what it was six years ago. But he said Toyota intends to cut the current cost in half before 2015, and then reduce it again in time for the U.S. retail launch.
At current yen-dollar exchange rates, that would result in a fuel-cell vehicle costing less than $64,000 at launch.
Toyota has not said what brand or segment the product will enter, only that it will be a sedan.
“We're finding ways to reduce the cost through manufacturing improvements, and we expect to make a lot of gains,” Ward said.
For decades, fuel-cell vehicles have been a distant dream for the industry.
For the past 20 years, the advent of fuel-cell vehicles has been much talked about by automaker executives, but typically as a powertrain option that was perpetually 15 years away.
Ward said Toyota will deliver the technology to dealers starting in 2015. He said Toyota estimates the fuel-cell market will balloon to 50,000 units between 2015 and 2017.
“We're way ahead of our development schedule on that car,” he said.
One of the production hang-ups until now has been the manufacturing process of wrapping the vehicle's hydrogen tank with a textile material for insulation. He said Toyota found only a small number of world suppliers who could do the work, and found they took far longer to perform the wrapping than a mass-production auto assembly line would permit.
“We looked at what they were doing and decided there was no way it would ever be possible to manufacture a fuel-cell vehicle under those circumstances,” Ward said. “We do have quite a bit of expertise in handling textiles. So we decided to bring the tank process in-house and do it ourselves.
“We were about to speed up process time sixfold,” he said. “Those are the kinds of improvements we're looking for at this stage.”