TOKYO (Reuters) – China, Japan and South Korea have set ambitious goals to put millions of hydrogen vehicles on their roads by the end of the next decade at a cost of billions of dollars.
FILE PHOTO: Hydrogen Air Station for Hydrogen Fuel Cell Vehicles Seen in Paris, France, October 1
But to date, hydrogen fuel cell vehicles (FCVs) are were supported by electric vehicles, which are increasingly becoming a major option due to the success of Tesla Inc. luxury cars ( TSLA.O ), as well as sales and production quotas set by China.
Critics argue that FCV can never be more than niche technology. Hydrogen-fueled proponents are the cleanest energy source for cars available and that with time and more charging infrastructure, it will receive acceptance.
China, by far and away the largest auto market in the world with about 28 million vehicles sold annually, is aiming for over 1 million FCVs in operation by 2030. This compares to just 1500 or more now, most of which are buses.
Japan, the market for more than 5 million vehicles a year, wants to have 800,000 FCVs sold by then of about 3400 currently.
South Korea, which has a car market just one-third larger than Japan, has set a target of 850,000 cars on the road by 2030. But by the end of 2018, fewer than 900 have been sold.  WHY HYDROGEN?
Hydrogen proponents state how clean it is as an energy source, since water and heat are the only by-products and how it can be made from a number of sources, including methane, coal, water, even garbage. Resource-poor Japan sees hydrogen as a way to increase energy security.
They also claim that the driving ranges and charging times for FCVs are comparable to gasoline vehicles, while EVSs require reloading hours and provide only a few hundred kilometers of range.
Many supporters in China and Japan see FCVs as complementary EVs instead of replacing them. In general, hydrogen is seen as the more effective choice for heavier vehicles that travel longer distances, hence the current focus on city buses.
Only a handful of automakers have made commercially available fuel cell passenger cars.
Toyota Motor Corp ( 7203.T ) launched the Mirai sedan at the end of 2014, but sold less than 10,000 worldwide. Hyundai Motor Co ( 005380.KS ) has been offering the Nexo crossover since March last year and has sold just under 2,900 worldwide. It had sales of around 900 for its previous FCV model, Tucson.
Honda Motor Co Ltd & # 39; s ( 7267.T ) fuel cell for clarity is available for rent, while Daimler AG's GLC F-CELL is delivered to several corporate and public customers sector.
Buses are in increasing demand. Both Toyota and Hyundai have been offering deals and have started selling fuel cell components to bus manufacturers, especially in China.
Several Chinese manufacturers have developed their own buses, notably the state-owned SAIC Motor ( 600104.SS ), the largest automaker in the country, and Geely Auto Group [GEELY.UL]which also owns Volvo Cars and Marks Lotus.
WHY FUEL CELL KITS ARE NOT USED
The lack of expensive gas stations is generally cited as the biggest obstacle to the widespread introduction of FCV. At the same time, the main reason given for the lack of fueling infrastructure is that there are not enough FCVs to be profitable.
Consumers' concerns about the risk of explosions are also a major obstacle and residents in Japan and South Korea are protesting against the construction of hydrogen stations. An explosion of a hydrogen tank in South Korea killed two people this year, followed by a blast at a hydrogen station in Norway.
Then that's the price. Heavy subsidies are needed to bring prices down to petrol cars. Toyota's Mirai costs consumers just over 5 million yen ($ 46,200) after a 2.25 million yen subsidy. This is still about 50% more than the Camry.
The automakers claim that as sales volumes increase, economies of scale will make unnecessary subsidies.
HOW THE CELLS WORK
($ 1 = 108.15 yen)
Reported by Kevin Buckland in Tokyo; Additional reporting by Yilei Sun in Beijing and Hyunjoo Jin in Seoul; Editing by Edwina Gibbs