• Bloomberg


Toyota Motor Corp. is funding a startup led by General Motors Co.’s former marketing chief to accelerate the opening of hydrogen fuel stations in California for zero-emission cars.

Toyota is backing FirstElement Fuel, led by Joel Ewanick, with an investment of at least $7.2 million, according to letters filed with the California Energy Commission and obtained by Bloomberg News. FirstElement, based in Newport Beach, California, plans to operate pumps and sell hydrogen for passenger cars from at least 19 new stations in California.

The automaker’s support for the closely held company comes as California provides grants worth $46.6 million for hydrogen fuel stations that will help firms including Toyota, Hyundai Motor Co. and Honda Motor Co. build a market for hydrogen fuel-cell vehicles arriving this year and next.

“This is really the first step in creating a fueling network that for the first time allows people to use their cars with no limitations,” Ewanick, FirstElement’s CEO, said in an interview. The company received the most grants, landing $27.6 million.

The California Energy Commission grants will open 28 new hydrogen stations and one mobile refueler in the state, Rachel Grant Kiley, a commission officer, said in a phone interview. California, with just nine public hydrogen stations open and 17 in development, announced a program last year worth as much as $200 million to create a 100-station network over a decade.

The figure California announced, the largest such award in the U.S., is more than double the $20 million that carmakers had expected from the state, the biggest U.S. auto market. Vehicles running on hydrogen fuel cells, used in spacecraft since the 1960s, produce power through an electrochemical reaction of hydrogen and oxygen, with water vapor the only exhaust.

Toyota plans to sell a Camry-size fuel-cell sedan, as yet unnamed, to California customers in 2015. Honda promises a replacement next year for its FCX Clarity sedan, now leased to a few dozen Los Angeles-area drivers. Hyundai is about to start leases for a fuel-cell version of its Tucson, a crossover vehicle already available in South Korea.

Bob Carter, Toyota’s senior vice president, said in January that the carmaker was prepared to help create a hydrogen station network in California, without elaborating.

“The first few years here in California will be a critical period for hydrogen fuel-cell technology,” Carter said in a statement Thursday. “Through this financial arrangement with FirstElement, Toyota is showing its full commitment to deploy zero-emission fuel-cell vehicles here.”

The carmaker’s total financing commitment to FirstElement hasn’t been determined, said John Hanson, a spokesman for Toyota.

“The actual amount of financial assistance will be based on an analysis of the grant of the award to FirstElement by the CEC,” with final approval anticipated in June, Hanson said.

The state energy commission isn’t aware of any other automakers financially supporting hydrogen fuel station operators, said Lori Sinsley, a deputy executive director of the Sacramento-based agency.

Automakers are under pressure in California and across the U.S., Europe, Japan and South Korea, to offer vehicles that emit little or no carbon and reduce petroleum use.

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