Toyota’s fuel cell car throws down the gauntlet to Elon Musk by Geoffrey Smith @FortuneMagazine June 25, 2014, 11:59 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons Fool cells, schmool cells, Elon Musk. Toyota Motor Co. TM Wednesday unveiled the car that it expects to go toe-to-toe with Tesla Motors Inc.’s TSLA battery-powered ones in the next stage of green vehicle development. At a presentation webcast from Tokyo, head of R&D and board member Mitsuhisa Kato said the company aims to launch the car, powered by a hydrogen fuel cell, in the Japanese market in by April next year, and in the U.S. and Europe by the summer of 2015. The initial price will be a chunky 7 million yen ($69,000) and will have a cruising range of 400 kilometers, more or less in line with Tesla’s Model S. It’s about 30% below what Toyota had previously estimated it would cost–something that Kato put down, in part, to cross-fertilisation from the hybrid-motor technology developed by Toyota for its Prius models. Slow to take off initially, hybrid cars now account for over 10% of Toyota’s global sales. Hydrogen fuel cells generate electricity from the chemical reaction between hydrogen and oxygen, creating water vapor as their only exhaust product. Tesla chairman Elon Musk has been notoriously rude about the technology, calling it “bull****” and, more decently, “a load of rubbish”. Toyota is relying on a Japanese government subsidy scheme to bring the final price down to a level where it can sell in the mass market. Japan, with no oil reserves of its own, has traditionally had a huge incentive to develop alternative motor fuels and is aiming to bring the retail price for fuel cell vehicles down to 2 million yen by 2025. Arguably the biggest challenge for the new technology will be the need to invest massive sums in dedicated infrastructure. Unlike plug-in battery-powered cars, the fuel cells will need to be topped up like a traditional gas tank, only from a whole new network of hydrogen stations. On the plus side, Kato said the FCV could refuel in only three minutes. A spokesman for Toyota in the U.K. acknowledged that the infrastructure question makes the start-up phase a particularly thorny problem. “It’s a sort of chicken-and-egg situation. You have to put the infrastructure where you think the cars are going to be used,” he said. “But the availability of the car will make a big difference” in generating momentum for the project. The U.K., like other countries, has brought together carmakers, gas companies and retailers together to work on a national strategy for rolling out such infrastructure, he said.