1. 1 Taiyo Kawai Toyota Motor Corporation Progress and Challenges for TOYOTA’s Fuel Cell Vehicle Development Apr. 2 nd, 2008 NHA Annual Hydrogen Conference 2008 With Hydrogen Expo US

2. 2 Since 1980, oil discoveries in new oil fields have lagged oil consumption, hence ‘Peak Oil’ seems to be inevitable. Source:http://www.oilposter.org( Source:http://www.oilposter.org(Cautious Theory) Prospect for Supply and Demand of Conventional Oil 2030 1930 1950 197019902010 60 50 40 30 20 10 0 Billions of Barrels (Year) Year Projected Discoveries Discoveries Consumption Peak Oil 250 300 350 Time (before 2005) [year] 05000 10000 ppm Carbon Dioxide [ ] 250 300 350 Time (before 2005) [year] 05000 10000 ppm Carbon Dioxide [ ] Time (before 2005) [year] 05000 10000 ppm Carbon Dioxide [ ] ppm Carbon Dioxide [ ] Assessment Report （ 2007 ） : ： Source: ： IPCCFourthAssessment Report （ 2007 ） Changes in CO 2 Concentration Atmospheric CO 2 concentration has dramatically increased since the 20th century. Prompt countermeasures and significant technology innovation are vital.

3. 3 Concept of Energy Source Utilization Mobile Stationary Industry Home (1) ICE / ICE-HV (2) EV (3) FCHV Hydrogen (Gas Fuel) Electricity Liquid Fuel Electricity and hydrogen are expected to be alternatives to liquid fuel. Biomass Solar / Wind Water / Nuclear Petroleum Natural gas Coal

4. 4 50 100 Volumetric Energy Density (Gasoline=100) Hydrogen- absorbing alloy(2wt%) High pressure hydrogen (35MPa) CNG (20MPa) Ethanol Lithium-ion battery 0 Gasoline Diesel Liquid fuel Gaseous fuel Electricity High pressure hydrogen (70MPa) Toyota estimate Volumetric Energy Density of Various Fuels Hydrogen has lower volumetric energy density than liquid fuels. Li-ion batteries have even lower energy density. Li-ion batteries have even lower energy density.

5. 5 06012020100 50 100 4080140 Potential and Limit of PHEV Source: 1990 Nationwide personal Transportation survey (%) PHEV can cover 20 – 30 % of total energy consumption. Cumulative percentage of personal automobiles Cumulative percentage of travel distance Approx. 20% Approx. 35% Average Daily Travel Distance per Vehicle (miles) American Driving Patterns

6. 6 TOYOTA’s Plan for Sustainable Mobility Toyota is actively developing hybrid technology to serve as a core technology applicable to all powertrains Ultimate eco-car Right place Right vehicle Right time Gaseous fuel ElectricityHydrogen Synthetic fuel Bio fuel Hybrid Technology Gasoline / Diesel

7. 7 Present 2015 ’02 FCHV (lease model) Vehicle 125 miles135 miles 300 miles or more -22degF ~ 15 years or more Dec. 2002 ~Jul. 2005 ~ 32degF ~ Toyota has significantly improved actual cruising range and cold start / driving capability. Towards the popularization of FCHV, we continue efforts especially on FC stack durability and FC system cost reduction targeting commercialization in 2015. TOYOTA FCHV Progress Improved FCHV 1/10 or less (design / materials) *Fuel Cell Commercialization Conference of Japan ’05 FCHV (lease model) Technical Challenges 2. Actual Cruising Range 1. Cold Start / Driving Capability 3. FC Stack Durability 4. Cost reduction 32degF ~ FCCJ* Target

8. 8 1. Cold Start / Driving Capability Current Status of Each Automaker Several automakers announced significantly improved cold start / driving capability. Honda FCX Clarity Honda Daimler B-Class F-Cell Daimler TOYOTAFCHVTOYOTAFCHVGM Equinox Fuel Cell GM Planned in the fall of ’08 (Officially announced) (Officially announced) Targeting ’10 (Officially announced) Since the fall of ‘07 Improved FCHV -13degF (-25degC) -22degF (-30degC) Source of pictures: each automaker’s web site (excluding TOYOTA FCHV)

9. 9 The cold-weather performance tests verified that the cold start and driving performance of the improved TOYOTA FCHV was equivalent to that of gasoline-powered vehicles. °C -40 -30 -20 -10 0 10 外気温 [ ℃ ] 2/102/122/142/16 2/18 -34.6degF (-37degC) -34.6degF (-37degC) 1.Cold Start / Driving Capability Performance Test at Timmins, Canada Ambient Air Temperature at Timmins Ambient Air Temp. 10 (degC) 0 -10 -20 -30 -40 50 32 20 0 -20 -40 (degF) 2/8 Date

10. 10 （ ）（ ） （ ）（ ） （ ）（ ） （ ） Each maker’s officially announced mode cruising range (Reference) mode cruising range (Reference) （ ） Each maker’s officially announced mode cruising range (Reference) mode cruising range (Reference) （ ）（ ） 1000 1500 2000 Vehicle Weight (kg) Actual Cruising Range (km) 300 400 500 600 700 800 ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ Actual cruising range of gasoline vehicles:300~400miles ◆◆ Actual Cruising Range (mile) 200 400 300 500 100 200 2. Cruising Range Current Status of Each Automaker Honda FCX Clarity Honda Daimler B-Class F-Cell Daimler TOYOTAFCHVTOYOTAFCHV GM Equinox Fuel Cell GM Actual cruising range of 300 miles is required to be competitive with gasoline engine vehicles. Targeting ’10 (Officially announced) ’05 model FCHV Planned in the fall of ’08 (Officially announced) (Officially announced) Since the fall of ‘07 Source of pictures: each automaker’s web site (excluding TOYOTA FCHV)

11. 11 （ ）（ ） （ ）（ ） （ ）（ ） 1000 1500 2000 Vehicle Weight (kg) Actual Cruising Range (km) 300 400 500 600 700 800 ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ ◆◆ Actual Cruising Range (mile) 200 400 300 500 100 200 ◆◆ （ ）（ ） 460 miles (*1) 330 miles (*2) The improved TOYOTA FCHV has achieved an actual cruising range of over 300 miles *1 In LA#4 test cycle *2 Actual range in internal test cycle （ ） Each maker’s officially announced mode cruising range (Reference) mode cruising range (Reference) （ ） Each maker’s officially announced mode cruising range (Reference) mode cruising range (Reference) 2. Cruising Range Current Status of Each Automaker Honda FCX Clarity Honda Daimler B-Class F-Cell Daimler TOYOTAFCHVTOYOTAFCHV GM Equinox Fuel Cell GM Targeting ’10 (Officially announced) Improved FCHV Planned in the fall of ’08 (Officially announced) (Officially announced) Since the fall of ‘07 Source of pictures: each automaker’s web site (excluding TOYOTA FCHV)

12. 12 1. H 2 Storage Capacity: approx. 90% UP 2. Fuel Economy: approx. 25% UP Increase H 2 storage capacity while minimizing the increase in size and mass of H 2 tank. + i.Increase tank pressure: 35MPa  70MPa 35MPa  70MPa ii.Thin carbon fiber layer of tank body iii.Downsize valve system & change materials iv.Reduce residual/unusable gas Reduce auxiliary system loss + Increase regenerative braking energy The successfully extended cruising range was accomplished by increasing H 2 storage capacity approx. 90% and improving fuel economy approx. 25%. 2. Cruising Range Approach to Extend Cruising Range 15% decrease in loss ‘05 Model FCHV Improved FCHV -4000-200002000400060008000 Regeneration energy Auxiliary battery power Cooling water pump Hydorogen pump power Air Compressor power Cross over Anode purge FC stack heat loss High-voltage converter loss Motor Inverter loss Driving energy energy consumption [KJ] 25% increase in regenerative energy

13. 13 *: measured by internal test cycle **: Gasoline equivalent Load [%] Fuel cell system efficiency [%] 64% 55% As a result, cruising range in test cycles is also considerably extended and FC system efficiency has improved up to 64%. 330 mile 480 mile LA#4 test cycle 460 mile 10-15 Japanese test cycle Actual driving cycle *1 In-house test Amount of fuel [liter] On-board fuel capacity [liter] *2 Improved FCHV FCHV *2Improved 600km 500km 400km 300km 200km ’05 model FCHV Gasoline vehicles Actual fuel economy *1 [km/liter] 90% 25% 2. Cruising Range Improved TOYOTA FCHV + +Improved FCHV ** ’05 model FCHV

14. 14 2. Cruising Range Challenges for Hydrogen Storage Technology In order to develop a lighter and smaller hydrogen tank system, further fundamental research is required. Goal High-pressure hydrogen Hydrogen-absorbing alloy Liquid hydrogen 35MPa 25MPa 70MPa Organic hydride Advanced hydrogen-absorbing alloy Carbon nano material Tank Volume (L) SmallLarge Tank Weight (kg) Heavy Light

15. 15 3. FC Stack Durability MaximumOutput Durability Equivalent to 15 years 0 Crossover Amount Reduction of physical deterioration MEA1 MEA2 Reduction of chemical deterioration MEA3 Threshhold limit value MEA1 MEA2 MEA3 - Durability has been improved by more than three times. - Further efforts are being made especially for reduction of MEA deterioration under real-world conditions.

16. 16 As an initial step, we aim to reduce the cost to 1/10 of the current level by design / manufacturing engineering and materials improvement. Reducing costs By innovative design, material, manufacturing engineering ’05 Model FCHV By mass production Cost ImprovedFCHV Model generation Resolving technical issues 1/101/10 1/101/10 4. Cost Reduction

17. 17 4. Cost Reduction Approach to Achieve 1/10 of Current Level TOYOTA FCHV (2) Material: cost reduction of FC-system- specific materials  Important to cooperate with materials manufacturers (1) Design / manufacturing engineering: 1. simple system 2. compact & light FC stack 3. rapid production process

18. 18 Summary of Technical Challenges for TOYOTA FCHV Cruising Range CostCost Light Weight / Compactness Stack Durability HalfHalf DoubleDouble Weight / Size Driving Range Cost Operating Temperature ’05 Model Goal ’05 Model Goal 105degC -30degC High & Low Temperature ’05 Model Goal ’05 Model Goal TripleTriple Durability Next targets ApproachingtargetApproachingtarget 1/10 by design / materials × 1/10 by mass production 1/10 by design / materials × 1/10 by mass production

19. 19 1. Vehicle marketability Resolving technical challenges, reducing cost, and adding new appeal to the products Factors for Successful Commercialization of FCVs Fine-N 2003 Tokyo Motor Show 2. Hydrogen infrastructure development H 2 production, transport & supply; CO 2 sequestration technology; Codes & Standards 3. Increased societal acceptance of various energy sources Global warming, depletion of resources, energy security Fine-X 2005 Tokyo Motor Show

20. 20 Solar / Biomass ElectricityElectricity PetroleumPetroleum Natural gas CoalCoal -Production storage method method -CO 2 stabilization -H 2 cost -Transportation storage method -Infrastructure development -Codes & standards -H 2 cost (transportation, infrastructure) infrastructure) -Stack durability -Compactness & high power density power density -Cold start capability -Cruising range -Vehicle cost Production Transport / Storage / Supply Vehicle Automakers Government, Fuel Industries Issues for Hydrogen Fuel H2H2 H 2, etc. Issues

21. 21 Challenges of Infrastructure Development, Hydrogen Pathways Refueling H 2 Transport / Storage / Supply Liquid H 2 H 2 Production 2. Liquid H 2 by truck FCHV Solar/Biomass Electricity Petroleum Coal Station Liquid H 2 Onsite H 2 Production Trigeneration Station Electricity/Hot water/H 2 1. Pipeline Gaseous H 2 Excess by-product H 2 High Pressure H 2 with CCS What is the optimum pathway? In terms of right timing, right place, and right technologies. Natural gas Others? 3. Chemical hydrides by truck by truck Chemical hydrides etc.

22. 22 Towards Popularization of FC Vehicles In Japan, FCCJ has agreed that automakers and energy companies promote technology development and codes & standards establishment targeting 2015. Low emission 20022008 2030 2015 Business phase Low CO 2 Energy security Phase FCVDevelopment 1st FCHV, Limited leasing Limited leasing Demonstration R&D / Product Development Manufacturing Engineering Mass production Low volume production Initial market penetration Hydrogen Infrastructure Social Needs Government support phase FCCJ Target

23. 23 1. For the diversification of energy sources and CO 2 reduction, early commercialization of FCVs are urgent and vital matters. 2. The popularization of FCV requires: 1) 1)Vehicle marketability 2) 2)Hydrogen infrastructure development 3) 3)Increased societal acceptance of various energy sources 3. Toyota is overcoming the technical challenges of: Summary Towards commercialization of FCV, Toyota focuses on improving durability/reliability and reducing costs. 1) 1)Actual cruising range of 300 miles or more 2) 2)Cold start capability at -22degF (-30degC) 4. Toyota is working together with energy companies and the government towards creating a hydrogen society, including codes & standards development and hydrogen infrastructure preparation.

24. 24 TODAY for TOMORROW