Noboru Ikeda 
A rendering of the hydrogen production facility Toyota plans to introduce at its headquarters plant in 2026. Photo taken on February 19 in Koto Ward, Tokyo. (©Sankei by Noboru Ikeda)
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What kind of company is Toyota? Today, most people would say it's a top-selling automaker. However, in 10 or 20 years, the answer might be different.
One emerging view is that Toyota is evolving into a provider of hydrogen and electric energy systems.
As the automotive industry undergoes a once-in-a-century transformation, its ties to social infrastructure are strengthening. Cars are becoming incubators for business innovation, expanding the role of automakers far beyond manufacturing.
Toyota has partnered with Chiyoda Corporation, a leading plant engineering company, to commercialize a large-scale electrolysis system. This joint project builds on the technology behind Toyota's fuel cell vehicle (FCV), the Mirai.
Hydrogen Technology
FCVs generate electricity through an electrochemical reaction between hydrogen and oxygen. The new system works in reverse. It uses proton-exchange membrane (PEM) electrolysis to produce hydrogen by splitting water into hydrogen and oxygen with electricity. This process relies on an electrolytic membrane and a catalyst to facilitate the reaction.
Compared to similar systems from major companies like Germany's Siemens and the United States' Plug Power, Toyota's system can produce two to three times more hydrogen per unit area.
A key advantage is its flexible design. The number of core components (cell stacks) can be adjusted to meet different hydrogen supply needs. By 2026, Toyota plans to introduce a commercial device capable of producing about 100 kilograms of hydrogen per hour at its headquarters plant in Aichi Prefecture.
The Japanese government is also pushing hydrogen forward, offering subsidies to bridge the price gap between hydrogen, ammonia, and traditional fuels like natural gas. It is also accepting business plans until this March for hydrogen supply networks set to launch by 2030. Selected projects will receive up to 15 years of support.
Toyota and Chiyoda aim to roll out megawatt-scale equipment by 2028 and gigawatt-scale equipment by 2029. According to Toyota Hydrogen Factory Chief Project Leader Yoshihiko Hamamura, Toyota is also considering smaller-scale equipment for hydrogen stations catering to FCVs. Collaborations with other companies to build hydrogen supply networks are also in the works.
Battery Storage
While much attention is focused on the electric vehicle (EV) market, the broader impact of the automotive transformation extends far beyond it.
For example, Tesla, a leader in EVs, is expanding its battery storage business for power grids. In Japan, Orix plans to install large storage batteries at one of the country's largest power storage facilities in Shiga Prefecture. This facility is set to begin operation by 2027.
These storage systems are crucial for stabilizing renewable energy sources like solar and wind, which fluctuate with weather conditions. As the adoption of renewable energy grows, the demand for such technologies will only increase.
Toyota is also developing a high-efficiency battery storage system using repurposed vehicle batteries, aiming for commercialization by 2027.
Toyota's FCV competitor Honda plans to enter the stationary battery storage market using fuel cells starting in 2026. Innovations in FCVs and EVs — from efficient hydrogen production to renewable energy storage — also play a vital role in Japan's energy security, given the nation's limited natural resources.
Toyota's Vision for the Future
However, the impact of automotive innovation goes beyond energy. A striking example is Toyota Woven City, an experimental smart city under construction in Susono City, Shizuoka Prefecture for testing next-generation technologies.
In 2018, then-President Akio Toyoda announced Toyota's shift from a traditional automaker to a "mobility company" — offering a wide range of transportation-related services. What once seemed abstract is now materializing with the rise of software-defined vehicles (SDVs).
Just as smartphones use apps to function as gaming consoles, transit passes, or payment terminals, SDVs can extend their roles beyond transportation. Equipped with autonomous driving technology, AI, and vast data networks, these vehicles could become mobile theaters, classrooms, or more — seamlessly integrating with social infrastructure.
The Road Ahead
The spread of SDVs and vehicle-centric apps is expected to spark innovation among startups and create new business opportunities across industries. Next-generation vehicles are like trees, branching into new businesses and sprouting innovative services. Woven City will serve as a hub where entrepreneurs can nurture these trees.
Despite the breakdown of merger talks, Honda and Nissan continue exploring collaboration in EVs and SDVs. They have kept the door open for new technologies to take root alongside Toyota.
With the first phase of Woven City set to open later in 2025, Toyota is accelerating its transformation beyond car manufacturing. The question remains: can Honda and Nissan also grow giant trees that revitalize Japan's economy?
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(Read the article in Japanese.)
Author: Noboru Ikeda, The Sankei Shimbun
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