About synergetic cooperation and innovative self-image

Mr. Franz, EU Commission President Ursula von der Leyen has announced that a European hydrogen bank is being set up to boost the hydrogen market with an investment volume of three billion euros. How do you assess this initiative?

As much as 5.4 billion euros. In addition, the authority assumes that private investments of about nine billion euros will be made. It is expected that investments of 33 billion euros will be made in Germany alone.

I believe that overall it is a very welcome initiative that shows that progress is being made with hydrogen not only at the country level, but also at the EU level. What comes from the EU is always a signal. Of course, there are already more mature countries that are investing much more. In Germany, we are much better again because the German government, together with the Ministry of Economics, has already selected 62 major projects for this project, which are to be funded with eight billion euros from the federal and state budgets. In conjunction with the Fit for 55 timetable, which provides for hydrogen refueling stations to be set up along the TEN transport corridors (Trans-European Networks) at a certain distance apart, I think this is exactly the right signal from Brussels that we need now - also for energy security and further independence from third countries and oil products such as natural gas.

Toyota, together with GP Joule and CaetanoBus, has announced a joint project to create a regional hydrogen cluster. In addition to fuel production and distribution, you also want to stimulate demand for vehicles. Is this the next evolutionary stage of hydrogen ecosystems?

Today, you have to think further than just "vehicle, supplier, infrastructure provider" and so on. Inevitably, you end up with ecosystems when you think about the whole thing a bit bigger. These can be road-based, but in addition you can think about whether other modes of transport, such as trains, have a role to play. In Spain, Toyota has a cooperation with other partners with CAF, where we will jointly develop and build a hydrogen train. Or trucks and buses: CaetanoBus is a large manufacturer of buses in Portugal, where it is also our importer. In this respect, the decision was relatively obvious. We built a factory together with Caetano in Portugal. GP Joule, although it has been on the market for some time, is still blessed with an insane start-up mentality. This is a company that is involved in the hydrogen sector and has thought ahead on its own, because it started producing green hydrogen in northern Germany and then distributing it at its own filling stations. They also started talking to us very early on, and in the eFarm project they already have Caetano buses in operation for regular service. We are talking about other solutions that we can work on together that are not from-the-cradle-to-the-grave, but start very early. Namely, with regeneratively produced hydrogen that is transported to a filling station and refueled there, in products from our company in the ideal case. For us, that would make a very exciting shoe. Above all, because it is green hydrogen, which is currently offered far too little throughout Germany.

What is the reason for this? And how can the supply be increased?

In order to keep the power grid stable in the balance of generation and consumption, the first thing that is done is to throttle the electricity production of wind turbines and photovoltaic plants as soon as the demand for electricity is low and the grid cannot absorb any more electricity. In addition, there are levies, such as the EEG levy, and large-scale production of green hydrogen in Germany is currently very difficult because the German government insists on the principle of additionality for electrolysis projects in Germany. This means that green hydrogen can only be produced from wind and solar farms that are built in addition, which of course affects the cost of green hydrogen - not to mention the regulatory framework, which often comes with a permitting process that takes years.

In principle, therefore, wind turbines have been shut down in the past rather than using this energy to produce green hydrogen. Last year, for example, an average of almost six terawatt hours of electricity per year was lost in Germany as a result - energy that, if it had been used to produce green hydrogen, could have been used to power over a million hydrogen cars for a year.

A look at the electrolyzer business: Given the rising cost of energy, this will become cost-covering faster than expected - away from small-scale to gigawatt-scale series production - various German, European and international companies are currently expanding their electrolysis production facilities.

How do you basically see the relevance of the formation of ecosystems like the ones I just described for the market ramp-up of hydrogen?

I think it's insanely important and that people are perhaps thinking too briefly in some cases. We have another ecosystem that we are currently building near Venice, where it is also about road-based transport, but of course also, in the next step, about how you can possibly visit the lagoon city with hydrogen boats in the near future. In this respect, forms of mobility are suddenly growing together. That's very important in order to utilize the stations to capacity and make them profitable. If you don't just have cars, but also buses and trucks, it will be much easier.

For battery electric mobility, the bottleneck is charging points, which mutually influence market ramp-up and deployment. How might a combination of hydrogen and e-charging infrastructure anticipate this issue or drive the electrification of transport?

The lack of infrastructure unites both forms of propulsion. We currently have an estimated 55,000 charging points in Germany, 10,000 of which are fast charging points. There are 96 filling stations for hydrogen in Germany. I can easily get around Germany with it. When I have to go abroad, I still have problems with hydrogen because the main traffic routes there are not yet connected. In Germany, I drove 25,000 kilometers in our hydrogen car last year without any problems. In the end, the suppliers could be the same. You read that the classic mineral oil companies want to set up fast charging points with their filling stations. The Totals, Shells and OMVs of this world, to name just a few, are also hydrogen providers and are building much of the infrastructure. In that respect, that can definitely converge, especially on long hauls, on highways and depots. I think it's important to have good coverage here. We are still a long way from achieving this with both technologies, although a great deal has already been invested.

Particularly in the battery sector: I see that 50 million euros have been invested in hydrogen infrastructure by the German government in the last six years. 900 million euros have already been invested in private charging infrastructure. And there is currently a tender for public charging infrastructure worth two billion euros. In this respect, a lot is already happening. If you look at the German government's target of one million charging points - which is once again being called into question - the pace is still nowhere near high enough, especially in the electric sector.

To turn to the use of hydrogen-powered cars and buses in everyday operations: There are particular advantages here for fleet managers or municipal mobility providers via efficiencies in shift operations. Can you explain what that refers to or how best to make that work for you?

I always found the argument insanely relatable to me, which a bus line operator in Spain told me. He was asked about efficiency, because a hydrogen bus is more expensive to buy than a battery-powered electric bus. He replied that if he used this bus, however, he would only need one bus on this line. If he did it with electric, he would need at least two buses on the same line because they would have to alternate charging times. This would make hydrogen technology cheaper.

The municipal utilities in Berlin, for example, already have several hydrogen-powered refuse collection vehicles in operation. They say that the total cost of ownership with purchase etc. is of course still more expensive, but the running costs for a hydrogen vehicle are already lower than for a conventional diesel vehicle. In addition, it should not be forgotten that hydrogen cars - like electric vehicles - generally have fewer parts that can break down.

With Woven City, Toyota is pursuing an innovation strategy in which real cases are developed and tested in this ideal city; in the areas of mobility and energy, but also in the area of urbanism. Can you tell us something from this innovation principle? How is that reflected in the Group?

Let me start a little earlier, before I get to the Woven City. We always talk about a mobility turnaround, but de facto we almost always just talk about a drive turnaround. One thing must be clear to us: The bottom line is that today's cities were created or rebuilt in the 1950s at the latest. You have to bear the following in mind. A current-generation VW Golf weighs more than twice as much as a first-generation VW Golf. And a current-generation BMW 3-series already weighs about 500 kg more than a first-generation BMW 7-series. This, in conjunction with the fact that we drive an average of 39 km per day, have 1.4 people in the car and use the car for only 45 minutes, must actually immediately show that we need to rethink.

This change in thinking began relatively early at Toyota. We have set ourselves the goal of becoming a mobility company. We want to offer mobility and keep people mobile, in whatever way we can. At a certain point, the question then arises: How did we develop mobility in the past? And that was on our test tracks; such as the test track for high-speed testing that was newly built in the 1980s in Shibetsu. In this respect, Woven City must also be seen as a kind of test track. We want to use it to fulfill the UN's Sustainable Development Goals. Woven City is completely people-centered, must be a living laboratory and constantly evolving. We are separating transport and modes of transport in this city. That means we're trying to have delivery traffic run underground as much as possible and order the last mile with drones or autonomously driving small vehicles, for example. We will completely remove pedestrians and cyclists from traditional car traffic, but we are also thinking significantly further ahead. In the meantime, more than 5,000 research projects have been submitted to us, from agriculture, education and healthcare. And we only implement the whole thing with Toyota's own financial resources. If we were to take funding from the Japanese government, we would not be able to design and execute it as freely as we imagine. It all goes into Woven City. I'm really excited once it's finished and I get to visit it for the first time. It's a great way to think about mobility and quality of life in a completely different way and to develop it further.

Thank you very much for the interesting interview.