Toyota Motor Corporation (TM - Free Report) announced plans to ramp up the production of hydrogen-powered vehicles at its two facilities. One of the two facilities will manufacture hydrogen fuel stack mass while a new line will be added to an existing facility for producing high-pressure hydrogen tanks. The decision is in line with Toyota’s projection that global sales of fuel cell electric vehicles (FCEV) will increase to at least 30,000 units per year after 2020. At present, the figure is 3,000 units per year.
In order to increase fuel cell stack production, the facility will be shifted from its existing location to Honsha Plant in Toyota City. Further, the production of high-pressure hydrogen tanks will be handled by its Shimoyama Plant in Miyoshi City. Production at the new sites will begin around 2020.
In December 2014, the company introduced its mass-produced fuel cell sedan, Mirai, to the market. Due to high manufacturing costs and difficulty in building its components, Mirai was initially manufactured in small lots. Gradually, the annual production and sales increased from around 700 units in 2015 to roughly 2,000 units in 2016.
Toyota Motor Corporation Price and Consensus
Mass production of the hydrogen fuel stack and high-pressure hydrogen tanks will help Toyota to lower the price of FCEVs, and expand its accessibility to more countries and regions. Currently, Mirai is sold in eleven countries.
Earlier, the company announced $1.1-billion investment to manufacture usual and hybrid RAV4 sport utility vehicles in Canada. In December 2017, Toyota announced its plan to construct a megawatt-scale carbonate fuel cell power generation plant at the Port of Long Beach.
Except for Toyota, other automakers are also manufacturing fuel cell vehicles while a few are in the stage of developing the technology.
In the past six months, Toyota’s stock has moved up 5.1%, outperforming 1.4% increase of the industry it belongs to.
Zacks Rank & Stocks to Consider
Toyota currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Daimler AG (DDAIF - Free Report) , BMW AG (BAMXF - Free Report) and Allison Transmission Holdings, Inc. (ALSN - Free Report) . Daimler and BMW carry a Zacks Rank #2 (Buy) while Allison Transmission sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Daimler has an expected long-term growth rate of 5%. Shares of the company have risen 5.7% over the past year.
BMW has an expected long-term growth rate of 4.5%. Shares of the company have risen 9.3% over the past year.
Allison Transmission has an expected long-term growth rate of 10%. In a year’s time, shares of the company have gained 11.7%.
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