Hydrogen for Mobility in South Africa

ANDREW KIRBY President and CEO OF Toyota South Africa Motors Apr 13, 2021 1 2 3 4 5 Complex Global Problems

Images: ref error! Images: ref error! Images: ref error! Climate Change Energy Security Bio hazards [GHG, CO2e]

Complex problems require simple and collaborative solutions!

Hydrogen for Mobility 1 2 3 4 5 Emergent Global Auto Themes

Powertrain BEVs, connectivity & digitalization, FCEVs, and PHEVs have established themselves as the most Diversification important key trends in the industry since 2017.

Regulatory Regulators and industry politics driving technological agendas where subsidy strategies and Pull tax breaks will be essential instruments.

It is expected that localisation and a country’s Raw Materials mineral resources will dictate the country’s preferred powertrain technology.

Sustainability [ESG] is expected to be a key Sustainability differentiator.

Images: ref error! Adapted: KPMG GAES 2020

Hydrogen for Mobility 1 2 3 4 5 Key Auto Trends Projection to 2030

Globally South Africa

KPMG GAES 2020 KPMG GAES 2020 Top 5: NEV’s [BEV, FCEV, HV] Top 5: NEVs, Connectivity and Connectivity, growth in Emerging Understanding the Mobility Countries. Ecosystem. 1 2 3 4 5 Toyota 2050 Environmental Challenge To go beyond zero environmental impact and achieve a positive net impact, Toyota has set itself six challenges. All these challenges, whether in climate change or resource and water recycling, are beset with difficulties, however we are committed to continuing toward the year 2050 with steady initiatives in order to realised sustainable development with society.

Expected shift in mix of powertrains required to achieve 90%

CO2 reduction.

CO2 Vehicle Sales Vehicle

CO2 2010 2020 Mass scale electrification 2050 expected after 2020

Hydrogen for Mobility 1 2 3 4 5 Necessity and Diversification of Electric Vehicles

Electric vehicles will enable the reduction of CO2e in the mobility sector.

Hybrid Plug-in Hybrid Battery Electric Fuel Cell Electric

Electric vehicles cover a broad range and need to coexist to the demand of the market and the availability of Energy Source! Adapted TME

Hydrogen for Mobility 1 2 3 4 5 Criteria to determine the ideal mix of Powertrains  Advantageous ～ × Disadvantageous ICE HEV PHEV BEV FCEV Fuel Saving [Tank to Wheel] Δ O   

CO2 Reduction Δ O ~  Subject to WtT CO2 Vehicle Cost  O Δ ~ O Δ Δ Cruising Range    Δ ~ O  Recharging frequency   Δ ~  Δ  Charging time   O Δ  Infrastructure   Δ ~  Δ X Total Evaluation ? ? ? ? ? This view is based on current real world data and could change over time Hydrogen Council, TWIMS 2021, TMC 2019 There is no single solution and each product needs to be evaluated against the uniqueness of each country/timeline/energy availability/policy/ infrastructure/ consumer preferences/, etc. Hydrogen for Mobility 1 2 3 4 5

Pursuing Zero Emissions – H2 and FCEV’s

Green H2 and FCEV Combination Benefits of Hydrogen FCEV Benefit Explanation Safety Hydrogen is as safe as petrol and diesel.

Reliability Less moving parts than an ICE.

Energy density Hydrogen is more energy dense than lithium and LNG. + Range Comparable range to existing ICE vehicles. Refuelling time Comparable to ICE (5 minutes). FCEV Weight H2 is significantly lighter than a battery pack and gasoline. Zero Emissions Vehicle Lowest carbon Mining of lithium gives off pollution. = footprint (Green H2)

Price In the long-term price of green H2 will be Ultimate Green Solution cheaper than LNG. Zero CO emissions Resolves tank to wheel CO issues. Green H2 in an FCEV is the Ultimate 2 2 Zero Emissions Vehicle. Availability Is in abundance and can be sourced from a variety of primary energy sources. Adapted, csnews.com, Toyota Adapted, Toyota, TWIMS 2021 Hydrogen for Mobility 1 2 3 4 5 Fuel Cell Production Vehicle – Mirai 2020

Equipped with a new fuel cell system that is high performance, com pa ct and lightweight, with a long cruising range

Newly developed fuel cell unit (incl. fuel High-pressure hydrogen tanks cells, fuel cell boost converter and High output motor power control unit) Li-Ion Battery Output Maximum output: density:5.4kW/L 134kW（182PS） /6,940r.p.m. Maximum output:128kW（174PS）

Cruising range per tank (reference value) ［ 、 G“Executive Package” ＊ ［Z“Executive Package”、Z］ ＊ G“A Package”、G］ Approx. 850 km Approx.750km toyota.com The 2020 Mirai performance is comparable to that of ICE and other Electric Powertrains in terms of range. A symbolic breakthrough for Hydrogen as an energy source in Mobility!

Hydrogen for Mobility 1 2 3 4 5

World Deployment of H2 Stations Nordic MOU UK Developed hydrogen UKH2Mobility: Northeast states promotion program in Plan for 67 sites Japan Project started, aiming Nordic countries for 100 sites by 2020 160 sites by 2020 Scandinavia 320 sites by 2025 H2USA establishment, UK 900 sites by 2030 aiming at the infrastructure construction by DoE and private organizations. Germany France California NY China Korea Japan

Germany 400 sites by 2023 Hawaii California Announced H2 Mobility 40 sites expected by 2018 China 200 sites by 2025 100 sites by 2020 350 sites by 2025 1000 sites by 2030 In operation Planned Areas where infrastructure Areas where infrastructure development Not in operation development can be expected after 2015 can be expected from early 2015 As at 2017 various countries committed to Hydrogen Infrastructure lead by Japan and China! Hydrogen Council, TMC 2019 Hydrogen for Mobility 1 2 3 4 5 View of Energy Ecosystem Hydrogen Electricity FCV EV

EVs/PHVs

Wind power Battery storage facilities Thermal power Renewable Electricity grid energy Fossil fuels

Solar power City/homes Industrial use Hydrogen OIL Electricity LNG Conversion Hybrid cars Electrolysis Biomass Power-generator unit Hydrogen grid Hydrogen City/homes Oil refineries/ tanks Chemical plant chemical plants Sewage treatment City/homes Energy flow High-volume, Automotive fuel FCVs / FC buses long-term storage Electricity Hydrogen Fossil fuels TMNA, Kast 2018 An energy co-existential ecosystem!

Hydrogen for Mobility 1 2 3 4 5 SA Automotive Policy Progression 1,400k • Creating certainty geared towards FDI • Enabling structural reformation South African Automotive • Driving transformation Master Plan [SAAM] • WTO compliant trade related 2021 – 2035 investment measures 600K APDP Fully integrated, inclusive and enabling master plan

Industry maturity Industry 2013 - 2020 500K Further Export MIDP Growth, 1995 – 2012 Manufacturing Support 300K Export Growth & Production Rationalisation

Time The progressive automotive policies in South Africa are testament to strength of pro government/industry collaboration. Hydrogen for Mobility 1 2 3 4 5 SAAM Vision ‘35 and 6 pillar Framework SAAM 2035 VISION A globally competitive and transformed industry that actively contributes to the sustainable development of South Africa’s productive economy, creating prosperity for industry stakeholders and broader society Objectives: 1% of global vehicle production, 60% local content, 100% employment growth, competitiveness to leading competitor standards, industry transformation, increased value addition within GVCs

Technology and Associated Regional Local Market Localisation Infrastructure Industry Skills Market Optimisation Development Transformation Development Development 1 2 3 4 5 6

Supporting institutional environment Enabling policy post 2020

NEV Technology and Technical Competence are scarce in SA with limited players in the space and limited demand and products currently.

Hydrogen for Mobility 1 2 3 4 5 SA Electric and FCEV Readiness  Mature/Advanced, Δ Infancy × Not Started/Disadvantage

Drivetrain Infrastructure/ Regulation/ Technology Cost Competence/ Demand/ /Charging/ Policy Accessibility/ Skills Market Refuelling Product growth/Scale Stations Availability ICE ~ 4,600      HV/PHEV/BEV* Δ- Δ+ Δ+ X Δ- Δ- ~ 141 FCEV** X X X X X X *Under the SAAM the SA Automotive Industry and government are currently establishing NEV sales targets for 2025 and 2030 for Pass. Vehicles. This will need to be enabled by subsidy strategies and tax breaks as essential instruments. ** For FCEV there is currently no firm intentions regarding infrastructure, regulation, etc. and there is no known demand for FCEV in SA.

Hydrogen for Mobility 1 2 3 4 5 Electric Powertrains – Positioning of FCEV

BEV

(Battery Capacity) System

BEV FCEV Cost Advantage (H2 Tank Capacity)

FCEV Advantage

Cruising Range TMC, TWIMS 2021 Based on current data BEV has cost advantage for shorter cruising range, while FCEV has cost advantage for mid-to- long cruising range.

Hydrogen for Mobility 1 2 3 4 5 FCEV Positioning on Total Cost of Ownership

2. Expected TCO year of parity for FCEV ranges in relation to BEVs and ICE vehicles Year of Year of 1. Infrastructure Type of parity with parity with vehicle Usage Range ICE BEV •BEV had a head start hence will be Small PV Short range 200 km 2035 2050 Large PV (i.e. stronger here. SUV) Long range 600 km 2030 2030

LCV Long range 650 km 2030 2025

MCV Short range 300 km 2025 2030 3. 2. Total Cost HCV Long range 500 km 2025 2020 Performance of Ownership XHCV Long range 600 km 2025 2020 [TCO] •Driving range is a key indicator Bus Short range 150 km 2025 2040

Bus/Coach Long range 500 km 2025 2025

TWIMS 2021 Based on available data, FCEV should have cost Key differentiators between BEV vs FCEV. parity on long range vehicles with ICE by 2025 [HCV/XHCV/Bus]

Hydrogen for Mobility 1 12 23 34 45 5 FCEV Positioning on Performance 3. Performance Comparison

Performance Indicator FCEV BEV Passenger Vehicle Toyota Mirai Tesla Model 3 Range 750km – 850km 423 km (568 km for long-range model) Refuelling time 5 minutes 9 hours (40 minutes for rapid 80% charge) Power output 134 kw 211 kw Top speed 175 kph 225 kph 0-100 kph 9 seconds 5.3 seconds Buss Brand 1 FCEV Brand 1 Elec City BEV Range 434 km 210 km Refuelling time 15 minutes 72 minutes Power output 180 kw 240 kw Heavy Truck Brand 2 FCEV Brand 2 BEV Range 1207 km 563 km Refuelling time 20 minutes "several hours" Power output 745 kw 745 kw 0-100 kph 30 seconds 30 seconds TWIMS 2021 FCEV’s show better performance over longer range!

Hydrogen for Mobility 1 2 3 4 5 Potential Market in SA for FCEV

2016 2017 2018 2019 2020

Total PAS 353,195 360,943 357,717 349,822 243,332

Total LCV 159,316 163,317 159,525 153,221 110,912

Total MCV 8,436 7,890 7,885 8,690 6,735

Total HCV 5,468 5,306 5,374 5,041 4,090

Total XHV 11,816 11,978 13,126 13,350 11,200

Total Bus 1,248 1,082 1,070 931 728 The HCV, XHCV and Bus Market in SA is currently ~ 16,000 per annum. This segment of the market normally operates on fixed and predefined routes therefore suited to a ‘controlled environment!’

Hydrogen for Mobility 1 2 3 4 5

Toyota's Key Initiatives towards H2 Mobility O = In Market Δ = In Prototype Study ? = Announced

1. Passenger Car – Mirai 1. Passenger Car – Mirai 2. Bus 2. Truck – Long Range [TMNA/Hino US] 3. Modular Generator 4. Truck – Long Range [TMNA/Hino] 5. Trains and Ships

O O O Δ ? O Δ Toyota also leads with 360 FCT patents as at 2020.

1. Passenger Car – Mirai 1. Passenger Car – Mirai 2. Bus 2. Toyota Hydrogen Centre [Production 3. Truck – Long Range and Refuelling Station by TMCA]

O O Δ O O

Hydrogen for Mobility 1 2 3 4 5

7 Necessary Ingredients to realise H2 for Mobility

Demand/ Developing Scale Technology Cost / Product Competitive Access -ness

Regulation/ How? Policy

Skills/ Infrastructure Competence

Time to Images: ref error! market

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Hydrogen for mobility is complex and requires an appropriately enabled environment and strong stakeholder will to bring it to market! 1 2 3 4 5

Developing a H2 Mobility Value Chain

Infrastructure

Energy Energy Electrolysis Source generation

Compression Storage Transport Storage Refuelling FCEV

Adapted gmobility.eu Hydrogen infrastructure will require investments in renewable energy sourcing, energy generation, hydrogen production, hydrogen storage, hydrogen transportation and hydrogen refuelling sites.

Hydrogen for Mobility 1 2 3 4 5 Toyota SA – FCEV Initiatives to be piloted in SA • Toyota SA is committed to a greener SA and creating value and thus decided to investigate the following pilot introductions of selected FCEV’s into the SA. • Toyota SA will form partnerships with key stakeholders to enable this.

Passenger Vehicle [Mirai] • Currently available in many countries. • TMC will consider export destination based on stringent criteria such as 7 key ingredients specifically Regulation, Policy and Infrastructure.

Bus [Europe Caetano] • Currently available in Europe. • Similar requirements for export to SA i.e. Regulation, Policy and Infrastructure, etc.

Heavy Duty Truck [TMC/Hino] • Currently in prototype development.

Adapted gmobility.eu The access to these technologies[products] will require a sound value proposition from South Africa that is ultimately enabled by SA Governments commitment! Hydrogen for Mobility 1 2 3 4 5

Developing the H2 Mobility Economy Roadmap The pilot initiatives should provide the much needed answers to the key ingredients of infrastructure, regulation, technology, demand, cost competitiveness, skills, competence and time to market. This should define, inform and enable the SA long term roadmap. Generation Supply Chain Utilisation

Energy Production Storage Transportation Transport and Mobility Source

Electrolysis Compression, Passenger cars, LCV, Buses, Green, Blue, Pipeline, Truck or Ground, Coaches, Heavy Transport Grey? or Ship? Reforming? Liquefaction? and Long Distances?

Can SA create the demand Can SA Produce efficiently Can SA supply it efficiently and for FCEV with apt. tax and at best market cost? on appropriate logistics routes? subsidy structures?

Adapted Framework: compact.nl/en/articles/hydrogen-fuel-cell-technology-is-an-important-piece-of-the-puzzle-in-an-electric-future-of-mobility/ These answers should unlock socio-economic value and reveal SA’s long term commitment to Hydrogen and be translated into key actions to realise a Hydrogen Mobility Economy in SA. In the longer term a broader collective and collaborative approach across Government, Industry and Public should be pursued! Hydrogen for Mobility 1 2 3 4 5 Summary and Closing FCEV technology whilst a compelling solution towards addressing energy security and climate change, has various limitations and obstacles that need to be overcome for an FCEV market to launch at necessary scale!

Recap of FCEV benefits and advantages and challenges and current limitations

Benefits/Advantages Challenges

Cost to produce Green Infrastructure [Well Sustainability Refuelling time H2 + Fuel efficiency [Well to tank] i.e. Cost to Tank]

Total Cost of H Mobility Performance over 2 CO footprint of ownership over Technical 2 longer ranges Brown and Grey H longer rangers Competence 2

Product access, Government Energy Storage Scalability availability and market direction and demand at scale regulation

Adapted Framework: compact.nl/en/articles/hydrogen-fuel-cell-technology-is-an-important-piece-of-the-puzzle-in-an-electric-future-of-mobility/

Hydrogen for Mobility