California’s New Hydrogen Subsidy Sinkhole: 13 Cars, Millions Spent, Negative Impact

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It’s always fascinating to watch public officials eagerly line up for ribbon-cutting ceremonies, gleaming scissors poised, ready to announce another shiny new clean-transportation initiative. The latest spectacle unfolded recently at UC Riverside in California to celebrate the launch of the Riverside Clean Air Carshare (RCAC) program, featuring a fleet of precisely thirteen hydrogen-powered Toyota Mirai sedans.

If you’re sensing an imminent problem—like perhaps thirteen vehicles hardly constituting a revolutionary breakthrough in zero-emission transport—you’re already ahead of the folks who greenlit this initiative. Even among questionable transportation projects, this one stands out as especially ill-conceived, with a logic that’s roughly as sound as a box of floppy purple velvet hammers.

Let’s dig into the numbers, because they speak volumes. California taxpayers, ever generous, have handed over an eye-watering $3.5 million or so to put these baker’s dozen hydrogen vehicles on the streets. The California Air Resources Board (CARB) alone kicked in $1.5 million, with another million from the Clean Mobility Options Voucher Pilot Program. Additional, unspecified funds flowed from the California Energy Commission, and, just to ensure the bureaucratic frosting was suitably thick, another $1 million came indirectly through a Department of Energy grant aimed at resolving the usual permitting headaches associated with hydrogen. In total, this adds up to roughly $269,000 per vehicle—a figure that would leave even seasoned subsidy hunters gaping in disbelief.

Leasing a Toyota Mirai costs around $44,000 for four years in California. That means there are $226,000 per vehicle unaccounted for.

Clearly, the citizens of Riverside, uniquely among western cities, have no alternatives to expensive rental cars if they want to drive instead of walking, cycling, scootering, or grabbing an Uber. Oh, wait. Several practical carsharing alternatives are already available in Riverside. Zipcar operates at the University of California, Riverside, providing a variety of vehicles, typically sedans and SUVs, and occasionally hybrids or electric models. Getaround offers peer-to-peer car rentals, where residents can choose from various vehicle types, including electric vehicles depending on local availability. Turo also serves the Riverside area, with local hosts frequently renting popular electric models such as the Tesla Model 3, Tesla Model Y, BMW i4, and Rivian R1T. Additionally, Envoy provides electric carsharing as an amenity at select residential developments, featuring vehicles like the Hyundai Ioniq 5, Ford Mustang Mach-E, and Tesla models. So this is a crowded market for rental car alternatives already, and the existing systems have electric cars, which actually make sense, and aren’t getting hundreds of thousands of dollars per car in governmental money.

But surely, you might think, there’s some logic buried beneath this subsidy mountain. Perhaps Riverside is teeming with infrastructure ready to support these hydrogen-powered miracles. Sadly, no. The entire hydrogen refueling infrastructure in Riverside consists of exactly one station. That single lonely station operates strictly on a reservation-only basis and is capable of serving precisely one vehicle every half-hour. Practical? Efficient? Hardly. Anyone capable of basic arithmetic would quickly see that this arrangement couldn’t scale to even modestly greater fleet sizes without causing significant headaches, logistical nightmares, and endless frustration for drivers.

Of course, they realized this. That’s why one of the recipients of significant governmental largesse per car is Mobility Development Operations (MDO), which is managing the fleet, including refueling the cars. I suspect it’s making out like a bandit on this deal. MDO is a national nonprofit organization specializing in community-based carsharing programs, with a focus on affordability, environmental justice, and long-term sustainability. Apparently, it doesn’t understand that hydrogen doesn’t fit any of those three criteria.

Speaking of that hydrogen, let’s talk about its true color. Despite constant promises of “clean” hydrogen production, reality typically remains stubbornly gray. Riverside’s hydrogen supply arrives by truck, delivered in tube trailers filled with hydrogen almost certainly derived from natural gas—rendering any claims of genuine environmental purity laughably hollow. While Toyota Mirais do indeed emit only water vapor from their tailpipes, the upstream emissions remain considerable. The purported environmental benefits quickly evaporate under even a cursory glance at the production chain.

And, of course, hydrogen leaks and causes global warming. It has a 20 year global warming potential 37 times worse than CO2 because it interferes with the degradation of methane in the atmosphere. Now that we have started studying the smallest diatomic molecule in the world’s propensity to leak, we’re finding 1%+ per touch point. Making gray hydrogen, trucking it, pumping it into storage tanks, pumping it into cars, and then driving cars means 5% to 10% leakage of hydrogen along the value chain.

There’s the other problem that will undoubtedly rear its ugly head: these cars very likely won’t be available a lot of the time, and so Riverside’s drivers will rapidly learn to ignore them, choosing reliable alternatives instead. Why do I say this? Well, from global fleet experiences with hydrogen vehicles and refueling. While Toyota Mirais are actually reliable enough, much better than average for hydrogen vehicles, in part because they tend to not be driven very much, hydrogen refueling in California and globally experiences the same problems over and over again. Hydrogen pumps fail. Hydrogen supplies dry up. The odds that both of those things occur for the Riverside refueling solution are very high, and customers will learn not to bother very quickly. The outlook for these rental alternatives, in a market with an extraordinary variety of alternatives, including actually green alternatives, is that they will sit on whatever parking is assigned to them and rarely be used. If they have 20,000 km on their odometers when returned to Toyota in 2029, or earlier if the program is quietly shelved, I’ll be stunned.

Consider the other alternative already on Riverside’s streets—ride-hailing giants Uber and Lyft. Quietly, without fanfare or lavish public ceremonies, tens of thousands of electric vehicles have already integrated seamlessly into these platforms nationwide. Uber alone counts around 180,000 EV drivers in North America and Europe, while Lyft reported that more than 20% of its rides were provided by electric or hybrid vehicles in 2023 already. These companies achieve widespread adoption with minimal direct public subsidy per vehicle, utilizing a rapidly expanding and increasingly affordable network of public and private EV chargers. This infrastructure is proven, scalable, and straightforwardly aligned with California’s aggressive renewable energy goals. Also, it doesn’t get $269,000 per vehicle in inane subsidies.

The comparison could not be clearer. On one hand, we have an eye-popping subsidy for thirteen hydrogen cars, powered by hydrogen of negative environmental integrity. On the other hand, we have tens of thousands of EVs smoothly operating daily with increasingly modest financial assistance, infrastructure growing steadily more robust, and emissions demonstrably dropping as the electric grid gets greener. This raises the obvious question: who actually benefits from the RCAC program?

Certainly, Toyota benefits, soaking up some positive PR for its struggling hydrogen bet. Politicians benefit too, enjoying a fleeting photo opportunity and a green headline for their campaign leaflets. MDO is getting a lot of money for cars that will rarely be used. But the public? Taxpayers? The environment? They lose, each subsidized Mirai representing a missed opportunity to allocate funds towards genuine, scalable decarbonization efforts. If Riverside or California policymakers were serious about clean transportation, redirecting even a fraction of this absurd subsidy towards expanding EV infrastructure or further incentivizing electric vehicles in existing ride-hailing fleets would produce tangible, substantial environmental results.

Instead, Riverside taxpayers have now leased a minuscule fleet of hydrogen sedans whose limited practical utility, negative environmental benefits, and non-existent scalability make them an exemplary candidate for the title “most pointless climate initiative of the year.” As policy goes, it’s genuinely difficult to imagine a clearer example of misguided waste. Oh wait. Fossil fuel subsidies.