Toyota aims to increase acceptance of fuel cell cars by pricing its latest Mirai hydrogen-powered sedan below that of a long-range full-electric car.
The second-generation Mirai will cost from 64,000 euros ($77,800) when it goes on sale in Europe next year, below the 82,900 euros Tesla charges in Germany for its similar-sized Model S Long Range Plus with 100 kilowatt-hour battery.
Toyota is targeting a 10-fold increase in global sales of the Mirai. The automaker limited European sales of the current model to about 800 over its five-year lifespan.
Toyota said the Mirai's driving range has been increased by 30 percent to 650 km (404 miles) by changes such as increased hydrogen fuel capacity, better aerodynamics and significant reductions in the size and weight of all its main components.
The Mirai's range matches that of the Tesla Model S Long Range Plus as measured under Europe's WLTP standard.
The Mirai's fuel tank takes five minutes to fill from a hydrogen filling station, far less than it takes to recharge a large battery.
The Mirai is Toyota's flagbearer for the benefits of hydrogen as a zero-emissions road fuel, with each generation reducing the cost from the one before.
"It plays a similar role to what Prius was doing for hybrid technology," Toyota Europe's powertrain boss, Thiebault Paquet, told Automotive News Europe.
The new Mirai costs 20 percent less in Europe than the current car.
Toyota expects to sell about 1,500 Mirais next year in Europe, rising to around 2,000 a year.
Toyota said that it will improve its fuel cell technology and reduce costs for the third-generation Mirai to the point it would see "widespread use."