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The project aims to build just seven refueling stations, with help from Shell and a $16 million taxpayer-funded grant.

Toyota and Honda have announced a collaborative project with Shell subsidiary Equilon to build seven new hydrogen refueling stations in California.The Shell-branded stations will be located in San Francisco, Berkeley, Sacramento, Citrus Heights and Walnut Creek.

The number of open retail stations has more than doubled in the past year, however there are currently less than three dozen sites spread across the entire state.

Investors appear to be reluctant to put money into hydrogen refueling infrastructure as fuel-cell vehicles face increasing pressure from pure electric vehicles and plug-in hybrids. Hydrogen stations are much more expensive to build than EV charging equipment, which can be added to existing parking spots and at owners' homes.

The lack of refueling stations has likely contributed to poor sales of FCVs, which, in turn, appears to discourage further buildout of hydrogen infrastructure.

The seemingly high cost of building a hydrogen station may be reflected in the latest partnership announcement. The project is being partially funded by $16 million in taxpayer funds via a California Energy Commission grant, along with financial support from Toyota and Honda.