The hydrogen fuel cell vehicle market was valued at US$460.428 million in 2020 and is expected to grow at a CAGR of 46.65% over the forecast period to reach a total market size of US$6,717.320 million in 2027.
Mounting concerns across the globe regarding the harmful effects of emissions from vehicles powered by conventional fuels have been pushing the scientific world towards eco-friendly alternatives to power vehicles. Although the renewable energy sector has come a long way in this direction, finding a perfect energy source, that can offer the same level of power and reliability as conventional fuels, is still a target unmet. Huge investments that are flowing into alternative fuels for powering vehicles have been bringing about advancements in the field of hydrogen fuel cells as well. Just like conventional electricity supply, which works on the principle that charge flowing through a wire leads to the flow of electric current, hydrogen also has the capability to produce and deliver huge amounts of energy. Since onboard storage of hydrogen in vehicles in a reliable and safe manner is required, hydrogen fuel cells are expected to bring about the next wave of disruption in the automotive industry. A hydrogen fuel cell can be defined as an electrochemical device that generates electric current or power with the help of reactions that involve chemical gases and oxidants. With the help of anodes and electrolytes, fuel cells split the positive and negative ions in the reactant to generate electricity. What makes this technology very promising for the future is its being very sustainable in nature. Reactants, which are used in fuel cells, do not pose any risk to the environment as a by-product of the chemical reaction between them is water. The high efficiency of this technology makes it fit for use in the generation of direct current (DC) which can power cars and other vehicles. Researchers are working towards integrating hydrogen fuel cells with advanced control systems in order to add sustainability to hydrogen fuel cell vehicles.
Hydrogen fuel cell vehicle market growth is majorly attributed to rising fuel prices across the globe. According to data from the International Energy Agency, the average price of gasoline (world average) stood at US$0.92 per liter, and that for automotive use stood at US$1.00 per liter. These prices continued to show an upward trend until, in 2009, the average price for gasoline and automotive fuel slipped down to US$0.87 per liter and US$0.94 per liter, respectively.
The global recession was at its peak by this time, and demand for automotive fuel had taken a significantly heavy hit. The prices bounced back again and reached US$1.08 per liter for gasoline and US$1.17 per liter for automotive diesel in 2012. Another blow to these prices was witnessed in 2015 and 2016 when the prices for gasoline and automotive diesel tumbled down to US$0.84 per liter and US$0.92 per liter respectively in 2015 and to US$0.78 per liter and US$0.85 per liter, respectively, in 2016. This was the time when Middle East Respiratory Syndrome brought about immense chaos in the Middle East. After recovery from this chaos, the fuel prices continued their movement on the growth trajectory until again, in 2020, amidst the COVID-19 pandemic, these prices dropped drastically. What is interesting to note here is that the prices for fuel have continued to show decent growth except for the times when the world or part of the world has witnessed a major crisis. As this trend continues, fuel prices will continue to remain a key concern for people. This will continue to push them to look for ways this cost can be reduced. This is increasing the popularity of fuel cell vehicles among them, thus propelling market growth.
The popularity of fuel cell vehicles is also being spurred by their continuously declining prices. The FCVs have been witnessing a dramatic decline in prices over the past few years, and this decline will continue to hold ground over the next decade and even beyond that. Interestingly, the production of fuel cell vehicles has been limited till now. Despite this, their prices, especially fuel cell buses have witnessed a drop of more than 60% over the past decade. This decline in prices is majorly attributed to continuous advancements in technology and innovations, which have been catalyzing improvements across solutions. For instance, Ballard Power Systems, which is one of the leading providers of advanced fuel cell solutions that promise superior output at a lower operating cost, recently announced the launch of its 8th generation fuel cell power module, which pushes up the bar for the company had previously set in terms of the performance of fuel cells. The FCmove™, which is the latest fuel cell power module, promises a reduction of around 35% in the total life cycle costs which is better than what previous-generation fuel cells promised.
The company claims that with every launch of new generation fuel cells, this cost gets slashed by more than 33%. Many other companies operating in this segment have been pumping funds rigorously into research and development in order to increase the efficiency of the fuel cell modules they offer. In conjunction with this, other factors like declining prices of hydrogen storage tanks and improvements in the integration of vehicle powertrains have also been driving down the prices of fuel cell vehicles. The race is so competitive that some companies are coming up with hybrid designs in which small hydrogen fuel cells are combined with lithium batteries which are already witnessing a continuous decline in prices. As a result, the total cost of ownership (TCO) of fuel cell vehicles is comparable to that of electric vehicles and lower than that of conventional fuel vehicles. For instance, the fleet of buses, which is part of Europe’s H2Bus Project, is among the fleets which offer very low TCO and zero-emission across regions.
Hydrogen fuel cell vehicles are profitable even from an infrastructure point of view. Although fuel cell vehicles are still somewhat expensive today, their high price is offset to some extent by the fairly low cost that goes into refuelling infrastructure. Simply put, the cost of infrastructure attributed to fuel cell buses goes down as the volume of fuel cell buses increases. On the other hand, an increase in the number of battery-electric buses per charging station increases the infrastructure cost per vehicle since there is a need for more power. In short, hydrogen fuel is expected to continue to get cheaper. As the production of renewable energy at low cost supports the generation of green hydrogen at parity with conventional fuel prices in some regions, we can say that hydrogen fuel cell vehicles are smarter and more cost-efficient modes of mobility and perhaps the future of smart mobility. The adoption of these vehicles is expected to continue increasing over the projected period, thus propelling the market growth.
Geographically, the hydrogen fuel cell vehicle market has been segmented into North America, South America, Europe, the Middle East and Africa, and the Asia Pacific. To give a clearer view, these regional markets have been further segmented into countries that account for a significant share of the market. North America and Europe are known to be the early adopters of new technologies, and these account for a significant share of the overall market. Market growth in these regions is majorly attributed to the presence of state-of-the-art infrastructure which is favourable for the growth of this market. Since supportive infrastructure is available, customers are showing an increase in the degree of inclination they have towards hydrogen fuel cell vehicles. Furthermore, stringent regulations in these regions regarding environmental protection and strict enforcement of such regulations by law enforcement agencies have been pushing people to adopt more sustainable and environmentally-friendly solutions. Although the prices of these vehicles are high, on account of their being new in the market, these regions have a fairly large chunk of the population with high disposable income. These trends are driving the adoption of hydrogen fuel cell vehicles among customers in these regions, thus propelling the market growth.
Asia-Pacific is one of the most lucrative markets for hydrogen fuel cell vehicle manufacturers as this region holds immense growth potential for this market. China, Japan, and South Korea are very lucrative markets for market players as they have the infrastructure to support the adoption of these vehicles. Japan is one of the most advanced economies in the world and has been contributing significantly to the protection of the environment on various fronts. As market players seek to tap into the growth potential held by this region, they are pumping investments into countries. This is expected to continue driving the market growth over the projected period.
Mounting concerns across the globe regarding the harmful effects of emissions from vehicles powered by conventional fuels have been pushing the scientific world towards eco-friendly alternatives to power vehicles. Although the renewable energy sector has come a long way in this direction, finding a perfect energy source, that can offer the same level of power and reliability as conventional fuels, is still a target unmet. Huge investments that are flowing into alternative fuels for powering vehicles have been bringing about advancements in the field of hydrogen fuel cells as well. Just like conventional electricity supply, which works on the principle that charge flowing through a wire leads to the flow of electric current, hydrogen also has the capability to produce and deliver huge amounts of energy. Since onboard storage of hydrogen in vehicles in a reliable and safe manner is required, hydrogen fuel cells are expected to bring about the next wave of disruption in the automotive industry. A hydrogen fuel cell can be defined as an electrochemical device that generates electric current or power with the help of reactions that involve chemical gases and oxidants. With the help of anodes and electrolytes, fuel cells split the positive and negative ions in the reactant to generate electricity. What makes this technology very promising for the future is its being very sustainable in nature. Reactants, which are used in fuel cells, do not pose any risk to the environment as a by-product of the chemical reaction between them is water. The high efficiency of this technology makes it fit for use in the generation of direct current (DC) which can power cars and other vehicles. Researchers are working towards integrating hydrogen fuel cells with advanced control systems in order to add sustainability to hydrogen fuel cell vehicles.
Hydrogen fuel cell vehicle market growth is majorly attributed to rising fuel prices across the globe. According to data from the International Energy Agency, the average price of gasoline (world average) stood at US$0.92 per liter, and that for automotive use stood at US$1.00 per liter. These prices continued to show an upward trend until, in 2009, the average price for gasoline and automotive fuel slipped down to US$0.87 per liter and US$0.94 per liter, respectively.
The global recession was at its peak by this time, and demand for automotive fuel had taken a significantly heavy hit. The prices bounced back again and reached US$1.08 per liter for gasoline and US$1.17 per liter for automotive diesel in 2012. Another blow to these prices was witnessed in 2015 and 2016 when the prices for gasoline and automotive diesel tumbled down to US$0.84 per liter and US$0.92 per liter respectively in 2015 and to US$0.78 per liter and US$0.85 per liter, respectively, in 2016. This was the time when Middle East Respiratory Syndrome brought about immense chaos in the Middle East. After recovery from this chaos, the fuel prices continued their movement on the growth trajectory until again, in 2020, amidst the COVID-19 pandemic, these prices dropped drastically. What is interesting to note here is that the prices for fuel have continued to show decent growth except for the times when the world or part of the world has witnessed a major crisis. As this trend continues, fuel prices will continue to remain a key concern for people. This will continue to push them to look for ways this cost can be reduced. This is increasing the popularity of fuel cell vehicles among them, thus propelling market growth.
The popularity of fuel cell vehicles is also being spurred by their continuously declining prices. The FCVs have been witnessing a dramatic decline in prices over the past few years, and this decline will continue to hold ground over the next decade and even beyond that. Interestingly, the production of fuel cell vehicles has been limited till now. Despite this, their prices, especially fuel cell buses have witnessed a drop of more than 60% over the past decade. This decline in prices is majorly attributed to continuous advancements in technology and innovations, which have been catalyzing improvements across solutions. For instance, Ballard Power Systems, which is one of the leading providers of advanced fuel cell solutions that promise superior output at a lower operating cost, recently announced the launch of its 8th generation fuel cell power module, which pushes up the bar for the company had previously set in terms of the performance of fuel cells. The FCmove™, which is the latest fuel cell power module, promises a reduction of around 35% in the total life cycle costs which is better than what previous-generation fuel cells promised.
The company claims that with every launch of new generation fuel cells, this cost gets slashed by more than 33%. Many other companies operating in this segment have been pumping funds rigorously into research and development in order to increase the efficiency of the fuel cell modules they offer. In conjunction with this, other factors like declining prices of hydrogen storage tanks and improvements in the integration of vehicle powertrains have also been driving down the prices of fuel cell vehicles. The race is so competitive that some companies are coming up with hybrid designs in which small hydrogen fuel cells are combined with lithium batteries which are already witnessing a continuous decline in prices. As a result, the total cost of ownership (TCO) of fuel cell vehicles is comparable to that of electric vehicles and lower than that of conventional fuel vehicles. For instance, the fleet of buses, which is part of Europe’s H2Bus Project, is among the fleets which offer very low TCO and zero-emission across regions.
Hydrogen fuel cell vehicles are profitable even from an infrastructure point of view. Although fuel cell vehicles are still somewhat expensive today, their high price is offset to some extent by the fairly low cost that goes into refuelling infrastructure. Simply put, the cost of infrastructure attributed to fuel cell buses goes down as the volume of fuel cell buses increases. On the other hand, an increase in the number of battery-electric buses per charging station increases the infrastructure cost per vehicle since there is a need for more power. In short, hydrogen fuel is expected to continue to get cheaper. As the production of renewable energy at low cost supports the generation of green hydrogen at parity with conventional fuel prices in some regions, we can say that hydrogen fuel cell vehicles are smarter and more cost-efficient modes of mobility and perhaps the future of smart mobility. The adoption of these vehicles is expected to continue increasing over the projected period, thus propelling the market growth.
Geographically, the hydrogen fuel cell vehicle market has been segmented into North America, South America, Europe, the Middle East and Africa, and the Asia Pacific. To give a clearer view, these regional markets have been further segmented into countries that account for a significant share of the market. North America and Europe are known to be the early adopters of new technologies, and these account for a significant share of the overall market. Market growth in these regions is majorly attributed to the presence of state-of-the-art infrastructure which is favourable for the growth of this market. Since supportive infrastructure is available, customers are showing an increase in the degree of inclination they have towards hydrogen fuel cell vehicles. Furthermore, stringent regulations in these regions regarding environmental protection and strict enforcement of such regulations by law enforcement agencies have been pushing people to adopt more sustainable and environmentally-friendly solutions. Although the prices of these vehicles are high, on account of their being new in the market, these regions have a fairly large chunk of the population with high disposable income. These trends are driving the adoption of hydrogen fuel cell vehicles among customers in these regions, thus propelling the market growth.
Asia-Pacific is one of the most lucrative markets for hydrogen fuel cell vehicle manufacturers as this region holds immense growth potential for this market. China, Japan, and South Korea are very lucrative markets for market players as they have the infrastructure to support the adoption of these vehicles. Japan is one of the most advanced economies in the world and has been contributing significantly to the protection of the environment on various fronts. As market players seek to tap into the growth potential held by this region, they are pumping investments into countries. This is expected to continue driving the market growth over the projected period.
Key developments
- Toyota Motor Corporation revealed the Second Generation Toyota Mirai, a hydrogen fuel cell electric car, in a press release in November 2021. The car has a zero-emission range of 402 EPA-estimated miles, which is roughly 30% more than the first-generation Mirai. On top of that, the company claimed that it would provide US$15,000 worth of hydrogen fuel with the purchase of the car.
- According to a press release dated 17th May 2022, a Memorandum of Understanding was signed by Air Liquide, CaetanoBus, and Toyota Motor Europe with the goal of creating integrated hydrogen solutions. The three firms will share their resources to handle the whole value chain of hydrogen mobility, from sustainable or low-carbon hydrogen generation through distribution and refuelling systems, as well as vehicle deployment. The foremost focus will be on buses, light commercial vehicles, and automobiles, with the goal of accelerating the heavy-duty truck category.
- In a press release by Renault in May 2022, Renault released the Scenic Vision concept car, which runs on an electric and hydrogen powertrain. The vehicle is said to be 95% recyclable, including its battery, and will have a 75% less carbon footprint. The Scenic Vision is a step towards the company’s aim to achieve carbon neutrality in Europe by 2040 and globally by 2050. Renault is aiming toward an all-electrified range by 2030.
Impact of the COVID-19 pandemic
Most organizations were severely impacted by the COVID-19 pandemic. As a result of the shutdown of most important industries, the global economy has been on a downward trend. The automotive industries were also negatively affected by the COVID-19 pandemic. With the implementation of lockdown protocols and the halting of automotive industries, the sales and production of new cars suffered. Lack of labour and raw materials also affected the market. This led to a disruption in supply and production lines, which led to a massive slowdown, even after most lockdown protocols were lifted. Customers were met by long waiting queues, due to vehicle scarcity. However, the market has been recovering at a fast pace, and with the implementation of government norms to reduce pollution and employ renewable power sources; the hydrogen fuel cell market is anticipated to grow substantially.Competitive Insights
Prominent key players in the hydrogen fuel cell vehicle market include Toyota Motor Sales, U.S.A., Inc., Hyundai Motor UK, The BMW Group, Daimler AG, Nikola Corporation, and American Honda Motor Co., Inc. These companies hold a noteworthy share of the market on account of their good brand image and product offerings. Major players in the hydrogen fuel cell vehicle market have been covered along with their relative competitive positions and strategies. The report also mentions recent deals and investments of different market players over the last two years.Market Segmentation:
By Type
- Passenger Vehicles
- Commercial Vehicles
By Geography
- Americas
- Europe Middle East and Africa
- Asia Pacific
Table of Contents
1. Introduction
2. Research Methodology
3. Executive Summary
4. Market Dynamics
5. Hydrogen Fuel Cell Vehicle Market Analysis, By Type
6. Hydrogen Fuel Cell Vehicle Market Analysis, By Geography
7. Competitive Environment and Analysis
8. Company Profiles
Companies Mentioned
- Toyota Motor Corporation
- Hyundai Motor Company
- BayerischeMotoren Werke AG
- Mercedes-Benz Group AG
- Honda Motor Company
- Nikola Corporation
Methodology
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Table Information
| Report Attribute | Details |
|---|---|
| No. of Pages | 85 |
| Published | July 2022 |
| Forecast Period | 2020 - 2027 |
| Estimated Market Value ( USD | $ 460.43 million |
| Forecasted Market Value ( USD | $ 6717.32 million |
| Compound Annual Growth Rate | 46.6% |
| Regions Covered | Global |
| No. of Companies Mentioned | 6 |
