The hydrogen fuel cell vehicle market was valued at US$401.980 million in 2019 and is expected to grow at a CAGR of 62.36% over the forecast period to reach a total market size of US$7,364.529 million in 2025. 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 renewable energy sector has come a long way in this direction, finding a perfect energy source, which 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 on-board 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 which 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 by product of the chemical reaction between them is water. High efficiency of this technology makes it fit for use in 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 a data from the International Energy Agency, average price of gasoline (world average) stood at US$0.92 per litre and that for automotive disease stood at US$1.00 per litre. These prices continued to show an upward trend until, in 2009, the average price for gasoline and automotive disease slipped down to US$0.87 per litre and US$0.94 per litre 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 litre for gasoline and US$1.17 per litre 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 litre and US$0.92 per litre respectively in 2015 and to US$0.78 per litre and US$0.85 per litre 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 when 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 a 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 the 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 grounds over the next decade and even beyond that. Interestingly, the production of fuel cell vehicles has been limited till now. Despite this, their price, especially fuel cell buses has 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 catalysing the 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 pushed up the bar the company had previously set in terms of 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 investments rigorously into research and development in order to increase the efficiency of fuel cell modules they offer. In conjunction to this, other factors like declining prices of hydrogen storage tanks and improvements in integration of vehicle’s powertrain 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, 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 the 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 infrastructure point of view. Although fuel cell vehicles are still somewhat expensive today, their high price is offset to some extent by 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, increase in 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 price 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. 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, Middle East and Africa, and Asia Pacific. To give a clearer view, these regional markets have been further segmented into countries which account for a significant share in the market. North America and Europe are known to be the early adopters of new technologies, and these account for a significant share in 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 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 environment friendly solutions. Although prices of these vehicles are high, on account of their being new in the market, these regions have a fairly large chunk of 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 these have the infrastructure which can 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 environment on various fronts. As market players seek to tap 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.
Prominent key market 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 in the market on account of their good brand image and product offerings. Major players in the portfolio management systemmarket have been covered along with their relative competitive position and strategies. The report also mentions recent deals and investments of different market players over the last two years.