Future of Hydrogen in Automotive Trends [2022-2035]

The Future of Hydrogen in Automotive [45 Pages Report], study analyses the demand for hydrogen fuel cell vehicles, developments in automotive ecosystem and major developments by the OEMs and Tier. The study involved four major activities in estimating the market size of the hydrogen fuel cell vehicles in the ‘Future of Hydrogen in Automotive’ study. Exhaustive secondary research was done to collect information on the market, the peer market, and the child markets. The next step was to validate these findings, assumptions, and sizing with the industry experts across value chains through primary research. The top-down and bottom-up approaches were employed to estimate the complete market size. Thereafter, market breakdown and data triangulation processes were used to estimate the market size of segments and subsegments.

The global hydrogen fuel cell vehicle demand is projected to grow from 20 thousand units in 2022 to 1,280 thousand units by 2035, at a CAGR of 37.6%.

Factors such as rising demand for low-emission commuting and government subsidies and tax breaks for zero-emission vehicles, abundant fuel availability, ease of refueling and lower environmental degradation will create new opportunities for hydrogen fuelled vehicles. They are expected to be an alternative for EVs in the coming years. Leading OEMs have already started providing/developing hydrogen powered vehicles such as FCEVs, H2-ICEVs and FCHEVs across different vehicle categories. OEMs such as Hyundai, Toyota and Riversimple have also started developing new business models around hydrogen fuelled vehicles. Riversimple, for instance has its own pay per mile business model, where cars are not sold to users, but leased out. Similarly, Toyota provides direct sales, as well as innovative business models such as subscription based services as well as fuel card plans. Further, Hyundai has also developed on direct sales and fleet based business models. Such developments are expected to drive the demand for hydrogen market for automotive in the coming decade.

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Market Dynamics:

Driver: Lower emissions

The use of hydrogen fuel presents a significant reduction in emissions compared to Diesel or Gasoline fuelled ICE vehicles. Hydrogen combustion in fuel cells primarily produces water vapor, minimizing carbon dioxide emissions. In contrast, traditional ICE vehicles emit substantial amounts of CO2 during the combustion of fossil fuels. Additionally, hydrogen combustion generates negligible carbon monoxide and virtually eliminates NOX emissions, pollutants commonly associated with internal combustion engines. This cleaner combustion profile positions hydrogen fuel as a promising alternative for mitigating environmental impact and addressing climate change concerns.

Opportunity: Lower environmental degradation

In the pursuit of sustainable transportation, hydrogen fuelled vehicles present a compelling advantage over electric vehicles in mitigating environmental degradation during development. Unlike EVs, which rely on resource-intensive processes such as lithium mining for batteries, hydrogen FCVs donot require large batteries, significantly reducing the ecological impact of production. Additionally, FCVs bypass the need for rare earth elements, minimizing habitat disruption associated with their extraction. As the market navigates through the evolving landscape of sustainable transportation, the environmental edge of hydrogen fuelled vehicles in will become pivotal alternative to electric vehicles.

“Buses are expected to be the largest commercial vehicle type during the forecast period.”

The hydrogen fueled Bus segment is expected to have a significant demand during the forecast period, especially in European countries, Japan, and China. These countries plan to convert their public transport bus fleets to zero-emission vehicles. This offers a significant opportunity for the growth of the automotive fuel cell bus market. For instance, in September 2019, a Chinese bus manufacturer, Golden Dragon, received an order for 100 hydrogen fuel cell buses worth USD 21 million from Jiashan county, Zhejiang province. These buses were expected to be delivered in 2020. In the 2022 Beijing Winter Olympic games, Geely was appointed as the transport provider. It deployed 80 units of the C12F hydrogen fuel cell buses to meet the requirement. European countries such as Denmark, France, Germany, Netherlands, and the UK have ordered fuel-cell buses to replace the current ICE bus fleets in their public transport systems. In addition, projects such as H2BusEurope, 3EMOTION, Clean Hydrogen in European Cities (CHIC), and Cogeneration of Hydrogen and Power (CH2P) are expected to propel the growth of the fuel cell electric bus market in the region. For instance, H2BusEurope plans to deploy 600 fuel cell buses, and 200 of these are expected to be delivered to Denmark by 2023. Various industry experts state that Europe is ready to deploy fuel-cell vehicles. Ballard Power Systems also announced that ?a quarter of the key cities in Europe are expected to deploy fuel-cell buses by 2025.

“FCEV segment will be the largest market by propulsion type during the forecast period.”

During the forecast period, the FCEV segment is expected to lead the market during the forecast period. Most hydrogen fueled vehicles being launched over the years are FCEVs. This includes Beseselling FCEV Passenger Cars such as Toyota Mirai, Hyundai NEXO. Similarly, in the Van segment, most H2 fueled vehicles such as Citroen e-Jumpy, Peugeot-e Hydrogen, Opel Vivaro-e Hydrogen are FCEVs. Further, amongst buses and trucks, hydrogen fuelled vehicles such as Hyundai Elec City FCEB, Wrightbus Hydroliner FCEV, Hyzon Hymax, Hyundai XCIENT are also FCEVs. Market for FCHEVs and H2-ICE Vehicles are currently very Nische, and demand is expected to grow moderately during the forecast period.

“Asia Pacific to lead the market during forecast period”

The Asia Pacific region anticipates substantial growth in the hydrogen fuel cell vehicles, driven by proactive policies from key nations. This includes plans for developing green hydrogen and setup of hydrogen refuelling stations across the region. China currently leads the global market for hydrogen fueled Buses and Trucks with its setup of CV only hydrogen refuelling stations across key cities. Similarly, India has also announced plans for increasing green hydrogen capacity to provide for the future demand. Ashok Leyland and Tata Motors have announced plans for making H2-ICE vehicles in the future. Further, Japan plans to have around 800,000 FCEVs on roads by 2030. Similarly, South Korea has also announced plans for 6.2 million FCEVs on road by 2040. Such factors are expected to lead to the continued dominance of hydrogen fueled vehicles in the Asia Pacific region.

Key Players

The future of hydrogen in automotive is expected to be led by established players such as Toyota Motor Corporation (Japan), Hyundai Motor Company (South Korea), Honda Motors (Japan), BMW Group (Germany), Stellantis (Netherlands) among others.

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