Hydrogen Fuel Cell Vehicle Market

Market Overview

The global hydrogen fuel cell vehicle market size was valued at USD 5.05 billion in 2022. It is estimated to reach USD 460.27 billion by 2031, growing at a CAGR of 65.1% during the forecast period (2023–2031). An increase in awareness of the consequences of air pollution and the rise in traffic and greenhouse gas emissions drive the adoption of hydrogen fuel cell vehicles because it is more environmentally friendly than other traditional automobiles.

A hydrogen fuel cell vehicle (FCV) is a vehicle that uses hydrogen gas as its fuel source to generate electricity via a chemical reaction in a fuel cell. Unlike conventional gasoline or diesel-powered vehicles, FCVs do not burn fuel but instead use electrochemical processes to convert hydrogen and oxygen into electricity, with water being the only byproduct. The heart of an FCV is the fuel cell stack, which contains multiple individual fuel cells. Each fuel cell consists of an anode and a cathode separated by an electrolyte membrane. The anode side of the fuel cell is supplied with hydrogen gas, while oxygen from the air is supplied to the cathode side. At the anode, hydrogen molecules are split into protons and electrons. The electrolyte membrane allows the protons to pass while an external connection allows the electrons to flow, creating an electric current. The protons, electrons, and oxygen combine at the cathode to form water.

However, there are some challenges associated with FCVs. One major hurdle is the limited availability of hydrogen fueling infrastructure, which restricts the widespread adoption of FCVs. Additionally, hydrogen production and distribution require dedicated infrastructure and processes, and cost considerations and technical challenges are still related to fuel cell system durability and efficiency.

Market Dynamics

Global Hydrogen Fuel Cell Vehicle Market Drivers:

Increase in Environmental Concern

Owing to the rise in concerns about environmental degradation and depletion of natural resources, various technologies are being launched in the market that support the eco-friendly concept of sustaining the environment. Moreover, an increase in awareness of the consequences of air pollution and the rise in traffic and greenhouse gas emissions drive the adoption of hydrogen fuel cell vehicles because it is more environmentally friendly than other traditional automobiles.

Government Initiatives for the Development of Hydrogen Fuel Cell Infrastructure

One of the key drivers for the global hydrogen fuel cell vehicle market is the support and initiatives governments worldwide take to promote the development of hydrogen fuel cell infrastructure. Governments recognize the potential of hydrogen as a clean and sustainable energy source for transportation and are implementing policies and programs to encourage the adoption of hydrogen fuel cell vehicles. Many countries have set ambitious targets to reduce greenhouse gas emissions and combat climate change. Hydrogen fuel cell vehicles offer a viable solution as they produce zero tailpipe emissions, contributing to cleaner air and reduced carbon footprint. Governments are providing incentives and financial support to vehicle manufacturers and infrastructure developers to accelerate the deployment of hydrogen fuel cell vehicles.

Government initiatives include funding research and development projects, establishing hydrogen fueling stations, and implementing supportive regulations and policies. They also provide subsidies and tax incentives to make hydrogen fuel cell vehicles more affordable and attractive to consumers. These initiatives create a favorable ecosystem for the increase in the hydrogen fuel cell vehicle market, stimulating investments, innovation, and infrastructure development.

Global Hydrogen Fuel Cell Vehicle Market Restraints:

High Initial Investment in Infrastructure

Hydrogen fuel cell technology offers powertrains that do not emit tailpipe greenhouse gases and other harmful pollutants like nitrogen oxides and particulate matter. This feature helps to attract vendors towards the use of this technology. However, the high cost of raw materials such as platinum in the fuel cell anode and carbon fiber to produce the hydrogen fuel tanks and others required to develop hydrogen infrastructure is expected to hamper the market growth.

Global Hydrogen Fuel Cell Vehicle Market Opportunities:

Technological Advancement and Future Potential in the Hydrogen Fuel Cell Vehicle Market

Increased research and development activities related to hydrogen fuel cell technology have led to a rise in joint developments and partnerships regarding adopting the HFCV market. One of the major agreements in the HFCV market is the European Union's Trans-European Transportation Network (TEN-T), which is expected to develop national implementation plans for hydrogen fuel cell vehicles and hydrogen refueling stations in different European countries such as Belgium, Finland, and Poland. Moreover, joint ventures and technological advances regarding HFCV provide a major growth opportunity for the market.

Regional Analysis

Based on region, the global hydrogen fuel cell vehicle market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America Dominates the Global Market

North America is the most significant global hydrogen fuel cell vehicle market shareholder and is estimated to grow at a CAGR of 67% over the forecast period. The North American market is studied across the U.S., Canada, and Mexico. High investment in advanced technology for better transportation and growth in environmental concerns regarding the emission of hazardous air pollutants fuel the growth of this region's hydrogen fuel cell vehicle market. North America is a dominant market for hydrogen fuel cell vehicles, with major players offering HFCV.

Further, this region's rapid development of hydrogen refueling stations (HRS) drives market growth. U.S. and Canada collectively accounted for about 90.4% share of the North American hydrogen fuel cell vehicle market in 2018, with the former constituting around 64.8%. During the forecast period, Mexico and Canada are expected to grow at a CAGR of 71.0% and 69.8%, respectively. The cumulative share of these two segments was 35.2% in 2018 and is anticipated to reach 38.9% by 2026.

Europe is anticipated to exhibit a CAGR of 64.9% over the forecast period. The European market is analyzed across the U.K., Germany, France, Russia, and others. The healthy economic conditions have led to a high adoption rate of advanced transportation technology. The extensive hydrogen infrastructure network in major European cities and new FCEV models from manufacturers are beginning to drive hydrogen-based fuel cell vehicle market adoption.

Additionally, environmental harmful factors such as air pollution and high consumption of limited energy by diesel-powered and gasoline vehicles drive the hyperloop technology market in this region. The initialization from the PAN-European is planning to invest Euro 26 million (Pounds 22.8m) to introduce 180 fuel cell electric vehicles (FCEVs) into a combination of taxi, private-hire, and police fleets. This project will help improve the economics of operating hydrogen refueling stations and also help accelerate the commercialization of hydrogen as a zero-emission fuel for Europe’s cities. In addition, in February 2018, €57 million (~USD 64.4 million) in Europe was funded for the JIVE and JIVE 2 projects to supply 300 fuel cell buses and accompanying infrastructure to 22 European cities by 2023.

Asia-Pacific includes China, India, Japan, Australia, and others. The market in this region is at a developing stage and is expected to witness a high growth rate during the forecast period. Increasing government initiatives to augment hydrogen fuel cell infrastructure drive this region's hydrogen fuel vehicle market. Further, the domestic presence of hydrogen fuel cell vehicle (HFCV) OEMs in this region and the rise in environmental concern fuels the market growth.

In addition, according to the South Korean government, the transition to a hydrogen economy will create roughly 420,000 new jobs and USD 38.2 billion by 2040. Japan and South Korea collectively accounted for about 59.9% share of the Asia-Pacific hydrogen fuel cell vehicle market in 2018, with the former constituting around 38.6%. During the forecast period, India and China are expected to grow at a CAGR of 72.7% and 72.2%, respectively. The cumulative share of these two segments was 33.0% in 2018 and is anticipated to reach 37.0% by 2026.

The market in LAMEA is analyzed across Latin America, the Middle East and Africa. This region is anticipated to exhibit a slower growth rate than other regions, owing to the lower adoption of HFCV. Latin America is forecasted to witness significant growth; however, the Middle East and Africa are expected to gain traction, but the growth would be stable during the forecast period. According to the Middle East and North African Automotive Association, the Middle East has a distinct advantage over other regions as it can produce electricity from the Sun for a much lower cost than Western Europe. Also, this country has a higher potential to encourage industrial and commercial use of hydrogen fuel cell vehicles, which fuels the market's growth.

Furthermore, Siemens is promoting hybrid sources of clean fuel in this region, and it has signed an agreement with the Dubai Electricity and Water Authority for a pilot solar-powered hydrogen electrolysis setup at Mohammed bin Rashid Solar Park. This project aims to produce hydrogen using photovoltaic technology.

Segmental Analysis

The global hydrogen fuel cell vehicle market is bifurcated into vehicle type and technology.

Based on vehicle type, the global hydrogen fuel cell vehicle market is bifurcated into passenger vehicles and commercial vehicles.

The passenger vehicles segment dominates the global market and is projected to exhibit a CAGR of 66.2% over the forecast period. A passenger car is designed for a seating capacity of not more than nine people (including the driver) and is used to carry passengers. A passenger vehicle is the largest segment among all the vehicle types. It contributes more than 75% of the revenue in the hydrogen fuel cell vehicle market owing to the high sales of passenger vehicles compared to other commercial vehicles.

In addition, the passenger vehicle segment is forecasted to be the fastest-growing vehicle type in the market, owing to its vital role in reducing greenhouse (GHG) emissions in the transportation industry. Unlike diesel-powered and gasoline vehicles, HFCVs do not generate any GHG emissions during vehicle operations. Further, the extensive support from the government, the eco-friendly nature of HFCV, and developments in aggressive hydrogen refueling stations contribute toward the growth of this segment.

Based on technology, the global hydrogen fuel cell vehicle market is bifurcated into proton exchange membrane cells, phosphoric acid fuel cells, and others.

The proton exchange membrane cells segment dominates the global market and is projected to exhibit a CAGR of 68.1% over the forecast period. A proton exchange membrane fuel cell operates at relatively low temperatures, around 80°C. Low-temperature operation allows these cells to start quickly, resulting in less wear and tear on system components and better durability. It is the most common type of fuel cell and allows for variable electrical output, which is ideal for vehicle use. Advancements in fuel cell technology and electricity generation from resources such as coal, coke, tar, organic waste, and biomass powered by solid carbon are expected to help generate clean and efficient electricity. The innovation in designing three components, such as anode, electrolyte, and fuel, help operate at lower temperatures and exhibit higher maximum power densities than direct carbon fuel cell (DCFC).

The U.S. and Japan collectively accounted for about 39.7% share of the proton exchange membrane hydrogen fuel cell vehicle market in 2018, with the former constituting around 26.1%. During the forecast period, India and Africa are expected to grow at a CAGR of 73.2% and 73.1%, respectively. The cumulative share of these two segments was 7.1% in 2018 and is anticipated to reach 8.6% by 2026.

Recent Developments

• March 2023- Toyota announced plans to produce 10,000 Mirai fuel cell cars annually by 2025.

• June 2023- California Air Resources Board (CARB) Announced plans to require all new passenger cars and light-duty trucks sold in California to be zero-emission vehicles by 2035.

• June 2023- U.S. Department of Energy (DOE) Announced plans to invest USD 100 million in research and development of hydrogen fuel cell technology.