Policy roadmaps for hydrogen development, reinforced by strategic stakeholder collaborations, are poised to improve access, affordability, and adoption of fuel cell electric vehicles.

The global push towards decarbonizing transport, efforts at realizing affordable production, and a fast-evolving ecosystem are poised to open up exciting growth opportunities for hydrogen powered, fuel cell electric vehicles (FCEVs) in the passenger vehicles segment. Both government and the automotive industry have established hydrogen roadmaps, even as they focus on overcoming challenges related to high production and maintenance costs, nascent supply chains, as well as inadequate refueling infrastructure.

Climate change imperatives and strict carbon emission targets have accelerated government initiatives aimed at increasing hydrogen production. Across the US, Europe and Asia, a range of subsidies, exemptions, and incentives are encouraging FCEV and related infrastructure development.

The US. Department of Energy, for instance, has set an agenda to fast track the production, processing, delivery, storage, and use of clean hydrogen. A $9.5 billion investment has, moreover, been earmarked for clean hydrogen under the Bipartisan Infrastructure Law. The EU has a stated goal of producing 10 million metric tons (Mmt) and importing 10 Mmt of hydrogen, as well as building hydrogen refueling stations (HRS) at every 200 km by 2030.

To learn more, please access our forthcoming reports on Growth Opportunities of Fuel Cell in Passenger Vehicles and Gigafactory Analysis, Forecast upto 2030, our published reports on Strategic Analysis of WBG Semiconductors in Power Electronics Applications for EVs, Forecast to 2030, and Strategic Analysis of Disruptive EV Start-ups, 2023, or contact sathyanarayanak@frost.com for information on a private briefing.

Asia and Asian Automakers Spearhead Market Development
Asia has been spearheading the drive towards hydrogen use. China is currently the world’s largest hydrogen producer. Its green hydrogen development plan targets annual production of 100,000–200,000 Mt of green hydrogen by 2025. Meanwhile, both Japanese and Korean governments are providing strong policy support, with domestic and foreign players contributing to developing the FCEV supply chain in these countries. Japan’s policy blueprint envisages the deployment of 200,000 FCEVs and 320 HRS by 2025 before scaling up to 6.2 million FCEVs and 1200 HRS by 2040. With an eye to reducing costs, the setting up of a robust international hydrogen supply chain by 2030 is also on the anvil.

The buzz is getting louder as vehicle manufacturers start expanding their FCEV portfolios.  Automakers like Hyundai, Mercedes-Benz, Toyota, SAIC, FAW, GAC and Changan already have FCEV models. The market is set to get more crowded with the projected entry of BMW’s X5, Toyota’s Crown Sedan, Hyundai’s Nexo 2024, Land Rover’s Defender FCEV, Honda’s CR-V, and Great Wall Motors’ Saloon SUV.  Competition will further intensify with a range of offerings from start-ups, such as Grove Hydrogen Granite and the Hyperion XP-1.

Collaboration has been a central element in ecosystem development and has brought together tier suppliers, vehicle manufacturers, government, and regulatory authorities, along with hydrogen suppliers, utility providers, and fuel retailers. Reflective of the growing momentum within the industry to drive hydrogen development, Hyundai Motor announced a $6.7 billion investment in late 2022; Honda and GM entered into an agreement to co-develop future fuel cell technologies in early 2023; BMW and Toyota forged a strategic collaboration on hydrogen fuel cell vehicles manufacture in 2022; while Stellantis acquired a 33.3% stake in fuel-cell supplier Symbio in 2023 with the objective of producing 50,000 fuel cells annually by 2025.

The Hydrogen Ecosystem
Japanese and Korean OEMs lead the market in fuel cell technology. Toyota and Hyundai focus on the key markets of Europe, North America and China, with competing automakers set to expand their geographic reach and model availability as infrastructure becomes more established. Toyota’s next generation Mirai is set for launch in 2026 and is expected to be almost 50% cheaper than the current version.

FCEVs OEMs Regional Focus
As technology and infrastructure improve and technical and commercial challenges are overcome, the share of FCEVs is expected to gradually increase to comprise 0.1% of global passenger sales by 2030.  Lowering production costs, whether through the use of enabling technologies or building strong transportation networks, will help progressively expand access, improve affordability, and spur adoption.  Strategic partnerships among key ecosystem stakeholders will fast-track hydrogen development and boost FCEV uptake.

With inputs from Amrita Shetty – Senior Manager, Communications & Content, Mobility

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