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The hydrogen vehicle market comprises hydrogen fuel cell vehicles that utilize hydrogen as fuel to generate electricity to power an electric motor. Hydrogen fuel cells offer zero emissions and can provide a driving range comparable to gasoline vehicles on a single fill-up. The primary advantages of hydrogen vehicles include high energy efficiency, minimal CO2 emissions, and quick refueling. Rising environmental concerns and stringent emission norms are encouraging automakers to invest in developing clean fuel technologies. Fuel cells produce electricity through an electrochemical reaction between hydrogen and oxygen without any combustion, thereby emitting only water and heat.
The Global Hydrogen Vehicle Market is estimated to be valued at US$ 5.89 Bn in 2024 and is expected to exhibit a CAGR of 28% over the forecast period from 2024 to 2031.
Key Takeaways
Key players operating in the Hydrogen Vehicle Market are Toyota Motor Corporation, Hyundai Motor Company, Honda Motor Co. Ltd., Daimler AG., Audi, BMW, General Motors, MAN, Ford Motor Company, and VOLVO. Toyota launched its Mirai fuel cell sedan and established a network of around 100 hydrogen stations in California in 2020. Hyundai has delivered over 1,600 units of its Nexo fuel cell SUV till date and aims to sell 80,000 Fuel Cell Electric Vehicles (FCEVs) globally by 2030.
The demand for zero-emission vehicles is increasing drastically owing to stringent government regulations on vehicular emissions. Various nations have implemented financial incentives and subsidies for hydrogen fuel infrastructure development and vehicle purchases to drive adoption. California has set a goal of deploying 200 hydrogen stations by 2025 to support over 250,000 FCEVs on roads.
Major global automakers are expanding their portfolios of hydrogen fuel cell models and exploring new markets in Europe, China, Japan, and South Korea. Toyota aims to sell 30,000 FCEVs annually by 2030 globally. Daimler plans to introduce fuel cell trucks and buses as it sees potential in commercial vehicle segments. The increased global focus on sustainability and investments in hydrogen refueling stations will drive the large-scale adoption of fuel cell vehicles.
Market key trends
One of the major trends in the hydrogen vehicle market is the reduction in the cost of proton exchange membrane (PEM) fuel cells. Continuous technological advancements and economies of scale are helping lower PEM fuel cell costs from $56/kW in 2015 to below $40/kW in 2020 – bringing it closer to cost parity with internal combustion engines. Automakers are targeting PEM fuel cell stack costs under $30/kW to enable competitive pricing for mass-market fuel cell vehicles. Various upgrades in materials and manufacturing processes are expected to meet this target by 2024-2025.
Porter’s Analysis
Threat of new entrants: The threat is low to medium as it requires large investments for infrastructure development and access to well-established supply chains.
Bargaining power of buyers: The bargaining power of buyers is medium to high as they have options from established automakers.
Bargaining power of suppliers: The bargaining power of suppliers like hydrogen fuel cell manufacturers and raw material producers is medium as the industry is consolidated with a few large players.
Threat of new substitutes: The threat is high from electric vehicles as they have widespread infrastructure and falling battery costs.
Competitive rivalry: The competitive rivalry is intense among the top automakers to develop affordable hydrogen fuel cell vehicles and build refueling infrastructure.
Geographical Regions
The Asia Pacific region accounts for over 50% of the global Hydrogen Vehicle Market value led by Japan, South Korea and China. This is due to significant government investments and initiatives to develop hydrogen infrastructure in these countries.
Germany accounts for a quarter of the European hydrogen vehicle market due to dedicated refueling stations and incentives for fuel-cell vehicles. Other major European countries include France, the UK and Italy. However, Europe lags behind Asia in overall market adoption.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
