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The hydrogen fuel cell vehicle market has seen significant growth over the past decade. Hydrogen fuel cell vehicles run on hydrogen gas stored in high-pressure tanks, with hydrogen reacting electrochemically with oxygen in the fuel cells to produce electricity that powers the vehicle. Fuel cells are more efficient at converting hydrogen into electricity than combustion engines which burn hydrogen. With zero Tailpipe emissions besides water vapor, fuel cell vehicles help reduce vehicular pollution and lower carbon emissions compared to gasoline or diesel vehicles. Battery electric vehicles have limitations in terms of range, refueling time and costs. However, hydrogen fuel cells address these issues providing longer range and faster refueling similar to gasoline vehicles.
The Global Hydrogen Fuel Cell Vehicle Market is estimated to be valued at US$ 3.48 Bn in 2024 and is expected to exhibit a CAGR of 54% over the forecast period 2024 to 2031.
Growing demand for emission-free transportation along with supportive government policies to develop hydrogen infrastructure is expected to drive the adoption of fuel cell vehicles globally.
Key Takeaways
Key players operating in the hydrogen fuel cell vehicle market are Audi AG, Ballard Power Systems Inc., BMW Group, Daimler AG, General Motors Company, Honda Motor Co., Ltd., and Hyundai Motor Group.
The growing demand for clean transportation is a major factor fueling the growth of the hydrogen fuel cell vehicle market. Many countries and automakers are launching initiatives to commercialize fuel cell vehicles to reduce vehicular emissions.
Asian markets have emerged as early adopters with Japan, South Korea, and China taking active measures to establish the necessary hydrogen refueling infrastructure. Manufacturers in these regions are investing heavily in hydrogen fuel cell systems to cater to the growing demand.
Market key trends
One of the major trends in the hydrogen fuel cell vehicle market is the declining cost of fuel cell systems. Continuous technology improvements and increasing mass production are bringing down fuel cell costs. Automakers target to reduce fuel cell costs to levels comparable with internal combustion engines to achieve price parity and mass adoption. This, along with improving durability and performance of fuel cells over the years, is expected to boost the prospects of hydrogen fuel cell vehicles.
Porter’s Analysis
Threat of new entrants: Battery electric vehicles and vehicles with internal combustion engines are major substitutes currently occupying most of the auto market share, making entry difficult for hydrogen fuel cell vehicles.
Bargaining power of buyers: As the costs of manufacturing hydrogen fuel cell vehicles are still quite high, the bargaining power of buyers remains moderate currently with limited options available in the market.
Bargaining power of suppliers: A few major industrial gas companies currently dominate the production and supply of hydrogen, giving them strong influence over pricing and supply for fuel cell vehicles.
Threat of new substitutes: Technology advancements could lead to lower cost batteries or carbon neutral liquid fuels posing a threat, though fuel cells also have improving efficiency and refueling advantages over batteries.
Competitive rivalry: Major automakers are aggressively developing fuel cell models to gain early leadership in this emerging technology, intensifying competition in areas like performance, design and refueling infrastructure.
Geographical regions
Currently, most development of hydrogen fuel cell vehicles is concentrated in Asia, Europe and North America where major automakers are based and pushing the technology. Japan, South Korea, Germany and California region of the US account for the majority of current fuel cell vehicle deployments and supporting hydrogen refueling stations.
The fastest growing region for the hydrogen fuel cell vehicle market is expected to be China over the forecast period. With massive government incentives and targets to develop hydrogen technologies, production and use of fuel cell vehicles is projected to ramp up swiftly in the large Chinese auto market, supported by investments in domestic fueling infrastructure as well.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
