The future of hydrogen in automotive market size is projected to grow from 23 thousand units in 2024 to 353 thousand units by 2035, at a CAGR of 28.3%. Factors such as the extended driving range of FCEVs and the increasing interest among consumers indicate hydrogen’s potential as an alternative for zero-emission mobility. Additionally, the rising involvement of investors, advancements in technology by OEMs, and governmental initiatives toward zero-emission transportation are expected to boost the market growth. This shift towards hydrogen-based mobility is already experiencing global traction, notably in heavy-duty transportation, where FCEVs are progressively gaining favor.
Market Dynamics :
Driver: Reduced oil dependency
According to the US Energy Information Administration (EIA), 100.99 million barrels of crude oil were consumed per day in 2023. The limited petroleum reserves and rising prices of fuel have led automakers to consider alternative fuel sources for their vehicles. Hydrogen can be generated from renewable sources such as water, agricultural waste, and biogas, as well as from natural gas and coal. Currently, 76% of the hydrogen produced is from natural gases, 22% from oil, 18% from coal, and 2% through water electrolysis. However, there have been developments to increase the production of hydrogen from water electrolysis. For instance, in September 2022, Advent Technologies Holdings (US) announced a three-year agreement with the German State of Brandenburg. Under this agreement, Advent will supply methanol-powered fuel cell systems to the German State of Brandenburg. These fuel cell systems will be installed in select critical communication sites in the region. Due to the developments in extracting hydrogen from natural resources other than oil, dependency on oil for hydrogen-related products would be reduced. This can drive the overall demand for hydrogen in automotive.
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Opportunity: Government initiatives promoting hydrogen infrastructure
Governments are progressively directing resources towards alternative energy sources, such as hydrogen, in response to escalating concerns regarding carbon emissions. As per data from the US Environmental Protection Agency (EPA) in 2022, carbon dioxide emissions stemming from energy-related activities exhibited a 0.9% increase, surging to an unprecedented level surpassing 36.8 gigatons. In light of this, governmental bodies are undertaking proactive measures, allocating investments, and advocating for the utilization of hydrogen. Alongside the advancement of hydrogen-based technologies, there arises a critical imperative to establish a robust infrastructure capable of supporting hydrogen-powered transportation networks. As a result, governments are intensifying their investments in the development of requisite hydrogen infrastructure, thereby fostering a conducive environment for the prospective expansion of hydrogen within the automotive sector. Moreover, the proliferation of green hydrogen resources is expected to bolster the adoption of FCEVs in the foreseeable future.
“H2-truck segment is expected to hold the significant market share during the forecast period.”
Hydrogen-powered trucks are expected to play a pivotal role in the automotive industry, demonstrating a CAGR of 36.6% until 2035, propelled by increased efforts in innovation from major OEMs like Volvo (Sweden) and Daimler (Germany). Hydrogen-powered trucks hold a significant portion of the Asia Pacific market, particularly leading in China. Similarly, there is a rapid surge in demand projected for hydrogen-powered trucks in the US, supported by the nation’s ambitious USD 7 billion hydrogen hub initiative aimed at establishing hydrogen refueling stations or hubs nationwide. Leading models such as the Hydzon Hymax and Hyundai XCIENT are driving the H2 truck market forward. Additionally, OEMs including Scania, Volvo, and Daimler are strategizing to introduce their hydrogen-powered trucks soon.
The H2 Bus segment to have rapid growth during the forecast period
The H2 bus segment is projected to demonstrate a notable growth rate, with a CAGR of 21.0% anticipated during the forecast period, resulting in approximately 16 thousand units by the year 2035. China leads the global hydrogen-powered bus segment, demonstrating over 95% of sales worldwide, primarily due to government support aimed at enhancing interstate logistics. Similarly, the UK has announced plans to deploy 4,000 fuel cell buses by the year 2025. Technological advancements by prominent OEMs such as Hyundai Motor Company (South Korea), Wrightbus (Ireland), and others, alongside government support, are expected to boost the future of hydrogen within the automotive market. For instance, notable hydrogen-powered bus models include the Zhongtong LCK series bus, Yutong ZK series bus, Hyundai ElecCity, among others.
North America to be the fastest growing market for H-2 Pickups and HD Trucks during the forecast period.
North America is expected to witness significant growth in the market for fuel-cell electric vehicles, with the United States maintaining a dominant share of 94% within the region. Toyota emerged as the frontrunner in the North American market, commanding an 89% market share as of 2023, with projections suggesting its continued leadership, bolstered by the implementation of hydrogen subsidy initiatives. Although the setup of fixed H2 refueling stations stalled in California in 2023, the US is strategizing the establishment of portable hydrogen refueling stations beyond California. Models such as Toyota MIRAI and Hyundai NEXO dominate sales in the region, with an increasing focus on pickup trucks anticipated, as major OEMs plan to diversify into hydrogen fuel. North America emerges as a key region in fuel cell electric vehicle market with leading OEMs planning new launches in coming years. Further, Hyundai XCIENT, Van Hool A series, Nikola Motors Tre, and NFI Xcelsior are some of leading FC commercial vehicles presently available in the market. Moreover, Toyota Hyluz and Daimler H2 truck are expected to be launched by 2026.
Key Players
The major players in Future of Hydrogen in Automotive market include Toyota Motor Corporation (Japan), Hyundai Motor Company (South Korea), SAIC Motors (China), FAW (China), and Yutong (China) among others. These companies offer hydrogen-powered vehicles and have strong distribution networks across the globe.
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