Hydrogen Vehicle Market Trends

Growth Drivers

• Increasing Concern About Rising Vehicular Emission - the growing emission of various harmful gases such as greenhouse gases (GHG) mainly carbon dioxide (CO2), nitrous oxide (N2O), and methane from the transport sector as well as the rising concern about the global climate change is estimated to boost the growth of the market over the projected period. It was found that greenhouse gas emissions from the transportation sector almost equaled nearly 27% of total U.S. greenhouse gas emissions, and were the largest contributor to U.S. GHG emissions.
• Increasing Investment in Clean and Renewable Sources of Energy - the growing investment in clean energy fuel as well as increasing infrastructural development such as the erection of charging stations for electric vehicles and hydrogen vehicles is anticipated to propel the market growth. For instance, it was found that the investment made by the United States in clean energy amounted to approximately USD 55 Billion in 2019. Moreover, the increasing investment in the development of green hydrogen projects for transport applications as hydrogen is abundant and can be made from renewable energy, is further expected to boost the market growth.
• Incentivizing Policies for Electric Vehicles (EVs) and Hydrogen Cars to Reduce Air Pollution - Hydrogen as a fuel has the potential to reduce air pollutant emissions arising from the transport sector. Hence, governments worldwide are providing incentives, loans, tax exemptions, and other subsidies for the speedy penetration of these clean fuel vehicles. For instance, The EV policies of India for EV purchases include financial incentives, exemption from road taxes and car registration fees, and low loan interest rates. All these factors are estimated to augment the market growth.
• Increasing Demand for Hydrogen Fuel Cell Passenger Vehicles - it was observed that passenger cars were the most numerous road vehicle type that utilized hydrogen fuel cell technology. The sale of more than 56, 000 hydrogen fuel cell passenger vehicles took place around the world in 2022.

Challenges

• High Fuel Cost – compared to gasoline, the cost of hydrogen fuel cell vehicles (FCV) is high which is a major challenge restraining market growth. Hydrogen’s unique physical properties are the primary reason leading to the cost hike of fuel. Hydrogen fuel cost can only be lowered with its higher volume sales or greater economies of scale. FCV fuel cost is higher by 3 times per mile than a gasoline hybrid and higher than 2 times that of a conventional gasoline vehicle, making it tougher for hydrogen vehicles to be competitive with hybrid gasoline vehicles. Thus, these factors are hampering the market growth.
• Lack of Infrastructure
• Reluctance in Customers Regarding its Adoption