Hydrogen-powered vehicles, despite being wildly hyped by China’s government, are at an early stage and may not be widely available decades. And hydrogen-powered passenger vehicles may never go mainstream.
The vehicles still need many years of work, compared with the rapid uptake of electric vehicles recently, BloombergNEF analyst Nikolas Soulopoulos told Karma in an interview.
China, which plans more than 1 million fuel-cell vehicles on the road by 2030, is about to invest more than $17 billion into the development of hydrogen vehicles, according to BloombergNEF. Both heavyweight players and startups are competing in the new market: China National Heavy Duty Truck Group is about to spend $7.6 billion for manufacturing fuel-cell vehicles in Shandong Province, while Mingtian Hydrogen, which has been backed by China’s Academy of Sciences is planning a $363 million industrial park in Anhui Province.
There are about 10,000 hydrogen vehicles on the road, far fewer than the 5 million EV, according to BNEF. It’s estimated that by 2040 hydrogen vehicles might have a slight uptick in commercial vehicles, while EV will make up more than 57% of car sales.
- The lack of hydrogen-charging stations and the high cost of hydrogen are two main reasons hindering growth. In addition, the cost of producing hydrogen can vary widely depending on location and production method.
- Commercial vehicles are more likely to adopt hydrogen use than passenger vehicles. Buses and trucks, costing more than passenger cars, more readily absorb the expense of hydrogen technology.
- Hydrogen-vehicle development is concentrated in Asia: except for China and a few carmakers including Hyundai, the global carmakers aren’t busy in the market.
- Karma Takeaway: While China may lead the trend of commercial fuel-cell vehicles with government-backed programs, the market is in its infancy, and expected to grow slowly.