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Large growth in hydrogen fuel cell electric vehicles (FCEVs) driven by environment friendly transportation and military applications

A fuel cell is a device that generates electricity by a chemical reaction. It converts hydrogen and oxygen into water, and in the process also creates electricity. When hydrogen gas is converted into electricity, water and heat are released. Although batteries and fuel cells are both considered electrochemical cells and consist of similar structures, fuel cells require a continuous source of oxygen and fuel to run, similar to how an internal combustion engine needs a constant flow of gasoline or diesel. A fuel cell is a device that converts chemical potential energy (energy stored in molecular bonds) into electrical energy. The products of the reaction in the cell are water, electricity, and heat. This is a big improvement over internal combustion engines, coal burning power plants, and nuclear power plants, all of which produce harmful by-products.

 

Every fuel cell has two electrodes called, respectively, the anode and cathode. The reactions that produce electricity take place at the electrodes. Every fuel cell also has an electrolyte, which carries electrically charged particles from one electrode to the other, and a catalyst, which speeds the reactions at the electrodes. There are many types of fuel cells, and each can operate in a clean manner using different fuels including hydrogen, natural gas, methanol, ethanol, biogas.

 

Fuel cells provide many advantages, high energy efficiency ( can be close to 80% where they generate both heat and electricity), they are environment friendly as they don’t produce pollutants or greenhouse gasses, significantly improving our environment,  scalable providing power from milliwatts to megawatts, and complementary i.e. readily be combined with other energy technologies, such as batteries, wind turbines, solar panels, and super-capacitors.

 

Hydrogen fuel cells can be used in a broad range of applications such as cars, buildings, electronic devices, trucks, and backup power systems. As these cells can be grid-independent, they are an attractive option for critical load functions such as telecommunication towers, data centers, emergency response systems, hospitals, and even military applications for national defense.

 

Fuel cells are also important for military systems as they  can extend the operating range and mission of by reducing the dependence on carbon-based fuel sources. They also save energy and reduce the operating costs associated with dependence on foreign oil. “As the U.S. moves to reduce its dependence on foreign oil and become more energy efficient, this technology may well define the future of power and energy for the war fighter,” writes ONR.

 

In hydrogen fuel cell electric vehicles (FCEVs) Electricity is generated from an onboard supply of hydrogen that  powers the electric motor. An FCEV stores the hydrogen in high-pressure tanks (the Toyota’s Mirai, for example, has three). Non-toxic, compressed hydrogen gas flows into the tank when refueling.

 

In just the last two years, Toyota, Hyundai and Honda have released vehicles that run on fuel cells, and carmakers such as GM, BMW and VW are working on prototypes. Market for FECVs    includes Toyota’s Mirai, Hyundai’s Nexo and Honda Motor’s Clarity Fuel Cell, these “plug-less” EVs are the alternative to their battery electric cousins. Drivers can refuel FCEVs at a traditional gasoline station in less than 5 minutes. The 2021 Mirai gets an EPA estimated 402 miles of range on the XLE trim with the Nexo close behind at 380 miles. Neither cold weather nor heated seats deplete the range, another added bonus. An FCEV stores the hydrogen in high-pressure tanks (the Mirai, for example, has three). Non-toxic, compressed hydrogen gas flows into the tank when refueling.

 

However, compared to electric vehicles, “hydrogen hasn’t really taken off,” said Timotej Gavrilovic, a contributing analyst at Wood Mackenzie Power & Renewables. “The number of hydrogen-based vehicles has been pretty small.” And with battery-powered electric vehicles still only slated to have a penetration of around 10 percent by 2030, the chances of a major boom in fuel-cell cars by the same time is small.

 

“If there were stations everywhere, hydrogen would be an obvious solution,” J.R. DeShazo, director of the Luskin Center for Innovation at UCLA, told ABC News. “Refueling stations are really expensive and require significant economies of scale to be cost effective and compete with gasoline and electricity.” “Despite more than half a century of development, starting in 1966 with GM’s Electrovan, hydrogen fuel-cell cars remain low in volume, expensive to produce, and restricted to sales in the few countries or regions that have built hydrogen fueling stations,” John Voelcker, the former editor of Green Car Reports wrote. “I am not a believer of FCEVs. It costs tens of billions of dollars to set up a hydrogen fueling network that has industrial strength compression equipment” to fuel these vehicles, he said.

 

Both Voelcker and DeShazo pointed out that the production of hydrogen — if not made from renewable energy such as natural gas or solar — causes greenhouse emissions. “If the goal is reducing climate change gas per mile driven, electricity is simply better at doing that,” Voelcker said. “More CO2 is associated with hydrogen cars.”

 

The massive potential of fuel cells has encouraged several research studies, designed to develop and investigate novel materials, elements, and compounds that can accelerate the advancement of fuel cell technology. In November 2020, for instance, a team of researchers from the University of California, Los Angeles, California Institute of Technology, and Ford Motor Company accomplished a major breakthrough in hydrogen-based automotive fuel cell technology. The team successfully used solar energy to convert water into hydrogen during the day and reverse the process at night.

 

In January 2021, researchers at the Pohang University in South Korea discovered a way to efficiently produce hydrogen fuel through the water-electrolysis process using nickel as an electro-catalyst. These research undertakings are set to rapidly augment the fuel cell technology and accelerate the growth of this market.

 

Market Growth

Global fuel cell market is poised to grow by 1704.79 MW during 2019-2023, progressing at a CAGR of almost 26% during the forecast period. Rise in vehicle production by automakers has favorably influenced the industry and acquired focus of international bodies on fuel cell electric vehicles. The global automotive fuel cell market size is projected to reach USD 34.63 billion by 2028 from the value of the market stood at USD 1.07 billion in 2020, exhibiting a CAGR of 53.5% .

 

Registering a prolific CAGR of 44.06% in 2020 and reaching a value of USD 1.73 billion in 2021, the automotive fuel cell market growth is set to make substantial gains from the COVID-19 pandemic, according to Fortune Business Insights™.

 

Market Drivers

Rising adoption of electric and hybrid vehicles, increasing demand in the telecommunications, automotive and residential micro-CHP sector, and diminishing dependence on non-renewable energy sources are some of the factors fueling the market growth. However, the high cost of switching to this technology and reduced hydrogen re-filling stations are restraining the market growth. Moreover, expanding take-up of novel techniques for the decrease in fuel costs among the fuel makers is providing opportunities for market growth.

 

The fuel cell market is driven by driven by environment friendly and better alternative than existing options. If hydrogen is used as a fuel then the only by-product obtained are heat, water, and electricity.  Power potential of fuel cells include systems as small as laptop to as big as utility power stations. Fuel cells are preferred over traditional sources of energy due to low carbon emissions and less noise. Normal fuel cell items produce less sound while functioning as compared to traditional sources of energy. Further, stationary fuel cell systems require less space as compared to other sources of clean energy and this have driven the growth of stationary fuel cell market globally. Growing demand for portable power source is predicted to drive industry demand during forecast timeline.

 

One prominent reason for this is the proven correlation between COVID-19 and prolonged exposure to PM2.5. For example, a statistical analysis by Harvard University conducted in November 2020 found that higher PM2.5 exposures are positively correlated with higher coronavirus mortality rates. These and such findings will push the demand for clean mobility solutions even after the pandemic is over, wherein automotive fuel cell technology will play a critical role. Furthermore, hydrogen fuel cells have also been utilized by the healthcare industry to fight the contagion. In May 2020, for instance, the South Africa Department of Science and Innovation deployed seven hydrogen fuel cell units in a military hospital in the country. This market is, therefore, slated to chart an enduring growth trajectory in the near future as the need for sustainable mobility solutions heightens worldwide.

 

According to Stratistics MRC, the Global Hydrogen Fuel Cells Market is accounted for $476.78 million in 2017 and is expected to reach $55,061.4 million by 2026 growing at a CAGR of 69.5% during the forecast period.

 

Growing adoption of the hydrogen fuel cell refueling stations all over the world is increasing the practicability of the hydrogen fuel cell for alternative automotive propulsion. Germany houses the highest amount of hydrogen fuel stations. High-growing companies like FuelCell Energy, Inc., Bloom Energy, Ballard Power Systems Inc., and Plug Power, among others invest handful amount in the designing, manufacturing, undertaking fuelcell projects, installing, operating and managing high-scale fuel cell systems, servicing, and manual power control to create a strong strategic business model that would increase the applicability of the futuristic hydrogen fuel cell and capable of replacing the conventional source of energies.

 

Government support to create hydrogen power stations is predicted to drive the demand for fuel cell technology. These incentives are in the form of tax credits and subsidies. This makes the adoption of fuel cells cost-effective and highly convenient. Thus, the growing number of incentives to boost the adoption of fuel cell vehicles are expected to drive market growth during the forecast period.  Further, strict rules promoting zero emission automobiles along with growing public transport is projected to favorably affect global industry growth during forecast timeline. In addition, the development of zero-energy buildings is anticipated to further boost the growth of the fuel cell market.

 

Market Segments

Based on vehicles, the market has been categorized into passenger vehicles, buses, light commercial vehicles, and trucks. The passenger vehicles segment led the market with a share of 60.0% in 2020.

By type, the market has been segregated into proton exchange membrane fuel cell (PEMFC), phosphoric acid fuel cell (PAFC), and others.

On the basis of power rating, the market has been segmented into below 100 kW, 100-200 kW, and above 200 kW.

In terms of geography, the market has been clubbed into North America, Europe, Asia Pacific, and the Rest of the World.

 

Application Insights

The industry is segmented into various applications like stationary application, portable application and transportation application.

 

Stationary power includes any application in which the fuel cells are operated at a fixed location for primary power, backup power, or combined heat and power (CHP). Stationary application contributed $2 billion for 2015 and it dominates the application segment due to its environment friendly features and efficacy. It is mainly used as backup power station in hotel, residence, school, commercial building and hospital.

 

Transportation applications include motive power for passenger cars, buses and other fuel cell electric vehicles (FCEVs), specialty vehicles, material handling equipment (MHE), and auxiliary power units for offroad vehicles. Transportation application segment is predicted to contribute $1.31 billion in terms of revenue by end of 2024 registering a CAGR of more than 22.11% during forecast period. Increase in research & development activities by firms along with growing government support to integrate effective technology in automobiles like truck, car and bus are predicted to promote global fuel cell market outlook in this segment.

 

Portable power applications include fuel cells that are not permanently installed or fuel cells in a portable device. Portable application segment is predicted to register more than 7.1% of CAGR during forecast timeline. Growing demand for portable charger as power source for consumer electronic items like camera, laptop, cell phone, smart phone and iphone are predicted to promote portable fuel cell market trends.

 

 

Product Insights

By technologies the market is classified into (Low Temperature Fuel Cells (LTFC) proton exchange membrane fuel cell (PEMFC), direct methanol fuel cell (DMFC),  High Temperature Fuel Cells (HTFC) (Phosphoric acid fuel cell (PAFC), Molten carbonate fuel cell (MCFC), Solid oxide fuel cell (SOFC)), alkaline fuel cells (AFCs), molten carbonate fuel cells (MCFCs), and phosphoric acid fuel cells (PAFCs).

 

Low-temperature fuel cells (LTFC) constituted over 40% of the global fuel cell market with proton-exchange membrane fuel cell (PEMFC) and direct methanol fuel cell (DMFC) sub-categories collectively accounting the largest revenue share in the year 2018. Key factors driving the demand of these fuel cell types include quick start up, lower operating temperature, and lower corrosion and electrolyte management problems.  Direct methanol fuel cell segment  find their use in portable power source where energy density and power are more vital than efficacy. However, expensive range of catalysts and its sensitivity to fuel impurities is considered as a market growth hindrance.

 

Solid oxide fuel cell (SOFC) is likely to emerge as a faster growing segment and is anticipated to grow at an estimated CAGR of 40.8% in the forecast period. Solid oxide fuel cell (SOFC) segment has High level of efficacy, low carbon emissions, elasticity, stability and comparative less price which is predicted to boost the demand for this fuel cell type. All the components in SOFC are solid and hence the need for electrolyte loss is negated. Their ability to operate at high temperatures minimizes the need for costly catalysts such as ruthenium.

 

Proton exchange membrane fuel cell  is extensively used in stationary and transportation applications. In addition to this, it also provides high electric efficacy and substantial power to area proportion & is easily accessible across various watts making it a preferable choice in transportation application.

 

Key factors driving the demand of High-temperature fuel cells (HTFC) category is its suitability for combined heat and power (CHP) and increased tolerance to fuel impurities. Nonetheless, their sensitivity to sulphur, long start-up time, and expensive catalyst is restricting its application in distributed generation systems.

 

Molten carbonate fuel cell (MCFC)  emerged as the largest product segment, registered a demand of 226 MW in 2018 and is anticipated to reach 873 MW by 2025. Since MCFC are widely used in large stationary power plants, they are expected to witness a steady growth in the forecast period.

 

The Advanced Propulsion Centre (APC) has allocated more than £54m in government and industry funding to accelerate the development of net-zero transport solutions.

In Northern Ireland, £11.2m has been allocated to the development and manufacture of low-cost hydrogen fuel cell bus technology and to a new hydrogen centre in Ballymena. £31.9m has been allocated to Meritor, the global supplier for commercial vehicle manufacturers in order to develop lightweight electric powertrains for heavy goods vehicles. The final £11.3m has been committed through Shield Manufacturing Technologies and will be used to develop an energy recovery system to reduce the energy use of cars and vans.

 

Ian Constance, chief executive at the APC said: ‘We are delighted to have guided the latest investment of more than £54m in the development and production of innovative powertrains to further accelerate the transition of the automotive sector to a net-zero future. The funding will enable the UK to apply its world-class innovation and experience in the electrification of vehicles across the supply chain in Great Britain and Northern Ireland.

 

‘From fuel cell technology for buses, designed and built-in Ballymena, a lightweight electric powertrain for commercial vehicles developed and manufactured in Wales and an integrated motor and energy recovery systems system for cars and vans based on motorsport technology in Warwickshire, today’s announcement secures and creates nearly 10,000 jobs and will cut CO2 emissions equivalent to removing the lifetime emissions of nearly 1.8 million cars.’

 

Business Secretary, Kwasi Kwarteng added: ‘The UK is leading the world by developing cutting edge technology that will help to tackle climate change and lead to a green, prosperous future for our automotive sector. ‘These projects will not only help accelerate the wider application of greener technology in lorries and buses, but will also help generate the high-skilled jobs to level up regions across the UK while ensuring we build back greener.’

Regional Insights

Global industry is segmented into key geographical regions like North America, , Europe, APAC, MEA and Latin America.

 

Asia Pacific holds a greater share in the global market in terms of volume. In 2020, the region’s market size was USD 0.66 billion. Japan is the major market in the Asia-Pacific region that deals in fuel cells followed by South Korea. Due to the large demand of Combined Heat and Power systems in Japan and other countries in this region, the market for fuel cells is slated to register a robust growth rate.

 

Asia Pacific is expected to dominate the automotive fuel cell market share  owing to the rising investments towards building hydrogen refueling infrastructure, especially in China. Besides this factor, long-term targets of governments in the region to deploy fuel cell electric vehicles (FCEVs) will further propel the market. APAC fuel call market share is predicted to grow up to $14.1 billion by end of 2024 registering CAGR of more than 24.1% during forecast timeframe.

 

Increasing public-private partnerships results into a faster adoption of hydrogen based applications. For instance, Bloom Energy signed MoU with GAIL (India) Limited to deploy fuel cell technology in India using Natural gas. Doosan Fuel Cell signed a deal with Samsung C&T Group and Korea Hydro & Nuclear Power to manufacture and deliver 70 fuel cells for a residential complex in Busan. Regional industry demand is mainly promoted by constant monetary support from DOE (Department of Energy). Further, favorable government policy promoting renewable power to regulate carbon emissions is the key factor stimulating industry growth in the region.

 

North America was the second-largest market for fuel cell market in 2018 due to commercialization and effective adoption of fuel cells for electric vehicles. European market will shift focus on public-private partnership to accomplish the target of turning a low carbon economy and maintain a higher competitive edge. 

 

European industry is predicted to register moderate CAGR of more than 3.51%. Commercialization of fuel cell electric vehicles along with huge consumer base in region is predicted to promote industry growth during forecast timeline. Strict government norms along with increasing use of hydrogen as fuel in vehicles can positively contribute towards regional industry expansion. In Europe, the market is poised to undergo phenomenal expansion on account of the stringent emission norms set by the European Union (EU). Moreover, the favorable policies of the EU supporting research in hydrogen and automotive fuel cell technology will also contribute to the regional market growth.

 

Drifting highlight towards hydrogen as transportation fuel in countries like Norway and Denmark can supplement the growth of the industry in Europe. Ongoing projects in the European market is anticipated to enable market participants to extend their product portfolio. Deploying cleaner technologies under a higher cost, challenges the innovative streak of most of the market participants.

 

Key Players

Key industry players  include Wystrach (Germany), UQM Technologies (U.S.), Solaris Bus & Coach S.A (Poland), Pragma Industries (France), Hydrospider (Switzerland), Horizon Fuel Cell Technologies (Singapore), H2V Industry (France), Grove Hydrogen Automotive (China), FABER INDUSTRIE SPA (Italy), Danish Power Systems (Denmark), Blue World Technologies (Denmark), Foresight Energy Co., Ltd. (China), Bing Energy (U.S.), Hauzer Techno Coating B.V. (Netherlands), Wuhan Tiger FCV (China), Symbio (France),
Proton Motor Fuel Cell GmbH (Germany). Intelligent Energy (England), Faurecia (France), Continental Industries (Germany), AVL (Austria), Nuvera Fuel Cells, LLC (U.S.), Delphi Technologies (UK), Toshiba (Japan), American Honda Motor Company, Inc. (Japan),
Nedstack Fuel Cell Technology (Netherlands), Toyota Motor Company (Japan), Ballard Power Systems (Canada), Wind2Gas Energy GmbH & Co KG (Germany), Umicore (Belgium), Shanghai Re-Fire Technology Co., Ltd. (China), Hystorsys (Norway), Hydrogenious (Germany), Hexagon Composites ASA (Norway), H2 Energy (Switzerland), FREUDENBERG (Germany), e.Go Mobile AG (Germany), Bosal (Belgium)
Air Liquide (France), W. L. Gore & Associates (U.S.), Hauzer Techno Coating B.V. (Netherlands), Wuhan Tiger FCV (China), Symbio (France), PowerCell Sweden AB (Sweden), FEV Group GmbH (Germany), ElringKlinger (Germany), Bosch (Germany), Ceres Power (UK)
ITM Power (UK), Hydrogenics (Canada), Daimler AG (Germany), Plug Power (U.S.), Nissan Motor Corporation (Japan), and Hyundai Motor Company (South Korea)

 

The focus on advancing automotive fuel cell technologies is prompting leading companies to adopt and execute different strategies to broaden their business horizons. One such strategy is the diversification of portfolios, powered by the development and introduction of path-breaking fuel cell products. This strategy is also enabling players to establish a footprint and capture regional markets. Key industry players are using key business strategies like mergers & acquisitions to reduce competition and increase their geographical presence.

 

 

References and Resources also include:

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