The global automotive fuel cell market size was valued at USD 1.9 billion in 2021 and is expanding around USD 39.6 billion by 2030 with a registered CAGR of 54% from 2022 to 2030.

The global automotive fuel cell market is growing at a compound annual growth rate (CAGR) of 54% over the forecast period due to innovations in the development of medium and heavy-duty vehicles and increasing focus on improving hydrogen infrastructures to augment industry pace.

Factors such as growing demand for low emission commuting and governments supporting long range, zero emission vehicles through subsidies & tax rebates have compelled the manufacturers to provide fuel cell vehicles around the world. This has led to a growing demand for automotive fuel cells in the market.

Increasing investments by governments across the globe to develop hydrogen fuel infrastructure and incentives offered to buyers will create opportunities for OEMs to expand their revenue stream and geographical presence. The market in Asia Pacific is projected to experience steady growth owing to the high demand for cost efficient and low-emission vehicles, while the North American market is the fastest growing market due to the government initiatives and growing high-performance Commercial vehicle segment. However, the low presence of hydrogen fueling stations, higher costs involved in initial investments, and performance constraints could hamper the growth of the global automotive fuel cell market.

The global automotive fuel cell market size was valued at USD 1.9 billion in 2021 and is expanding around USD 39.6 billion by 2030 with a registered CAGR of 54% from 2022 to 2030.

Increasing Research into Fuel Cell Technology to Boost the Market

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.

High Initial Investments in Hydrogen Fueling Infrastructure to Hamper Market

The setup cost of hydrogen fuel station and other infrastructure are quite high, as compared to that of petroleum, diesel, and other fuels. This has hampered the installation of hydrogen fueling infrastructure around the world. This is due to the expensive equipment required for this fuel along with necessary precautions and safety measures, as hydrogen is an easily combustible fuel. This, in turn, increases the cost of vehicles and subsequently, hampers the automotive fuel cell vehicle across the globe.

Rising Demand for Fuel Cell Vehicles in Automotive and Transportation to Offer Attractive Opportunities

Fuel cell electric vehicles offer high driving range, fast refueling, noiseless operation, and zero emissions of greenhouse gases and air pollutants. Hence, the use of fuel cells is ideal for transportation and automotive applications. Fuel cells are versatile and easily scalable sources of electricity that can be used for large applications in transportation such as material handling vehicles, buses, trains, cars, defense vehicles, and LCVs. Fuel cells are also employed as stationary fuel sources in commercial applications. Fuel cells can be utilized as primary power, backup power, and to generate heat and power in combined heat and power systems. Moreover, governments are taking initiatives to promote usage of fuel cells for transportation, which can further boost the automotive and transportation segment of the fuel cell vehicle market across the globe.

COVID-19 to Prove Beneficial for the Market

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™. 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.

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Market Segmentation:

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.

Asia Pacific is expected to dominate the automotive fuel cell market share during the forecast period owing to the rising investments towards building hydrogen refuelling 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. In 2020, the region's market size was USD 0.66 billion.

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.

Government Initiatives for Clean Energy is Driving the Market

Government initiatives throughout the world to choose green energy mobility in order to restrict and reduce transportation pollution is a crucial driver that is expected to boost the fuel cell commercial vehicle market in the near future. Several governments are already laying out plans throughout the world to encourage FCEVs on the road will also help the automotive fuel cell industry grow.

In February 2022, Japan's Ministry of the Environment announced that it would support local governments and companies in the establishment of a hydrogen business consortium. The ministry has been jointly implementing a hydrogen supply chain platform that generates low-carbon hydrogen and utilizes it in the region with certain companies and local governments. It aims to realize the hydrogen supply chain platform after conducting demonstrations across Japan by around 2030.

In February 2022, the Indian Ministry of New and Renewable Energy announced that it implemented the "Renewable Energy Research and Technology Development" program to support research in various aspects of renewable energy, including inter-alia hydrogen-based transportation and fuel cell development. The ministry listed some of its major development. IISc has established a production plant for high purity hydrogen generation through biomass gasification. ARCI Centre for Fuel Cell Technologies is setting up an integrated automated manufacturing line for producing 20 kW PEM Fuel Cell stacks.

In January 2022, the German government announced support for the CryoTRUCK project for hydrogen trucks. The testing specialist IABG and the Technical University of Munich are jointly developing a CRYOGAS hydrogen gas tank with a refueling system for hydrogen trucks in long-distance transport. The three-and-a-half-year CryoTRUCK project, which has a total budget of more than EUR 25 million, will develop and validate a first-generation technology for cryogenic compressed hydrogen gas (CRYOGAS) storage and refueling system in heavy-duty fuel cell trucks.

Various companies based out of Europe are active in the automotive fuel cell system market.

In March 2021, Robert Bosch GmbH announced that it was planning to develop automotive fuel cell (FC) system components and commercialize them by 2022. In addition to FC stacks, which are under development, the company stated that it would be developing integrated systems that combine the key components of fuel cell vehicles (FCV), including hydrogen gas injectors and air valves.

Moreover, in March 2021, Daimler Truck AG and the Volvo Group founded a fuel-cell joint venture. The Volvo Group acquired 50% shares in the existing Daimler Truck Fuel Cell GmbH & Co. KG at a value of around EUR 0.6 billion. The new joint venture, Cellcentric GmbH & Co. KG, is expected to be the world's leading manufacturer of fuel cells.

In March 2021, Solaris delivered the first of a total of 15 hydrogen buses ordered in 2020 by public transport operator Regionalverkehr Köln GmbH (RVK) in Germany. The purchase of hydrogen-powered Solaris buses is under the JIVE 2 project, with the support of the Federal Ministry of Transport and Digital Infrastructure (BMVI) and the NIP2 program (National Innovation Program for Hydrogen and Fuel Cell Technology). The Solaris Urbino 12 hydrogen vehicles use a set of 70 kW fuel cells, by which the bus can cover up to 350 km on a single refill.

Industry Development:

July 2020: Hyzon Motors announced the setting up of Hyzon Motors Europe B.V., its new headquarters in Europe located in Groningen, the Netherlands. The center in the Netherlands will empower Hyzon to release hydrogen-powered zero-emission commercial vehicles in Europe and reduce carbon footprint worldwide.

In February 2021, Ballard Power Systems signed a non-binding memorandum of understanding (MOU) with Chart Industries Inc. for the joint development of integrated system solutions, which include a fuel cell engine with onboard liquid hydrogen ("LH2") storage and vaporization for the transportation industry mainly for heavy-duty applications, including buses, trucks, rail, and marine vessels.

In February 2021, ACCIONA SA and Plug Power Inc. signed a memorandum of understanding (MOU) to launch a 50-50 joint-venture (JV) headquartered in Madrid. This JV will be a leading green hydrogen platform serving clients in Spain and Portugal, which will provide cost-efficient green hydrogen to multiple end markets.

Market Segmentation

Based on Components:

Fuel Cell Stack

Fuel Processor

Power Conditioner

Air Compressor

Humidifier

Based on Vehicle Type:

Passenger Car

LCV

Bus

Truck

Based on Power Capacity:

<150 kW

150-250 kW

>250 kW

Based on Operating Miles:

0-250 Miles

251-500 Miles

Above 500 Miles

Based on Specialised Vehicle Type:

Material Handling Vehicles

Refrigerated Truck

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