Hydrogen Vehicles Market Is Estimated To Witness Strong Growth Owing To Rising Government Support For Fuel Cell Vehicles

The Hydrogen Vehicle Market is estimated to be valued at US$ 3.58 Mn in 2023 and is expected to exhibit a CAGR of 28.% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:

Hydrogen vehicles or fuel cell electric vehicles (FCEVs) utilize hydrogen as a fuel for electric motors. These vehicles produce no direct emissions, only emitting water vapor. Hydrogen can power vehicles of all types including cars, buses, trucks, trains, motorcycles and more. The advantages of hydrogen vehicles include zero emissions, high fuel efficiency, fast refueling and long driving range. With growing environmental concerns, hydrogen vehicles provide a promising alternative to conventional gasoline vehicles.

Market key trends:

One of the major trends driving the hydrogen vehicle market growth is rising government support worldwide for development and commercialization of fuel cell technology. Governments across regions such as Europe, North America and Asia Pacific are offering incentives and subsidies for purchase of fuel cell vehicles. For instance, in 2020, the Japanese government announced plans to mass produce affordable fuel-cell vehicles by 2025. Similarly, the US Department of Energy aims to enable the massive manufacturing of affordable fuel-cell vehicles for consumers by 2030. Growing government support in forms of funding for hydrogen infrastructure development and purchase subsidies for fuel cell vehicles is expected to boost the adoption of these vehicles during the forecast period.

Porter's Analysis

Threat of new entrants: The established infrastructure and technology required to enter the hydrogen vehicle market poses as a major entry barrier for new players.

Bargaining power of buyers: Buyers have moderate bargaining power due to the availability of substitutes like electric vehicles. However, concerns over emissions are driving demand for fuel cell vehicles.

Bargaining power of suppliers: A few key players control the supply of fuel cell components and hydrogen fuel, giving them strong bargaining power over automakers.

Threat of new substitutes: Electric vehicles continue to emerge as a viable zero-emission alternative, posing a threat to hydrogen vehicles. However, their longer refueling time remains a key limitation.

Competitive rivalry: Automakers are engaged in fierce competition to commercialize advanced fuel cell systems and expand fueling infrastructure.

SWOT Analysis

Strengths: Hydrogen vehicles offer superior driving range and faster refueling compared to battery EVs. Rising environmental awareness is driving global support for fuel cell technologies.

Weaknesses: High manufacturing costs of fuel cells and lack of widespread hydrogen refueling infrastructure remain major challenges restricting market growth.

Opportunities: Growing investments by governments and industry to boost infrastructure development present lucrative opportunities. Partnerships to commercialize fuel cell technologies are also on the rise.

Threats: Slow pace of infrastructure growth and technology advancements continue to limit market expansion. Cost competitiveness against gasoline/diesel and battery EVs also poses a threat.

Key Takeaways

The global Hydrogen Vehicle Market Growth is expected to witness high growth, exhibiting CAGR of 28.% over the forecast period, due to increasing environmental regulations on vehicular emissions. Major automakers are investing heavily in developing affordable fuel cell systems to drive the commercialization of hydrogen vehicles.

Regional analysis Asia Pacific dominates the global market and is expected to continue its dominance during the forecast period. Countries like Japan, South Korea and China are rapidly investing in building hydrogen refueling infrastructure to support FCEV adoption.

Key players operating in the hydrogen vehicle market are Toyota Motor Corporation, Hyundai Motor Company, Honda Motor Co., Ltd., and Ballard Power Systems. Toyota is a leader in this space with its Mirai model. Hyundai too has made progress with the Nexo FCEV vehicle and partnered with companies globally to expand fueling stations.

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