‘Structural growth’: Global sales of fuel cell vehicles jump 80 per cent in 2021

Battery electric vehicles (EVs) may be set to dominate the auto market in the coming decades, but fuel cell technologies could still have a sizeable role to play in the decarbonisation of transport. That is the conclusion of a new research note from banking giant Credit Suisse, which yesterday detailed how global sales of fuel cell electric vehicles (FCEV) increased by 80 per cent in 2021 with 17,500 units sold. The market was dominated by South Korea, which saw 8,600 units sold last year, accounting for 49 per cent of the global market.

However, there were also substantial sales in the US, where 3,400 units were sold, and Japan and China, which saw 2,500 and 1,600 units sold, respectively. The FCEV market may be dwarfed by the market for battery EVs, but Credit Suisse said it expected demand for fuel cell vehicles to continue to grow through to 2030, driven by interest in fuel cell carbon vehicles, such as heavy goods vehicles and delivery vans. The report said the FCEV market is "likely to enjoy structural growth" delivering a compound annual growth rate of 50 per cent from 2022 to 2030.

As such, the report estimated that sales volumes of FCEVs could increase from 22,000 in 2022 to 567,000 in 2030. The analysts said that the sector's growth has been driven by a number of market factors including falling technology costs, expanding fuelling infrastructure, and favourable regulatory 'tailwinds' and generous cash subsidies. The report estimates that the cost of fuel cells could decrease from US£10 per kg in 2022 to US£4 per kg in 2030.

It adds that fuel cell system costs are also expected to decrease, from US£1,000 per kW in 2022 to US£350 per kW in 2030. On a global scale the research team predicted that Europe could overtake Korea as the largest FCEV market by 2030, followed by China and Japan. They said the growth of the European market was set to be underpinned by Europe's "aggressive" hydrogen refuelling station expansion plan and FCEV subsidies.

Passenger vehicles currently dominate the FCEV market, but battery EVs are widely expected to continue to squeeze hydrogen passenger vehicles out of the market for zero emission cars. However, the report expects there could be greater growth potential for FCEVs within the commercial vehicle market. "Electric vehicles face great challenges in decarbonising the commercial vehicles, as batteries are too heavy to meet the requirements of both long distance and heavy loading," the report argues. "Thus, hydrogen-powered FCEV could be a mid- to long-term solution for commercial vehicles in certain scenarios like cold winter regions, and long-distance and heavy-loading transportation owing to its much higher energy density - 1.5 times higher than petrol and diesel, and around 200 times higher than lithium batteries."

The development of FCEV technologies focussed on commercial truck makers is increasing, which the analysts said has been seen in the form of partnerships between various car equipment manufacturers. As such, the report forecasts global FCEV sales volume penetration in the commercial vehicles market could increase from 0.1 per cent in 2022 to 9.1 per cent in 2030 and 50 per cent in 2040. According to the analysts one of the primary considerations for commercial fleet owners is the total cost of ownership on a "payload carried kilometre" basis, of which more than half, or around 55 per cent, currently comes from fuel costs for FCEVs.

However, the report expects that these fuel costs will reduce as green hydrogen production comes online and refuelling infrastructure develops. As such, fuel cell heavy-duty trucks (HDT) could reach cost parity with diesel engine HDTs by 2029 off the back of a falling hydrogen fuel price, the analysts predicted. They added that they therefore expect the total cost of ownership of a 40t fuel cell HDT to reduce from US£247 per 100km in 2022 to US£91 per100km in 2029, combined with the falling cost of fuel cell systems.

However, the market for zero emission haulage technologies remains highly competitive, with some developers betting on hydrogen fuel cells and others predicting that fast-improving battery performance and fall costs could allow for battery electric HGVs and buses that boast sufficiently long ranges.