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Hydrogen FCEV Targets v. Actual Sales: Mind the Gap

Last month’s report focusing on national hydrogen strategies touched on targets some countries have set for transport. But how do those targets square with actual sales in the market? Just how many passenger car and heavy-duty fuel cell electric vehicles (FCEVs) are out there on the market and where are they? What is happening with hydrogen fueling stations? This post, in the continuing series on hydrogen, tackles those questions.

FCEV stocks had been growing by about 70% annually from 2017 to 2020 but declined 15% in 2021 with the impact of pandemic. By the end of June 2021, the last time data were announced, there were more than 40,000 FCEVs on the road, according to the International Energy Agency (IEA). South Korea, the U.S., China and Japan are the primary markets responsible for a sixfold increase in FCEV sales in four years. Yes, the FCEV fleet has grown, but as Table 1 shows are exceptionally modest compared to the national hydrogen strategy targets (and considering overall vehicle sales). Table 1 provides a comparison of sales between 2017-June 2021 versus targets in national hydrogen strategies. FCEVs includes both light- and heavy-duty applications.

Table 1: Sales v. National Hydrogen Strategy Targets

Not one country with an applicable strategy is even close to meeting its targets, and South Korea will miss its 81,000 FCEV target for this year. There will most likely need to be more concerted policy intervention to grow these markets and ultimately meet these targets. This would include more investment in refueling stations (more on that below), more generous consumer incentives for vehicle purchases, tougher CO2 standards on cars (already happening) and perhaps even incentives for the car industry to manufacture and sell these vehicles (especially passenger cars, trucks and buses).

For example, Japan is aiming to make FCEVs more price-competitive with comparable hybrid EVs, by funding R&D to help reduce the cost of fuel cells and hydrogen storage systems. In South Korea, purchase subsidies from central and local governments cover about half of the purchase price of the popular, domestically produced Hyundai NEXO. I expect these interventions to continue to happen, especially as production targets are hit and the cost of production comes down.

Model availability is one among many issues impacting FCEV sales. There are only two passenger car FCEVs on the market in the world right now: Toyota Mirai and Hyundai NEXO. Honda announced it would discontinue its Honda Clarity fuel-cell series in August 2021. There are currently 12 fuel-cell bus models and five truck models available on the market, according to IEA. By unit count, most of them are in China, which accounts for 94% of global fuel-cell buses and 99% of fuel-cell trucks. Table 2 highlights light- (LDV) and heavy-duty (HDV) FCEV models that are planned in the coming years.

Table 2: Future Light- and Heavy-Duty FCEV Models

What about hydrogen refueling stations (HRS)? There were a total of 540 hydrogen refueling stations, both public and nonpublic, installed around the world by the end of 2020, an increase of 15% year over- year, according to the IEA Advanced Fuel Cells Technology Collaboration Programme (AFC TCP). The deployment was slower compared to 2019, but on the same level as seen in 2018. At the end of 2020, Asia had the highest number of stations, with a total of 278, followed by Europe with 190 and North America with 68.  Table 3 breaks down national hydrogen strategy targets for HRS’ and total HRS in place by the end of 2020.

Table 3: National Hydrogen Strategy HRS Targets v. Actual HRS in Place

Where’s the Sweet Spot for Hydrogen FCEVs?

Increasingly, there seems to be some coalescence around battery electric vehicles (BEVs) as a preferred mode for decarbonizing the light-duty and light commercial vans (LCV) fleets, and hydrogen FCEVs for the HDV fleet. Note this comment from Goldman Sachs:

As we look into heavy-road long-haul transport, we find the hydrogen proposition competitive, with a [total cost of ownership (TCO)] that is similar to that of BEV but benefiting from lower weight and faster refueling times. While both options remain more costly than conventional diesel ICE trucks, we expect technological innovation and cost deflation that generally comes on the back of economies of scale to reduce the costs of both technologies over time.[1]

Figure 1 provides a view on TCO for HDV FCEVs.

Figure 1: TCO Comparison for BEV, FCEV and ICEV HDV for Class 8 Truck (15 Years Useful Life Assumed)

What about the fuel cost? In the Goldman Sachs study, the authors found that US$4-4.5/kgH2 would be sufficient for cost parity with diesel (normalized diesel prices), while at current FCEV costs a hydrogen price of US$3-3.5/kg H2 would be needed for cost parity, well below the $8-12/kgH2 at the pump currently. This is shown in Figure 2.

Figure 2: Hydrogen Price at the Pump to Achieve Parity with Diesel


[1] Goldman Sachs, Carbonomics: The Clean Hydrogen Revolution, February 2022 at https://www.goldmansachs.com/insights/pages/gs-research/carbonomics-the-clean-hydrogen-revolution/carbonomics-the-clean-hydrogen-revolution.pdf (hereinafter “Carbonomics”).

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