Automotive Fuel Cell System Market Assessment, By Electrolyte Type [Proton Exchange Membrane Fuel Cell, Direct Methanol Fuel Cell, Alkaline Fuel Cell, Phosphoric Acid Fuel Cell, Others], By Application [Buses, Passenger Vehicles, Commercial Vehicles, Othe

Automotive Fuel Cell System Market Assessment, By Electrolyte Type [Proton Exchange Membrane Fuel Cell, Direct Methanol Fuel Cell, Alkaline Fuel Cell, Phosphoric Acid Fuel Cell, Others], By Application [Buses, Passenger Vehicles, Commercial Vehicles, Others], By Component [Air Compressors, Fuel Processors, Fuel Stacks, Humidifiers, Power Conditioners, Others], By Power Output [<150 kW, 150-250 kW, >250 kW], By Operating Miles [0-250 Miles, 251-500 Miles, Above 500 Miles], By Fuel Type [Hydrogen, Methanol, Others], Region, Opportunities and Forecast, 2017-2031F

Global automotive fuel cell system market is projected to witness a CAGR of 20.7% during the forecast period 2024-2031, growing from USD 5.01 billion in 2023 to USD 22.57 billion in 2031. The adoption of fuel cell system technology has been largely adopted under the transition phase between internal combustion engines and electric propulsion. The efficient technology is in its incubation phase and is expected to become mainstream during the forecast period. Furthermore, the advent of new fuel options including methanol and ethanol has widened the sources for the system. Globally, governments are focusing on limiting vehicular emissions through the adoption of new propulsion systems such as BEV, HEV, and FCEV (Fuel Cell Electric Vehicle). The automakers partner with fuel-cell system developers and technological vendors to build efficient and powerful fuel-cell electric vehicles.

The increased hydrogen production enabled by energy exploration programs is expected to impact the market positively. The increased focus on vehicle safety and growing awareness of alternative fuel is projected to shape market prospects. The adoption of fuel cell systems in commercial and public transportation is likely to boost market growth. Companies are now focused on building high-performance systems that deliver enhanced range.

For instance, in September 2023, WAE Technology launched ultra-high performance-based hydrogen fuel cell electric architecture. EVRh is a high-performance hydrogen fuel cell electric vehicle (EV) platform designed to demonstrate the powertrain systems (H2) potential of a high-performance vehicle application. The platform combines WAE's vehicle and powertrain engineering expertise with a cutting-edge H2 fuel cell system, allowing users to have zero tailpipe emissions.

Emission-Free Transport, Higher Demand for Efficient and Quieter Mobility

The increased awareness among end-users towards the harmful effects of carbon emissions is changing consumer behavior, evolving the global automotive market landscape. The rising prices of fossil fuels are directly affecting people’s financials and saving plans. The electric and fuel-cell technology also promotes quieter operations that are liked by consumers. Increased demand for hybrid vehicles that use fuel cell systems is anticipated to be adopted at a larger scale during the forecast period. Hence, the adoption of fuel cell systems that promote efficiency and capacity is expected to grow.

The fuel cell systems are adopted in private and public vehicles, as it is also becoming an efficient solution for commercial heavy-duty vehicle fleets. These fleets comprise trucks, buses, and other heavy commercial vehicles. It requires strong power output and bigger fuel storage, increasing the overall range and loading capacity of the vehicle.

For instance, in March 2024, Hyzon Motors Inc. introduced its new 200kW fuel cell system and powertrain in prime mover for heavy-duty operation. A heavy-duty truck, prime mover reflects Hyzon Motors’ commitment to technological innovation and meets the operational needs of heavy-duty road transport.

Robust Reliability, Addition, and Expanding Production of New Fuel Options

In terms of reliability, hydrogen fuel cell technology can withstand extremely cold temperatures (below -40 degrees Fahrenheit) and extreme weather conditions (hurricanes, desert storms, winter storms). This enhances the functionality of fuel-cell electric vehicles along with the scalability of the vehicle. The increased production of hydrogen, methanol, ethanol, and other fuel options has also provided fuel cell system developers to build new systems, expanding the overall market size. Furthermore, the increased production facilities for developing automotive fuel cells are adding value to the market growth.

The advanced light commercial vehicles and passenger cars are also adopting hydrogen fuel systems at a larger scale. The fuel cell system developers focus on catering to specific vehicle types. It serves the segmentation of different power outlooks. Apart from the segmentation, the vendor's focus on increasing the supply chain is projected to drive market growth during the forecast period.

For instance, in July 2023, a German company, SFC Energy started its hydrogen and methanol fuel cell manufacturing in India. The company will produce hydrogen and methanol fuel cells in its new Gurgaon plant. Together with the company’s long-time Indian partner, FCTecnrgy (FCT) Pvt Ltd, the Gurgaon plant is expected to generate revenue of around USD 109.41 million annually through the development and manufacturing of new energy supply solutions for the global market.

Government Policies, Subsidies, and Grants to Flourish the Market Growth

Governments around the globe are active participants in the fuel transition program. Authorities are introducing adoption tactics such as subsidies, tax cuts, and other benefits to end-users while they attract businesses through production incentives and grants. The governments partner with international agencies to adopt the latest fuel cell systems. It also builds electric and fuel-cell vehicle fleets to limit emissions and increase the presence of fuel-cell commercial and passenger vehicles.

For instance, in January 2024, the United States Department of Energy (DOE) announced its grant of up to USD 200,000 for commercial innovation related to EV charging infrastructure, EV battery technology, biodiesel, hydrogen, and fuel cell vehicle technologies. The scheme covers domestic small businesses with grants and support.

In October 2023, the DOE also allocated and identified recipients of USD 7 billion for creating hydrogen production and distribution hubs coast-to-coast meant to support the replacement of diesel fuel for heavy trucks.

Low-Operating Temperatures and Higher Inclusivity to Fuel the Segmental Growth

Based on the electrolyte type, the market is distributed into Proton Exchange Membrane Fuel Cell (PEMFC), Direct Methanol Fuel Cell (DMFC), Alkaline Fuel Cell (AFC), Phosphoric Acid Fuel Cell (PAFC), and others. The PEMFC-type segment holds a significant share of the market due to its high efficiency, quick start-up, and low operating temperatures. Apart from these factors, the lower emission and durability delivered by PEMFC also support automotive systems.

A new ethanol dehydrogenation reactor for delivering hydrogen produces pure hydrogen with PEMFC while this type of fuel cell system is also favorable for hybrid systems. The system increases ethanol energy utilization. Companies collaborate with government entities to deliver solutions for the production and utilization of pure hydrogen.

For instance, in December 2023, Sentient Labs, an India-based research and development (R&D) start-up backed by KPIT Technologies, successfully demonstrated a fuel cell propulsion solution for buses. Sentient Labs’ fuel cell bus is a part of KPIT Technology’s larger plan for the development of hydrogen cell technology in India. KPIT Technologies is collaborating closely with the Council of Scientific & Industrial Research, are National Chemical Laboratory (CSIR-NCL) and the CSIR-Central Electrochemical Research Institute (CECRI) to develop domestic hydrogen mobility solutions using proton exchange membrane fuel cell systems.

Focus on Hydrogen Utilization and Investments for Green Mobility to Boost Regional Growth

The European region holds a decent share of the global automotive fuel cell system market. The higher focus on energy transition, emission-less public transport, and research and development drives regional growth. Countries such as Norway, Sweden, France, and Germany are trying to adopt automotive fuel cell technologies. The higher economic activities have led European countries to adopt a sustainable public transport model that comprises a long range of vehicles with alternative fuels. Governments launch projects aiming to accelerate the adoption of fuel cell systems for converting ICE vehicles into FCE vehicles for numerous climate benefits. FCEV-related initiatives are popular among captive fleets, particularly for high-mileage applications such as taxi fleets looking to grow their fleets with FCEVs.

For instance, in December 2023, Toyota Motor Europe announced to launch of the Hydrogen Factory Europe, a regional commercial venture. It will ensure a well-coordinated strategy for the commercialization of hydrogen systems and technology, covering every aspect from development to manufacturing to sales and after-sales. This project is being done to upscale the hydrogen fuel cell system production. In 2026, Toyota will begin selling next-generation fuel cell technology, which will provide automobiles with longer lifespans, better driving ranges, and much lower costs.

Future Market Scenario (2024–2031F)

• The recent developments including the rapid adoption of fuel cell systems in hybrid vehicles including trucks, buses, and commercial vehicles are anticipated to fuel the market growth.

• The discovery of new hydrogen reserves along with the constantly advancing systems are expected to add value to the market dynamics.

• Government subsidies and extended grants for clean energy transition are likely to propel market growth during the forecast period.

• Expanding automotive fuel cell facilities and collaboration with major companies are anticipated to contribute to market expansion.

Key Players Landscape and Outlook

The automotive fuel cell system market comprises major energy and fuel technology players. The competitors focus on addressing specific fuel options while building fuel cell systems that are compatible with vehicles. The companies also partner with fuel research organizations that make these systems more efficient, reliable, and inclusive. Furthermore, companies’ partner, acquire, and collaborate with other brands to strengthen their supply chain and distribution channel. Competitors also look for government tenders for public transport solutions.

For instance, in August 2023, a joint venture of Tata Motors and Cummins Inc., TCPL Green Energy Solutions (TCPL GES) expanded a manufacturing plant in Jharkhand, India to produce hydrogen-based powertrains for commercial vehicles. According to the Memorandum of Understanding (MoU), TCPL GES plans to invest more than INR 350 crores over the years to develop fuel-independent powertrain solutions such as hydrogen internal combustion engines, battery electric vehicle systems, fuel cell electric vehicle systems, and fuel delivery systems.

In August 2023, Ballard Power Systems partnered with Ford Trucks to develop fuel cell-powered heavy-duty trucks utilizing the company's expertise technology in its vehicle. Ford Trucks is planning to build the FCEV F-MAX with the FCmove-XDs 120kW fuel cell engines to be installed in the 44-ton F-MAX long-distance tractor truck.