Fuel Cell Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Fuel Cell Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The fuel cell market is expected to register a CAGR of more than 14% during the forecast period. With the COVID-19 outbreak in Q1 of 2020, the fuel cell market was negatively impacted, and the growth of the market declined due to the lack of investments and financial support for R&D activities. Factors, such as government subsidies and financial incentives for fuel cell programs and the increasing demand for fuel cell electric vehicles (FCEVs), are expected to drive the market. However, the high cost of catalysts used in fuel cells is expected to hinder the market growth during the study period.

• Vehicular application is expected to dominate the market, due to the increasing innovation in the EV sector and rising economic viability of the technology.
• Rising interest in heavy-duty transport and energy storage applications and huge market potential in Asia-Pacific for fuel cells are expected to create significant opportunities for the fuel cell market in the near future.
• Asia-Pacific is expected to dominate the fuel cell market, with the majority of the demand coming from countries, such as China, India, Japan, and South Korea.

• The rising environmental issues, such as climate change and low air quality, due to significant growth in the regional transportation sector and high fossil fuel consumption, have generated the need for clean energy sources. ​
• Fuel cells generate zero emissions and contribute to eliminating greenhouse gases. A fuel cell majorly uses hydrogen or methanol, reducing economic dependence on oil and gas while optimizing energy security. Rising environmental concerns and increasing infrastructure related to hydrogen refueling stations are likely to support the vehicular fuel cell market’s growth over the forecast period.​
• Moreover, fuel cell-based automotive vehicles have become more lucrative in recent years due to high performance and reduced refueling time. The exhaust in terms of water, a decline in the proportion of emissions, and superior power and torque output play a significant role in terms of the adoption of fuel cell technologies for automobiles.​ The fuel cell technology provides a driving range of over 300 miles on a traditional vehicle. It reduces the weight of carrying heavy batteries compared to battery electric vehicles, thereby boosting the market’s growth over the forecast period. ​
• Furthermore, government regulations for reducing environmental pollution are encouraging the adoption of fuel cells in the automotive sector. ​The countries are focusing on R&D and investing in fuel cell technology to improve their public transportation while reducing harmful emissions​. For instance, the South Korean government is planning to replace around 26,000 CNG buses with fuel cell buses by 2030. ​
• In the coming years, countries, such as China, Japan, and South Korea, are expected to act as a pivot in advancing fuel cell electric vehicle technology, as large corporations such as Toyota and Hyundai-Kia are trying to become the leaders in fuel cell technology. Also, the governments are looking to phase out the battery electric vehicle (BEV) incentives globally, from 2020 onward, paralleled by the continued government subsidies for fuel cell electric vehicles (FCEVs) in Asian countries, such as China, Japan, and South Korea.
• As per the IEA's Global EV Outlook 2021, in 2020, South Korea gained a leading market share in FCEVs, surpassing the United States and China, to reach more than 10,000 vehicles. To support these FCEVs, South Korea increased the hydrogen refueling station (HRS) by 50%, with 18 new stations in 2020.
• Hence, the vehicular application is expected to dominate the market due to the increasing technological innovation and rising private player involvement.

• Asia-Pacific accounted for the significant share in 2021, and it is expected to continue its dominance during the forecast period. Asia-Pacific is one of the promising regional markets for fuel cells in the coming years, on account of the favorable government policies in countries such as China, Japan, and South Korea, which are driving clean energy usage. Among the available fuel cell technologies, the PEMFC is the most commonly used fuel cell in the region.
• China has great potential in the fuel cell market, as the government is increasingly focusing on ways to utilize clean energy technology in order to switch to a low-carbon economy.
• Moreover, the country's hydrogen fuel cell industry has been gaining traction on the back of favorable national and provincial government subsidies and incentive programs from local authorities to encourage the uptake of hydrogen vehicles to cut pollution.
• In China, an order for 74 fuel cell electric buses (FCEBs) was placed by the government of Zhangjiakou City in preparation for the 2022 Winter Olympics. The deployment of FCEBs is likely to grow in other cities in China in the near future.
• In September 2021, Hyzon Motors Inc. announced the signing of a memorandum of understanding (MoU) with Shanghai Hydrogen HongYun Automotive Co. Ltd for the purchase of 500 hydrogen-powered electric trucks. The initial order of 100 vehicles is expected before the end of 2021, while the other 400 vehicles will be ordered in 2022.
• Furthermore, in November 2021, Hyzon delivered the fuel cell trucks as part of a larger order of 62 hydrogen vehicles.
• As per the IEA's Global EV Outlook 2021, China accounts for 94% of global fuel cell buses and 99% of fuel cell trucks. The fuel cell electric vehicle market almost doubled, owing to outstanding expansion in China, Japan, and Korea.
• Therefore, factors such as supportive government policies and efforts to incorporate fuel cell technology in transportation and other applications are expected to drive the region's fuel cell market during the forecast period.

The fuel cell market is moderately fragmented. The key players in the market include Ballard Power Systems Inc., FuelCell Energy Inc., Mitsubishi Power Ltd, Plug Power Inc., and Cummins Inc.

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