Hydrogen technology, as a whole, is relatively new and can be seen as polarising. While some see a promising future for it, others remain skeptical, citing concerns over a lack of infrastructure, investment, and doubts about its carbon neutrality. Although hydrogen is generally considered vital for achieving climate goals and reducing emissions, its role in the automotive sector remains uncertain. This is largely due to the growing prevalence of electric vehicles ("EVs") in the decarbonisation of transport. However, hydrogen-based fuel-cell electric vehicles (“FCEVs”) could also provide a viable method for decarbonising the sector. This article will explore the current state of the market for hydrogen-powered vehicles and provide an overall appraisal of hydrogen technology within the automotive industry.
Hydrogen in Trucks
The use of hydrogen to decarbonise road transport is expanding rapidly year on year, increasing by around 55% in 2023 compared to the previous year 1 . Despite this, road transport accounted for only 0.1% of global hydrogen demand.
Trucks were the fastest-growing sector for fuel-cell vehicles, with the stock increasing by over 50% in 2023 2 , more than twice as fast as buses and three times faster than cars. This growth can be largely attributed to the rise in heavy fuel trucks in China. China is the largest market for fuel-cell electric vehicles (“FCEVs”), growing almost twice as fast as the United States and more than three times as fast as in Europe 3 . In Korea and Japan, the focus for FCEVs has been on light-duty vehicles, although growth in this area has slowed.
To quantify the prominence of the Chinese FCEV market on the global stage, sales of hydrogen-powered commercial vehicles in China outnumbered global purchases of fuel-cell cars in the first nine months of 2024, according to SNE Research 4 . While global FCEV sales fell by 17% compared to the previous year during the same period, Chinese commercial FCEV sales increased by 22.8%, accounting for 52.5% of the global market. During this time, the US and South Korea saw declines of 84.2% and 25.8% in FCEV sales year-on-year, respectively. In contrast, the Japanese market more than doubled, and Europe saw a minor increase in FCEV sales, from 670 units to 698 in the first nine months of 2024 5 .
Hydrogen in Trains
Hydrogen fuel technology is not limited to road vehicles but has also been adapted for trains, known as ‘Hydrails’. For instance, East Japan Railway has developed a hydrogen-powered train capable of reaching speeds of 110 km/h over short distances 6 . Moreover, in 2024, Stadler’s Swiss hydrogen-powered train achieved a record-breaking journey of 2,803 km without recharging 7 . These advancements, along with recent battery-hydrogen train orders in France, Italy, and the US, demonstrate the ongoing innovation, investment, and confidence in hydrogen technology.
Hydrogen in Automotives
Many equipment manufacturers and direct suppliers are making significant strides in hydrogen technology, with substantial investments fuelling innovation in this field. Major automotive companies like BMW, Toyota, Honda, and Hyundai are leading the way, focusing heavily on hydrogen-based FCEVs. Recently, BMW and Toyota announced a partnership to develop the next generation of fuel cell powertrain technology 8 , highlighting the ongoing advancements in this area. At the same time, the alternative approach of hydrogen-powered combustion engines continues to attract interest from research and development centres worldwide. The next section will explore these two key paths in hydrogen automotive technology: FCEVs and hydrogen-powered combustion engines.
Battery-Electric Vehicles vs. Fuel-Cell Electric Vehicles
Generally, there are two main types of electric vehicles: battery-electric vehicles (BEVs) and fuel-cell electric vehicles (FCEVs). These vehicles are powered either by electricity sourced from the grid, hydrogen fuel cells, or sometimes a combination of both. For instance, the Revo Zero Model Energy car integrates a plug-in battery with a hydrogen fuel cell 9 . However, this article focuses specifically on two categories of hydrogen-powered vehicles: hydrogen fuel-cell cars and hydrogen internal combustion engine vehicles.
Hydrogen-Fuel Cell Cars
To understand the benefits of hydrogen fuel-cell cars (HFCEVs), it’s essential to grasp how they work. These vehicles are powered by an electrochemical reaction between hydrogen (H₂) and oxygen (O₂) within a fuel cell. This process generates electricity to power the motor, with any surplus stored in a battery. Refuelling involves replenishing the pressurised hydrogen tanks at specialised hydrogen refuelling stations. Hydrogen fuel-cell cars are classified as electric vehicles (EVs) because they rely on an electric motor. This means hydrogen technology, as used by manufacturers like BMW, can often be integrated into existing EV platforms with minimal modifications.
While hydrogen fuel-cell technology is considered emission-free at the point of use, its overall sustainability depends on whether the hydrogen is produced using carbon-neutral methods. This mirrors the situation with battery-powered EVs, which are only environmentally friendly if the electricity comes from renewable sources.
Hydrogen Internal Combustion Engine Vehicles
On the other hand, hydrogen internal combustion engine vehicles (HICEVs) operate similarly to traditional internal combustion engines but are adapted to burn hydrogen instead of fossil fuels. The energy released during combustion powers the crankshaft to drive the vehicle.
Although this combustion process produces no CO₂ emissions, it does generate small amounts of nitrogen oxides (NOx), meaning HICEVs emit minor indirect greenhouse gases. Nevertheless, they are still considered a more environmentally friendly alternative to traditional combustion engines.
One example of this technology is the Toyota Corolla H₂ Concept, which has already been featured in motorsport events, showcasing the potential of HICEVs in high-performance scenarios.
Pros and Cons of Hydrogen
Advantages
Hydrogen-powered vehicles present an opportunity for providing environmental benefits compared to fossil-fuel vehicles, particularly in respect of heavy-duty vehicles in locations where access to charging infrastructure is less readily available. For example, in China, hydrogen-powered heavy fuel cell trucks and buses have seen particular growth 10 . Additionally, as per Dr. Palkovics (former Hungarian Minister for Innovation and Technology), the Hungarian national hydrogen strategy “estimates [demand] at least 20 [double-pump] hydrogen refuelling stations” 11 within Hungary alone by 2030. This demonstrates increasing confidence in the technology, despite demand for hydrogen powered personal vehicles slowing significantly in 2023. The greatest opportunities, and the fastest growing sector for fuel-cell vehicles, are in fuel cell trucks, with use cases being undertaken around the world, including in the UK, New Zealand and Saudi Arabia. As FCEVs only emit water vapour, they can help reduce dependence on fossil fuels. Fuel cell truck and buses which run on hydrogen produced by fossil fuels have been seen to reduce greenhouse gas emissions by 15% to 33% compared to their diesel counterparts, which those running on hydrogen produced by renewable energy saw potential emissions reductions of up to 89%. 12 However, despite these encouraging results, progress in this sector is contingent on the widespread adoption of refuelling infrastructure .
One advantage of HFCEVs and hydrogen combustion vehicles is that, at present, they provide longer driving ranges than come battery powered vehicles on the market. This makes hydrogen vehicles particularly well-suited to areas where long-distance travel is required but where the development of charging infrastructure would be too expensive.
New tank technology has also provided positive developments in relation to the safety concerns surrounding hydrogen as a fuel for vehicles (due to possible tank failures, e.g., leaks or ruptures).
Current obstacles
Despite the aforementioned benefits, customers are still wary of the unstable hydrogen fuel market. In the US, fuel station infrastructure is lagging behind demand and hydrogen pump prices increased by 100% between 2021 and 2023 13 . In addition, sales prices for vehicles are generally rising, and there have been recent declines in hydrogen-powered car sales 14 . Furthermore, the IEA has observed that “growth in [hydrogen] fuel cell passenger car stock [has] slowed significantly [in recent years], falling from more than 35% in 2022 to just under 15% in 2023” 15 .
Despite some indications which present the potential emission-reducing capabilities of hydrogen vehicles,, at present, 96% of global hydrogen production is still reliant on non-renewable sources 16 . Without appropriate carbon capture technology, which is still itself in its infancy, the resulting emissions from the production of grey hydrogen somewhat undermine the ability to make “green” claims.
Sceptics also point towards the difficulties of turning hydrogen technology into large-scale production, emphasising the high costs associated with the manufacturing, operation and infrastructure of the technology. For example, without public subsidies, models already available on the market cost around USD 80,000 for a mid- or upper-midrange vehicle. Secondly, as with EVs, HFCEV refuelling infrastructure is still lacking.
More on these topics in the next section.
Evaluating FCEVs and the Refuelling Problem
Infrastructure
Out of the 265 hydrogen refuelling stations in Europe, 105 are in Germany, putting the nation at the forefront of hydrogen technology 17 . However, implementing this infrastructure has been a multi-decade process (specifically, since 1999) and is still not yet complete. In 2023, 92% of all European hydrogen refuelling stations had the ability to accommodate both passenger and commercial vehicles (a dramatic increase from 2019, when only 27% could) 18 .
To produce ‘green’ hydrogen, significant capital investment is required. It is expensive, technologically challenging, and requires significant amounts of energy to produce. Once produced, storage and transportation solutions must be carefully engineered with safety precautions in mind. These infrastructure hurdles are likely the reason why numerous countries (e.g. Italy, Spain, the Czech Republic) still only have a few hydrogen refuelling stations for the entire nation, and some other countries have none at all yet. Planning, funding, and implementing the infrastructure presents a substantial (and costly) hurdle.
Price
Speaking of cost, hydrogen vehicles are not known for being particularly cheap to purchase or maintain. While it varies per nation, owning a hydrogen-powered vehicle was found to be around 40% more expensive than owning a gasoline-powered vehicle 19 . At present, to power a vehicle for a 100-km journey, a diesel/petrol car would cost roughly €10, a battery-electric vehicle would cost €5.30, and a hydrogen-powered vehicle would cost €11.40.
Granted, the production cost and fuel price of hydrogen automotives are expected to decline as the technology becomes more mainstream; however, that cannot happen unless one is willing to invest in and develop it at the current price.
Hydrogen Production and Distribution as an Investment Opportunity
It must be noted that corporations, governments and certain civilians are willing to pay the current prices for the advantages the technology offers (such as good fuel efficiency). This is especially true in countries such as Germany, the Netherlands, and France, where governments have provided subsidies to support hydrogen developments in the transport sector. For example the French government announced in May 2023 that it would provide funding of up to €175m for an existing subsidy, which would focus, in part on new mobility uses. 20 Similarly, in 2024, the Dutch government introduced the Hydrogen in Mobility Subsidy scheme which provides grants to companies looking to purchase zero-emission vans or trucks. 21
Specific Public Projects:
Buses in Germany
A leader in the hydrogen technology market, Germany has focused heavily on modernising their public transportation system. A recent initiative involves Solaris Urbino, a public transportation company currently operating hydrogen fuel cell buses in Cologne, Wuppertal, Frankfurt, Munich, and other areas 22 . Further public transportation projects are underway, and the nation is expected to have around 9000 operational hydrogen buses by 2030 23 .
Buses, Trains and Boats in France
France, having developed the world’s first hydrogen-powered bus rapid transit (“BRT”) system, shows no signs of slowing investment in the hydrogen initiative. In their Occitanie Region, 15 diesel busses have been retrofitted with hydrogen combustion engines. 24 Additionally, the Coradia iLint (a hydrogen-powered train) has been making trips through the French countryside 25 , and Les Canalous’ hydrogen-powered tourist riverboat has been floating down the canals of Burgundy 26 .
Buses in the Netherlands
The city of Heinenoord, in the South of the Netherlands, recently unveiled 20 hydrogen-powered public buses and its own hydrogen refuelling station 27 . Additionally, the Government has allocated 125 million Euros towards hydrogen-powered trucks, vans, and the development of 40 hydrogen refuelling stations across the country 28 .
Trucks and Buses in Switzerland
Similarly, Switzerland has implemented a Hyundai Xcient Fuel Cell truck for its postal service and has developed the necessary hydrogen fuelling stations for its use. 29 They also intend on having 1,600 hydrogen-powered trucks on their roads by 2025 30 . Additionally, hydrogen-powered public buses are currently running in the canton of Luzern, with aims for the technology’s expansion across the entire country before 2040 31 .
Some Private Pioneers Invest in Hydrogen Cars and Trucks:
Despite significant costs, private companies in the automotive sector are also looking to expand their portfolios by seizing the technology’s potential.
Development of Passenger Vehicles:
- Japanese companies such as Honda (with the Honda Clarity), Toyota (with its Toyota Mirai, one of the first hydrogen fuel cell vehicles to be sold commercially), Hyundai (with the Hyundai Nexo), and Kawasaki are currently at the forefront of hydrogen technology 32 32 32 .
- BMW and Toyota have embarked on a joint venture to create a hydrogen fuel cell vehicle series, including the iX5 Hydrogen 33 . They have confirmed that the first vehicle in this series will be launched in 2028.
- The supercar realm has also begun to integrate hydrogen technology into their field with the Hyperion XP-1. Boasting a 3–5 minute charging time, an acceleration of 0-60 mph in 2.25 seconds, and a top speed of 221 mph 34 , the American car proves that hydrogen has a future within the luxury car industry.
Development for Commercial Purposes:
- America’s United Parcel Service (“UPS”) has invested in hydrogen-powered trucks to further their initiative of eliminating carbon-dioxide emissions from their routes 35 .
- Volvo Group and Daimler Truck AG are currently making progress after having formed a joint venture project which aims to develop hydrogen fuel cells for commercial trucks 36 . While still in its infancy, this venture will rely on the fast-charging, energy-efficient nature of hydrogen fuel cells to assist transportation within the logistics sector.
Conclusion
As this article has detailed, hydrogen technology is still largely being tested for use at scale within the automotive industry. While there are clear benefits, and we can certainly expect much more growth in the future, the corresponding infrastructure still requires a lot of progress and the viability of hydrogen as a truly competitive carbon-neutral option is still to be fully assessed.
At present, what is needed is additional capital investment, innovation, and patience from both buyers and investors. Some experts suggest that hydrogen automotives can only be reasonably implemented within the commercial or public transportation spheres; however, others hold out hope for passenger vehicles as well.
