Hydrogen Fuel Cell Vehicle Market Expected to Reach $46.4 Billion by 2033

According to a new report published by Allied Market Research, titled, “Hydrogen Fuel Cell Vehicle Market," The hydrogen fuel cell vehicle market size was valued at $1.3 billion in 2023, and is estimated to reach $46.4 billion by 2033, growing at a CAGR of 43.2% from 2024 to 2033.

Hydrogen fuel cell vehicles, also known as fuel cell electric vehicles (FCEVs), are a type of electric vehicle that utilizes hydrogen gas as fuel to generate electricity. Unlike battery electric vehicles, which rely on stored electrical energy in batteries, hydrogen fuel cell vehicles produce electricity onboard through a chemical reaction between hydrogen and oxygen. Hydrogen fuel cell vehicles are more efficient as compared to conventional internal combustion engine vehicles and produce no harmful tailpipe emissions. Hydrogen fuel cell vehicles only emit water vapor and warm air. 

The hydrogen fuel cell vehicle industry is segmented into technology, vehicle type, range, and region. On the basis of technology, the market is segregated into proton exchange membrane fuel cell, and phosphoric acid fuel cell. Based on vehicle type, the market is segmented into passenger vehicle and commercial vehicle. On the basis of range, the market is fragmented into 0-250 miles, 251-500 miles, above 500 miles. Region- wise, the market is analyzed across North America, Europe, Asia-Pacific, Latin America, and Middle East and Africa. 

The hydrogen fuel cell vehicle industry is driven by supportive government initiatives for the development of hydrogen fuel cell technology, rise in research and development activities, and rise in demand for zero-emission vehicles. However, lack of refueling stations, insufficient hydrogen infrastructure and storage, and growing inclination towards electric vehicle segment hinder the growth of the market to some extent. On the contrary, factors such as growing advancement in the commercial hydrogen fuel cell vehicle and development of hydrogen fuel cell commercial and heavy- duty vehicles offer lucrative opportunity for the growth of the market.    

In addition, the market is highly competitive, with several key players dominating the industry. Prominent manufacturers focus on innovation, product differentiation, and strategic partnerships to maintain their market positions. Market leaders include companies such as Hyundai Motor Group, AB Volvo, Mercedes-Benz Group AG (former Daimler AG), AUDI AG, Honda Motor Co., Ltd., General Motors, BMW Group, MAN SE, TOYOTA MOTOR CORPORATION, and Stellantis.  

Increase in adoption of clean mobility solutions is observed globally due to climatic changes. Continuous usage of fossil fuels in automobiles is a major factor resulting in climate change. Vehicles that run on alternative fuels, such as natural gas, electricity, biofuel, biodiesel, fuel cell, liquid nitrogen, and dimethyl ether result in lesser carbon emissions. Increasing environmental concerns among consumers, introduction of stringent emission regulations, and launch of advanced vehicles supporting alternative fuels are expected to further drive the hydrogen fuel cell vehicle market during the forecast period. 

Several policies have been deployed by the different governments and regulatory bodies to promote the use of hydrogen fuel cell and other sustainable fuel vehicles. For instance, the state of California in the U.S. committed funds for the development of 100 hydrogen refueling stations throughout the country to meet its target of 1.5 million zero-emission vehicles by 2025, which is driving the growth of the hydrogen fuel cell vehicle market size. Furthermore, introduction of Inflation Reduction Act (IRA) of 2022 is further expected to boost the sales of hydrogen electric vehicles in the U.S The law grants hydrogen fuel cell vehicles a $7,500 tax credit. The IRA will also provide a tax credit of $3 per KG for the generation of clean hydrogen. Thus, these types of subsidies and incentives, and strong government support are expected to drive the production and sales of hydrogen fuel cell vehicles during the forecast period. 

However, lack of refueling infrastructure for HFCV in most of the countries is due to the limited number of hydrogen refueling stations. For instance, the hydrogen refueling stations were less than 800 globally in 2020, which hampers the growth of HFCV vehicle sales. Furthermore, in many developing countries such as Brazil, African countries, and other countries, limited presence of hydrogen vehicles and high cost for development impact the growth of the HFCV market. The development of HFCV in underdeveloped countries is slower than in developed countries. 

KEY FINDINGS OF THE STUDY 

• By technology, the proton exchange membrane fuel cell segment is anticipated to exhibit significant growth in the hydrogen fuel cell vehicle market analysis in the near future. 

• By vehicle type, the passenger vehicle segment is anticipated to exhibit significant growth in the hydrogen fuel cell vehicle market forecast in the near future. 

• By range, the 251-500 segment is anticipated to exhibit significant growth in the hydrogen fuel cell vehicle market share in the near future.