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The global fuel cell powertrain market size was USD 108.1 million in 2019. The global impact of COVID-19 has been unprecedented and staggering, with fuel cell powertrain witnessing a positive demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a growth of -0.04% in 2020 as compared to the average year-on-year growth during 2016-2018. The market is projected to grow from USD 103.6 million in 2020 to USD 3,040.1 million in 2027 at a CAGR of 62.1% during the 2020-2027 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Fuel cell powertrain (FCP) is an electric propulsion system where the energy stored as hydrogen is converted into electric power by using a fuel cell. Unlike the internal combustion engine (ICE) powertrains, FCPs do not emit harmful tailpipe emissions. According to the US Department of Energy (DOE), the adoption of FCP has enhanced the country's energy security. Government initiatives propelling the growth of the hydrogen refueling infrastructure and rapid technological advancement of fuel cell vehicle efficiency are expected to influence the growth of the market.
Reduced R&D Investments Owing to COVID-19 Pandemic May Hamper Growth
The increasing sale of fuel cell electric vehicles (FCEV) is the key factor in the fuel cell powertrain market growth. However, owing to the pandemic-induced lockdown, several OEMs were forced to halt production in the first quarter of 2020. Furthermore, several OEMs resumed production in the second quarter at lower capacity utilization. Hence, lower vehicle production and reduced vehicle demand have led to a considerable drop in FCP demand. This is likely to lead to reduced investment in innovative R&D initiatives over the short to mid-term. Hence, reduced demand for FCPs owing to lower vehicle production, increased emphasis on commercial vehicle (LCV, HCV) applications, and reduced investment over the short term is the key impact of COVID-19 on the market.
The rapid growth of e-commerce during the pandemic is expected to lead to high demand for commercial trucks to support online purchase deliveries. Hence, there will be a greater emphasis on the development of FC powertrain solutions for commercial applications. Furthermore, green recovery plans and stimulus packages in countries such as the US, China, and some parts of Europe will benefit from hydrogen infrastructure projects. Green recovery packages are likely to benefit the purchase of zero-emission vehicles such as FCEVs in terms of new subsidies that will reduce the cost burden on consumers.
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Reduction in Hydrogen Cost to Open Multiple Growth Opportunities
A key area of focus to boost fuel cell vehicles is the reduction of hydrogen production and supply cost. Hence, efforts to reduce production cost through higher efficiency & scaling up of brown coal gasifier and storage & transportation cost via liquefaction efficiency improvement have been under consideration by several companies. Additionally, the scaling-up of the liquefied hydrogen tank and reduction in CO2 separation costs will favor the market growth. This will increase the viability of hydrogen fuel with other conventional fuels that will positively affect the growth of the fuel cell powertrains in the global market.
Fast Refueling and High Energy Density of Fuel Cell Powertrain to Drive Growth
According to the US Department of Energy, fuel cell electric vehicles (FCEV) provide a fuel economy of around 63 MPG (miles/gallon gasoline equivalent) on highways as compared to 29 MPGge for conventional internal combustion engine (ICE) vehicles. Furthermore, the fuel economy of FCEVs on urban roads is around 55 MPGge compared to 20 MPGge for conventional vehicles. The energy density of hydrogen is around 120 megajoules/kilogram (MJ/kg), which is around three times more than gasoline and diesel (45.8 and 45.5 MJ/kg, respectively).
FCEVs provide a significantly greater driving range on a full tank. For instance, a drive of around 300 miles without refueling can be achieved using an FCEV compared to around 110 miles for an average fully charged battery electric vehicle. Furthermore, refueling time is also less compared to conventional vehicles. Hence, these factors fuel the demand for FCEVs, which will drive the growth of the global market.
Supportive Government Initiatives to Augment Growth
Federal funding is crucial to develop the infrastructure for the widespread adoption of FCEVs. With the increased awareness regarding the effects of vehicular emissions on the environment, governments have introduced strategic plans and roadmaps to fuel the adoption of FCEVs. For instance, South Korea announced the Hydrogen Economy Roadmap in January 2019. This plan aims to deploy 79000 fuel cell passenger cars, 2000 fuel cell buses, and 310 refueling stations by 2022.
Furthermore, in June 2019, the Ministry of Economy, Trade & Industry of Japan (METI), the US DOE, and the European Commission Directorate-General for Energy (ENER) entered into a partnership for future cooperation on hydrogen and fuel cell technologies. Hence, the increase in government initiatives for the advancement of fuel cell infrastructure is expected to drive the market's growth.
High Demand for Low-cost Plug-in Hybrid & Battery Electric Vehicles (PHEV & BEV) to Restrain Growth
Various vehicle models such as SUVs, hatchbacks, and sedans are available in plug-in hybrid and battery electric variants at a significantly lower cost than FCEVs. For instance, the Copenhagen Centre on Energy Efficiency (C2E2) conducted a study on hydrogen fuel cells & battery efficiency in March 2019. According to the study, the price to fully charge the Tesla Model 3 (a BEV) was 15 euros rather than 47.5 euros for the Toyota Mirai (an FCEV). Furthermore, the price/km was 0.030 euros for Model 3, whereas it was 0.095 euros for the Mirai. Moreover, the initial purchase cost is significantly higher compared to battery-electric and plug-in hybrid vehicles. Hence, the total cost of ownership (TCO) is exponentially higher, making them less feasible for most consumers. These factors are likely to restrain the growth of the market.
Less than 150 kW Segment to Hold Largest Fuel Cell Powertrain Market Share Owing to Optimum Efficiency
Based on the power output, the market is segmented into less than 150 kW, 150-250 kW, and more than 250 kW.
The less than 150 kW segment is expected to dominate the market during the forecast period due to an optimum combination of a smaller hydrogen storage system that maintains low vehicle weight and a long driving range. For instance, most popular FCEV models, such as the Honda Clarity Fuel Cell, Toyota Mirai, and the Daimler B-Class F-Cell, are equipped with powertrains that provide a power output of 130 kW, 113 kW, and 100 kW, respectively. Hence, these factors are fueling the growth of this segment.
The more than 250 kW segment is expected to showcase significant growth in the market. This is attributed to the increasing adoption of fuel cell buses that use a high output powertrain to deliver fuel economy comparable to conventional buses, especially during highway driving.
Fuel Cell System Segment to Exhibit a Higher CAGR Backed by Decreasing Cost
Based on components, the market is segmented into fuel cell systems, battery systems, drive systems, hydrogen storage systems, and others.
The fuel cell systems segment is anticipated to showcase significant growth in the market owing to the decreasing cost of key fuel cells stack parts such as the bipolar plates, stack housing, and MEA (membrane electrode assemblies).
The battery systems segment is expected to experience significant growth in the market. The battery pack used in fuel cell vehicles is much smaller, and the manufacturers are developing new battery chemistries that will allow higher efficiency without increasing the battery size. Hence, these factors are attributed to the growth of this segment.
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Passenger Cars Segment to Dominate Spurred by High Fuel Economy
Based on vehicle type, the global market for fuel cell powertrain is segmented into passenger cars, commercial vehicles, and buses.
The passenger cars segment is expected to dominate during the forecast period. Fuel cell passenger cars offer fast fueling times and provide superior fuel economy over a long distance. This is likely to contribute to the growth of the segment.
The buses segment is anticipated to exhibit a higher CAGR during the forecast period. Manufacturers are investing heavily in the advancement of fuel cell bus technology to meet the transit agency's targets for durability and reliability. However, replacement parts supply issues, and the cost of hydrogen fuel continues to be a challenge for transit agencies deploying fuel cell electric buses. Hence, these factors will influence the growth of this segment during the forecast period.
Asia Pacific Fuel Cell Powertrain Market Size, 2019 (USD Million)
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Asia Pacific is expected to remain at the forefront and hold the highest position in the global fuel cell powertrain market in the forthcoming years. In 2019, the region stood at USD 72.7 million. This is characterized by policies supporting the sale of fuel cell vehicles, especially in China, South Korea, and Japan. For instance, according to the International Energy Agency (IEA), vehicle sales in South Korea and China increased from 4100 in 2017 to and 4400 in 2019. There is a greater emphasis on the adoption of fuel cell light-duty trucks and buses in public transit operations in China. Hence, the country accounts for 98% of the global truck and 97% of the global fuel cell bus stock. Additionally, the number of hydrogen refueling stations (HRS) is increasing rapidly, with 20, 13, and 41 new stations added in 2019 in South Korea, Japan, and China, respectively.
The market in North America is expected to showcase significant growth in the market. This is attributed to the high demand for passenger cars, particularly in the US. For instance, the US accounts for 7997 cars (98.8) of the total FCEVs (8093) in North America. According to the California Air Resources Board (CARB), the number of hydrogen refueling stations is anticipated to increase from 63 to around 200 stations by 2025. Hence, these factors are fueling the growth of the market in this region.
The market in Europe is characterized by initiatives such as the FCH JU (Fuel Cell & Hydrogen Joint Undertaking), which is funding the JIVE project (Joint Initiative for hydrogen vehicles across Europe) with a USD 32 million grant. The JIVE project aims to deploy 291 fuel cell buses across Europe by 2023. Similarly, countries such as Germany, France, and Spain have also set targets for HRS deployment to support the long-term use of FCVs. Hence, these factors are fueling the growth of the market in this region.
Product Innovation by Ballard Power Systems and Arcola Energy to Strengthen Their Market Positions
Key players in the market include Cummins Inc., Robert Bosch GmbH, Ballard Power Systems, Arcola Energy Limited, and FEV Europe GmbH. For long-distance freight operations and transporting heavy loads, fuel cell systems are emerging as a more viable solution than battery-electric solutions. Hence, the technological advancement of FCP for heavy-duty applications is a key area of focus for several market players.
For instance, Arcola Energy, a company specializing in hydrogen and fuel cell systems integration, introduced a new hydrogen FCP platform specially designed for vehicle applications with high-duty cycle and fast refueling capabilities. The A-drive platform integrates & optimizes the performance of all components in a fuel cell powertrain. It is scalable for a range of trucks, heavy-duty fleets, public transport applications such as buses, and even trains and municipal operations. Hence, a greater focus on developing heavy vehicle FCP applications is expected to bode well for the growth of the market positively.
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The market research report covers a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading product applications. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the factors mentioned above, the report delivers an in-depth market analysis of several factors contributing to its growth over recent years.
Value (USD Million) & Volume (Thousand Units)
By Power Output
By Vehicle Type
Fortune Business Insights says that the global market size was USD 108.1 million in 2019 and is projected to reach USD 3,040.1 million by 2027.
In 2019, Asia Pacific stood at USD 72.7 million.
Registering a CAGR of 62.1%, the market will exhibit steady growth during the forecast period (2020-2027).
The passenger cars (PCs) segment is expected to lead this market during the forecast period.
Supportive government initiatives to boost the development of hydrogen infrastructure and the growing adoption of fuel cell vehicles are the key factors driving the market's growth.
Cummins Inc., Ballard Power Systems, and Robert Bosch GmbH are the major players in this market.
The decreasing price of system components and the high fuel economy of FCEVs are expected to drive the adoption of FCPs during the forecast period.
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