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The global fuel cell powertrain market size was valued at USD 144 million in 2021 and is projected to grow from USD 235.8 million in 2022 to USD 12,530.3 million by 2029, growing at CAGR of 89.3% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with fuel cell powertrain experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of -16.54% in 2020 as compared to 2019.
A Fuel Cell Powertrain (FCP) is an electric propulsion system in which the hydrogen energy stored is converted into electric power using a fuel cell. FCPs do not emit harmful tailpipe emissions compared to Internal Combustion Engine (ICE) powertrains. According to the U.S. Department of Energy (DOE), adopting FCP has enhanced the country's energy security. In addition, government initiatives have propelled the growth of the hydrogen refueling infrastructure along with rapid technological advancement of fuel cell vehicle efficiency that influences the overall fuel cell powertrain market growth.
Global production of FCEVs witnessed a significant drop in 2020 due to the adverse impact of the COVID-19 pandemic. The pandemic-induced lockdown in 2020 has led vehicle production to a severe downturn as factories were forced to shut down or operate at reduced capacity. Therefore, lower vehicle production has adversely impacted the overall fuel cell powertrain market share. Additionally, government-enforced lockdowns and restrictions on travel and transportation-related activities significantly impacted the demand for fuel-cell electric vehicles.
For instance, according to the California Fuel Cell Partnership, in 2020, in the U.S., sales of popular FCEV models witnessed a significant drop in sales. For instance, sales of the Toyota Mirai were down by 67%, Hyundai NEXO was down by 22%, and sales of other models were down by 28%.
In 2020, China witnessed a nearly 65% decline in fuel cell electric vehicle sales compared to 2019. The downtrend continued in 2021. This decline in FCEV sales negatively impacted the demand for the fuel cell powertrain. However, economies such as South Korea, Germany, and Japan witnessed growth in sales in 2020 due to increased demand for green mobility and government initiation to provide developed hydrogen refueling infrastructure. Moreover, the economic downturn and severely strained public transportation budgets due to COVID-19 also negatively impacted the global market.
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Growing Adoption of Clean Energy Vehicles to Emerge as a Trend in the Global Market
Rising environmental concerns among the populace and the government's focus on fighting climate change are driving the adoption of clean energy vehicles such as FCEVs and pure Electric Vehicles (EVs). Along with the rapidly growing adoption of electric vehicles, fuel cell vehicles are also witnessing considerable adoption across some advanced economies such as the U.S., South Korea, and others.
South Korea has the highest number of fuel-cell vehicles on the road. For instance, according to the International Energy Agency, in 2020, South Korea had approximately 10,093 units of FCEVs on the road, followed by the U.S. with on-road 9,252 FCEVs. Similarly, other economies such as China, Japan, and others also have a significant number of on-road FCEVs. With government investments and expected hydrogen infrastructure development shortly, the developing economies are also anticipated to witness considerable adoption of FCEVs. According to IEA, by the end of 2020, there were around 34,804 on-road FCEVs worldwide, and the number is anticipated to surge in the coming years.
Automaker's Plans to Ramp Up FCEVs Production to Accelerate Market Growth
All the leading automakers are focused on developing green mobility to offer future mobility solutions worldwide. Therefore, the automakers are investing significantly to ramp up the production of green mobility solutions such as electric and fuel cell electric vehicles that require fuel cell powertrains. For instance, in September 2021, Hyundai Motor Group announced its strategy to offer hydrogen fuel cell versions of all its commercial vehicles by 2028. The company stated that it would keep developing hydrogen fuel cell vehicles along with electric vehicles. Moreover, the company also announced its plan to launch new hydrogen fuel cell powertrains in 2023.
Similarly, automakers such as BMW, Toyota Motor Corp, Daimler, and others also embrace hydrogen fuel cell technology to offer future mobility solutions. In 2020, Toyota redesigned its fuel cell system for fuel cell powertrain to have fewer principal components and revamped other aspects of its fuel cell vehicle, enabling the company to reduce production costs by two-thirds and enhance manufacturing capacity to nearly 30,000 units annually. Therefore, such key players' involvement in developing and ramping up FCEV production will contribute to the market growth during the forecast period.
High Fuel Economy and Long Travel Range to Augment Market Growth
Fuel Cell Electric Vehicles (FCEV) are powered by hydrogen as a fuel. FCEVs are more fuel efficient compared to conventional IC engine vehicles. For instance, according to the U.S. Department of Energy Hydrogen Program, under normal driving conditions, the gasoline engine in a conventional vehicle is less than 20% efficient in converting chemical energy in gasoline into power to move the vehicle. In contrast, FCEV’s energy corresponds to over 50% reduction in fuel consumption than gasoline IC engines.
Additionally, hydrogen is abundant on earth as an element and is also found in compounds such as methane (CH4), water (H2O), and others. Therefore, pure hydrogen (H2) is utilized in FCEVs after separating from these compounds. Due to abundant availability and low production cost, the cost of hydrogen fuel is anticipated to drop in the near future. In contrast, the cost of conventional fossil fuels such as gasoline and diesel is hovering rapidly due to limited availability and expensive production cost.
Moreover, FCECVs manufactured for commercialization have a driving range of approximately 385 and 700 km (240 and 435 miles) on a full tank, comparable to conventional vehicles and higher than Battery Electric Vehicles (BEVs). The high fuel economy and efficiency of FCEVs, coupled with other factors, such as the high energy density of hydrogen fuel and long driving range compared to alternatives, are expected to drive the market's growth during the forecast period.
Lack of Hydrogen Production, Storage, and Distribution Infrastructure to Limit Market Growth
The lack of hydrogen production, storage, transportation, and distribution infrastructure is one of the greatest obstacles restraining market expansion worldwide. Hydrogen as a fuel is highly flammable and difficult to store. Hydrogen leakage generates a severe risk of fire hazards.
Additionally, hydrogen ignites more easily compared to diesel and gasoline fuels. Moreover, hydrogen's odorless, colorless, and tasteless feature makes it more difficult to detect leakage and ignition. Therefore, a well-developed infrastructure for the production, storage, and distribution of hydrogen fuel is highly essential to power a fuel cell's powertrain. However, being a nascent technology, the lack of facilities available for hydrogen fuel storage and distribution in developed and emerging economies is restraining the adoption of FCEVs, further limiting the market growth.
Less than 150kW Segment to Dominate Owing to Increasing Demand for Passenger and Commercial Vehicles
Based on 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 dominated the market in 2021 and is expected to continue its dominance throughout the forecast period. The majority of fuel cell electric vehicles, especially passenger vehicles sold worldwide, have a power output of less than 150kW. For instance, one of the best-selling fuel cell vehicles, the Toyota Mirai, has a powertrain that provides a power output of 128kW. Therefore, increasing demand for fuel-cell passenger cars is anticipated to drive the segment growth in the near future.
The more than 250 kW is the fastest-growing segment. The more than 250 kW fuel cell electric engine unit has been designed for heavy-duty commercial vehicle applications. Fuel cell vehicles are gaining popularity in commercial space due to their fast refueling and long range. Therefore, the increasing demand for fuel cell vehicles with higher power output in heavy-duty commercial vehicles is likely to surge the demand for more than 250kW segment.
150 – 250 kW powertrains are used for medium-duty heavy vehicle goods carriers. It is specifically used for small and medium-duty commercial vehicles such as transit buses and utility applications. Increasing demand for higher power output in commercial FCEVs is likely to drive segment growth in the near future.
Hydrogen Storage System Segment to Lead Backed by Development in Technologies Related to Hydrogen Storage System
Based on component, the market is segmented into fuel cell system, battery system, drive system, hydrogen storage system, and others.
The fuel cell system segment holds the largest share of the market, with the highest CAGR over the forecast period. The fuel cell system in FCEV is one of the major and most expensive components. The fuel cell system consists of the fuel cell, which accounts for nearly 60% of the cost of FCEV. Therefore, increasing FCEV sales is surging the demand for fuel cell systems, further fueling the fuel cell system segment growth.
Battery system holds the second-largest share of the market. All Fuel Cell Electric Vehicles (FCEVs) use electricity to power an electric motor in contrast to other electric vehicles. The low-voltage auxiliary battery delivers electricity to start the vehicle and power vehicle accessories. The secondary high-voltage battery stores energy generated from regenerative braking and provides supplemental power to the electric traction motor. Increasing demand for advanced battery systems for high-capacity energy storage and auxiliary battery for other functions in FCEV is anticipated to drive the segment growth.
The drive system segment holds a significant share of the market. The drive system uses power from the fuel cell and the traction battery pack and provides the motor to initiate the driving of the wheels. Increasing demand for zero-emission and economical drive systems in FCEVs is expected to propel the segment growth.
Hydrogen storage accounts for a considerable share of the market. Hydrogen storage is a storage system that is critical in a complete FCP. The stored hydrogen gas compressed at extremely high pressure increases the vehicle's driving range. Therefore, increasing research and development on advanced storage methods for hydrogen storage for vehicle safety is likely to accelerate segment growth.
The others segment accounts for a decent market share. The other segment includes electric motors and power control units, which help in propelling the vehicle more quietly, smoothly, and efficiently with less maintenance. Increasing demand for green mobility worldwide drives FCEV sales, further fueling segment growth.
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Passenger Cars Segment to Dominate Backed by Growing Adoption of Passenger Cars
The market is segmented based on vehicle type: passenger cars, commercial vehicles, and buses.
By vehicle type, the passenger cars segment dominated the market in 2021 and is expected to witness the fastest CAGR during the forecast period. A passenger car is a major contributor to the fuel cell-based powertrain business. The increasing popularity of passenger fuel cell vehicles such as Toyota Mirai, Hyundai NEXO, and others, coupled with the automaker’s efforts to roll out new passenger vehicles powered by the fuel cell to provide the increasing demand for green mobility worldwide, is expected to boost the segment growth during the forecast period.
The bus segment is the fastest-growing segment estimated to exhibit a high CAGR during the forecast period. Manufacturers are heavily investing in the advancement of fuel-cell bus technology to meet the transit agency's targets for reliability and durability. However, replacement of parts, supply issues, and the cost of hydrogen fuel continue to be challenging for transit agencies deploying fuel-cell electric buses. Therefore, these factors influence the growth of this segment during the forecast period.
The commercial vehicle segment accounts for a considerable market share. A commercial vehicle is a vehicle required to be registered which is utilized for the transportation of personal goods and people. Some Asia Pacific countries contribute significant shares in commercial fuel cell vehicles. Growing adoption of commercial fuel cell vehicles worldwide due to their long range and fast refueling capability is likely to drive the segment growth.
Asia Pacific Fuel Cell Powertrain Market Size, 2021 (USD Million)
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Asia Pacific dominated this market in 2021 and is anticipated to continue its dominance throughout the forecast period with the fastest CAGR. The surge in the adoption of fuel-cell vehicles in economies such as South Korea and China is driving the market growth. The government in South Korea is highly focused on improving the hydrogen infrastructure in the region. For instance, in December 2021, the South Korean government announced 43 hydrogen stations along motorways by the end of 2022. The government is highly focused on green mobility adoption.
North America held the second-largest share in 2021. Increasing demand for FCEVs in the California region is driving market growth. In February 2022, Chevron U.S.A. Inc. and Iwatani Corporation of America (ICA) announced their contract to build 30 hydrogen fueling stations in California. California Air Resources Board (CARB) predicts that California will have over 176 hydrogen stations to support approximately 250,000 fuel-cell vehicles. Therefore, developing hydrogen infrastructure and increasing demand for emission-free vehicles drive market growth in the specified region.
The European market is characterized by initiatives such as the Fuel Cell & Hydrogen Joint Undertaking (FCH JU), financing the JIVE project (Joint Initiative for hydrogen vehicles across Europe) with USD 32 million of funding. The JIVE project aims to deliver 291 fuel cell buses across Europe by 2023. Likewise, 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 fuel the growth of this region's market.
The Rest of the World is also anticipated to register decent growth rates during the forecast period. Countries such as Chile, Argentina, and Costa Rica adopted low-carbon hydrogen, thus boosting the market's growth in the specific region.
Rising Focus on Fuel Cell Powertrain Technology Development to Drive the Competition
The market is vastly fragmented and led by several global players operating in this industry. The companies focus on expanding their product range to cover a more extensive fuel cell powertrain customer base. Moreover, fuel cell systems are emerging as a more viable solution than battery-electric solutions for long-distance freight operations and transporting heavy loads. Hence, the technological advancement of fuel cell-related powertrains for heavy-duty applications is a key area of focus for several market players.
With a Diverse Product Portfolio, Robert Bosch GmbH emerged as a Leading Player in the Market
Robert Bosch GmbH has more than 200 years of experience in automotive solutions, industrial technology, and energy and building technology. Established & headquartered in Germany, it has a more comprehensive global presence in around 60 countries. The company offers fuel cell stacks, electric air compressors, hydrogen gas injectors, anode recirculation blowers, tank valves, fuel cell control units, e-axle, and high voltage DC converter generation 3evo in its powertrain segment. Bosch has a significant revenue share in automotive and automotive components. Europe contributes to the company's revenue shares majorly.
An Infographic Representation of Fuel Cell Powertrain Market
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The report provides detailed fuel cell powertrain market analysis and focuses on key aspects such as leading companies, product types, end-users, design, and technology. Besides, it offers insights into market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market in recent years.
Value (USD Million) & Volume (Units)
By Power Output
By Vehicle Type
Fortune Business Insights says that the market was valued at USD 144 million in 2021 and is projected to reach USD 12,530.3 million in 2029.
The market is expected to register a growth rate of (CAGR) 89.3% during the forecast period 2022-2029.
High fuel economy and long travel range drive global market growth.
Asia Pacific led the global market in 2021.
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