Market Report: Hydrogen mobility – Today and into the future

For over a century, road transport has been propelled by internal combustion engines consuming liquid fossil fuels, and with good reason. The fuels are relatively cheap, energy dense, and relatively easily stored and handled, while the engines are well-understood, reliable, and durable. However, this combination is incompatible with averting the coming climate crisis, facing manufacturers and operators with difficult decisions.

In this report, Ricardo gives an overview of the current state, and future potential for the hydrogen mobility market, with a focus on hydrogen for trucks.

Hydrogen as a fuel source

Hydrogen is the most abundant element in the universe, being part of the chemical composition of conventional fossil fuels, and water.

Grey hydrogen, produced through the steam methane reforming process that involves the cracking of natural gas into hydrogen while releasing large volumes of carbon dioxide (CO2), has been used in industry for decades. As a fuel source, hydrogen’s applicability is no new concept, however, the recent advancement of technologies that enable green hydrogen production and its application is a hot topic, particularly within the transport sector.

For hydrogen to be green, it must be produced from renewable sources, such as wind or solar. In an ideal world, this would be a simple process. However, from our experience in supporting organisations transitioning to hydrogen, we commonly find that there are more complex challenges around renewable availability and variability, grid and water supply connections, and the logistical challenges of green hydrogen itself. With larger-scale production and use, these challenges can be significant.

Passenger car progress and trends: EV and FCEV

It is important to consider the maturity of the market when comparing electric vehicle (EV) progress to hydrogen vehicles (FCEVs). In many countries, the number of EV charging points is increasing at a rapid rate to meet demand. The IEA reported that the number of publicly available charging points was up 40% globally in 2021 to approximately 1.8 million, whilst the number of hydrogen refuelling stations remains in the hundreds¹.

Hydrogen refuelling stations are expensive, require additional space and safety considerations in busy fuel forecourts, and need a reasonable demand for the hydrogen. All of which increases investment risk and reduces the pace of roll-out. Without these stations, owning a hydrogen vehicle is generally unviable for individual use. As less than 1% of globally produced hydrogen is green hydrogen, powering hydrogen vehicles with the CO2-intensive grey hydrogen would be counter-productive, given the overall goal of hydrogen vehicles is to decarbonise.

The California Fuel Cell Partnership (now the Hydrogen Fuel Cell Partnership/HFCP) reported that there are just under 15,000 hydrogen vehicles in the US today, with decreased sales in 2022 compared to the prior year. With costs to produce hydrogen from renewable resources estimated to fall by 30% by 2030, coupled with increasing experience of mass production of electrolysers and fuel cells expected to bring down costs, it is possible that the market for passenger hydrogen vehicles could recover, while its competitiveness against EVs may be higher for some countries and usage patterns².

Economic models for transportation are likely to shift significantly over the coming years, both to meet global decarbonisation targets, namely the Paris Agreement of 2015, and the march of urbanisation. Concerns of climate change and its subsequent impact have dominated the media in recent years, and for good reason – but are environmental, political, and social influences changing behaviours?

Statista reported that global electric car sales doubled in 2021 to approximately 6.6 million; this statistic includes passenger cars and light commercial vehicles³. In addition, several reports around the world suggest that car leasing is becoming increasingly popular with the rise of vehicle manufacturing costs, urbanisation, and the additional flexibility it offers. For commercial vehicles, this trend may continue.

Given that most companies must either reach national decarbonisation targets, or their own Net Zero targets, an increasing number have a forward-looking approach. Therefore, some may take a view that direct ownership of carbon emitting vehicles may be incompatible with decarbonising. With emissions-related legislation beginning to be introduced across the globe, such as zero-emission zones, incentives for businesses to convert their fleet to zero-emission are increasing, and many businesses may be considering which zero-emission vehicle options are best for their operations.

Hydrogen for trucks

At Ricardo, our experience has frequently found that hydrogen vehicles are preferred to EVs where the energy demand is too great.

© NIKOLA

Hydrogen vehicles are typically capable of fulfilling the same duty cycles as conventional diesel vehicles, with the additional advantages of lower noise and emissions. For certain operations requiring heavy goods vehicles (HGVs), hydrogen could be well suited, such as those with 24-hour operations (logistics, for example), where overnight charging of EVs would be problematic and limit operational hours or require additional vehicles to cover re-charge periods, or for those vehicles where the weight of the battery may limit the cargo mass that can be carried.

HGVs are generally considered as hard to decarbonise due to the extensive distances covered and heavy loads that require large amounts of onboard energy. Being such a competitive market, drastic changes to operations due to battery charging could be detrimental to competitiveness, making hydrogen a potential option.

Hydrogen for HGVs, used in a fuel cell or internal combustion engine, typically offers improved available payload mass, as well as vehicle availability compared to battery electrification. These are important points for HGV operation. This is due to an overall lighter powertrain mass allowing more of the total allowable vehicle weight to be given to the payload, and much faster refuelling times compared to battery charging. In addition, installing the required hydrogen infrastructure at an HGV hub may be paradoxically easier than that required for multi-megawatt charging for each EV truck (NREL noted that fast charging a single truck would need the same power as 3,200 US homes). This could require considerable investment in electrical infrastructure from potentially remote locations to connect to a high-power point in the grid.

The fully electric truck has an operating efficiency advantage over the hydrogen-powered vehicle. Internal combustion engines and fuel cells reach between 40-60% efficiency, whereas the EV can be over 85% efficient from electricity in to motion out. When considered as a total system, the gap between battery and hydrogen grows. Hydrogen electrolysis is typically 40% to 60% efficient – summing the two efficiencies leads to a system efficiency of maybe 25%, without considering the energy to compress or transport the hydrogen.

Therefore, prioritising battery electrification places much less demand on renewable energy production than hydrogen. However, simple efficiency comparisons are meaningless if the battery electric vehicle is not feasible in the first place, be that due to range, payload, uptime or lack of charging infrastructure. This leads to opportunities for hydrogen (and derivatives) power for HGV, off-highway, and other larger power sectors such as marine and aviation.

Hydrogen infrastructure beyond the HGV operator hub is mostly non-existent in many countries at the moment, whereas EV charging, including high power facilities, is growing. Certain government commitments seek to address this in targeted areas. Fuel cell life is also an issue for trucks. If the useful operational hours of the fuel cell are exceeded and a replacement is needed, the cost will be considerable for a ~400kW FC installation, therefore challenging total cost of ownership (TCO) calculations.

Manufactures are actively focusing on engineering much longer life fuel cells to overcome this issue. The hydrogen ICE (internal combustion engine), however, does not have this challenge, and one million miles is considered feasible, as with today’s diesel engines.

The current and future market

Today, there are a significant number of manufacturers developing hydrogen-powered trucks, with some already in operation. The Hyundai Xcient Fuel Cell 34 rigid is said to be the largest selling fuel cell truck available today, with long haul articulated versions expected to launch in 2023. Hyzon has recently launched a range of hydrogen-powered trucks available up to 70 tonnes; Nikola is due to launch this year; while Volvo and Daimler aim to launch long-haul trucks for 2027.

A study by The International Council on Clean Transport estimated that by 2025, a battery-electric truck will cost 1.9 times that of a diesel truck, and a hydrogen fuel cell truck will cost 2.5 times that of a diesel truck⁴. EV’s will generally have a lower TCO, except in cases where batteries limit range, uptime, or load capacity. In these cases, should a refuelling network be available, hydrogen trucks could be a more viable decarbonisation option. A TCO review would need to be completed for a operators to compare the suitability of the technologies against its operations.

Future commercial vehicles are expected to include a mix of powertrain solutions, including hydrogen ICE, fuel cell and full electric. Medium-duty trucks, especially those in urban or mixed routes, are likely to be dominated by EV solutions, whereas long-distance heavy-duty trucks are expected to favour hydrogen solutions. In light-duty vehicle applications, battery-electric is likely to be by far the dominant decarbonised solution in most major markets, although hydrogen or e-fuel solutions remain a possibility for larger, high utilisation vehicles and specialist high performance or towing applications.

With forthcoming bans on non-zero-emissions propulsion, starting with smaller vehicles, as well as shifts in consumer demands, manufacturers and operators face difficult decisions (and choosing to do nothing is still a decision) about the choice of powertrain to pursue for their future development and procurement. This is especially key for commercial vehicles, where investments are large, lifetimes and product lifecycles can be long, and uptime and availability are crucial. From our experience and insights that support those across the hydrogen and transport value chain, we plan to revise this report later in the year to reflect the sectors progress.