Automotive Fuel Cell Market by Component (Fuel Processor, Fuel Cell Stack, Power Conditioner, Air Compressor, Humidifier), Power Output, Hydrogen Fuel Stations, Vehicle Type (Passenger car, LCV, Truck, Bus), Operating Miles, Region – Global Forecast 2028

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The global automotive fuel cell market size is projected to grow from 20,168 units in 2021 to 596,225 units by 2028, at a CAGR of 62.2%. Factors such as growing demand for low emission commuting and governments supporting long-range, zero-emission vehicles through subsidies & tax rebates have compelled the manufacturers to provide fuel cell vehicles around the world. This has led to a growing demand for automotive fuel cells in the market.

Increasing investments by governments across the globe to develop hydrogen fuel infrastructure and incentives offered to buyers will create opportunities for OEMs to expand their revenue stream and geographical presence. The market in the Asia Pacific is projected to experience steady growth owing to the high demand for cost-efficient and low-emission vehicles, while the North American market is the fastest-growing market due to the government initiatives and growing high-performance Commercial vehicle segment. However, the low presence of hydrogen fueling stations, higher costs involved in initial investments, and performance constraints could hamper the growth of the global automotive fuel cell market.

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COVID-19 Impact On the Automotive Fuel Cell Market:

The production and sales of new vehicles had come to a halt across the globe as the whole ecosystem had been disrupted in the initial outbreak of COVID 19. OEMs had to wait until lockdowns were lifted to resume production, which affected their businesses. Hence, vehicle manufacturers had to adjust the production volume. Also, component manufacturing was suspended, and small Tier II and Tier III manufacturers faced liquidity issues. The automotive industry is highly capital-intensive and relies on frequent financing to continue operations. Thus, the production suspension during the initial months of the outbreak and lower demand had an unprecedented impact on FCEV manufacturers and automotive fuel cell producers.

Due to the COVID-19 pandemic, many countries had imposed a complete lockdown of more than two months, which, in turn, has impacted vehicle production. Manufacturing units around the world were shut down, and vehicle sales have taken a huge hit. However, the majority of the automakers resumed vehicle production with limited production and necessary measures. Conditions improved in the latter months, but overall FCEV manufacturers did not suffer much as demand for zero-emission vehicles increased during the latter months of 2020. This led to an overall increase in demand for automotive fuel cells in the market.

Although most OEMs did not report any major losses, there were few OEMs, which suffered from the outbreak. For instance, Honda’s sales went down by more than 15% during the third quarter of 2020, while operating profit fell by around 13% overall during the whole year. The combined annual sales of Japanese automakers fell by around 7.3%. Toyota’s sales went down by 50% in the first quarter of 2020. However, demand for its vehicles recovered at a fast rate after the initial months of 2020. Its FCEV sales also increased along with the demand for zero-emission vehicles during the latter months of 2020. The company had worked on developing better fuel cells for its new Mirai FCEV and for sale to other OEM’s as part of its 2050 environmental vision.

Market Dynamics:

Driver: Better fuel economy and increased driving range

FCEVs offer better fuel economy than ICE vehicles. The fuel economy of an FCEV is around 63 miles per gallon gasoline equivalent (MPGge), while that of an ICE vehicle is 29 MPGge on highways. Hybridization can improve the fuel economy of an FCEV by up to 3.2%. On urban roads, the fuel economy of an FCEV is around 55 MPGge as compared to 20 MPGge for ICE vehicles. There is a significant difference in the driving range of FCEVs and BEVs on either full tank or full charge. FCEVs can travel almost 300 miles without refueling. The average range of a BEV is around 110 miles with a fully charged battery. Honda Clarity has the highest EPA driving rating for any zero-emission vehicle in the US. It has a driving range of up to 366 miles. Hence, better fuel efficiency and increased driving range will boost the demand for FCEVs, which will, in turn, drive the automotive fuel cell market.

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