Hydrogen-powered vehicles hit the fast lane as automakers launch a "battle for positioning."

Since October 2022, positive news about hydrogen fuel cell vehicles has been pouring in. Hydrogen fuel cell cars are now being intensively deployed across five major demonstration city clusters: Beijing-Tianjin-Hebei, Shanghai, Guangdong, Hebei, and Henan. Notably, Daxing District in Beijing plans to roll out no fewer than 3,000 hydrogen fuel cell vehicles by 2025, alongside the construction of at least 10 hydrogen refueling stations. Meanwhile, Shanghai will gradually introduce hydrogen-powered buses in Jiading, Fengxian, Lingang, and Jinshan districts. Prior to this, the first batch of 80 hydrogen fuel cell ride-hailing vehicles has officially entered the commercial operation phase. Meanwhile, the hydrogen fuel cell vehicle market is already bustling with automakers eager to gain a competitive edge, as a fierce "positioning battle" over this emerging technology rapidly unfolds.
Toyota Motor Corporation's fuel cell R&D and production project has officially begun construction in Beijing's Economic-Technological Development Area, with 50 limited-edition second-generation Toyota MIRAI vehicles—featuring advanced specs and competitive pricing—set to roll out via GAC Toyota channels before the end of this year. Meanwhile, Hyundai Motor announced that its first China-made Hyundai NEXO model compliant with Chinese regulations is scheduled to make a formal entry into the Chinese market within the year. Additionally, Changan Automobile's Changan Deepal SL03 hydrogen-electric version has become China's first mass-produced hydrogen fuel-cell vehicle; though the model is now officially available, it’s currently accepting only corporate orders at this stage.

A Changan Shenlan sales representative revealed to Tanke Shenke Technology that the Changan Shenlan SL03 hydrogen-electric version will begin mass deliveries before the end of the year. Changan Automobile will also launch two or three hydrogen fuel cell passenger vehicles within the next five years. Furthermore, automakers such as GAC Group, SAIC Motor, Haima Motors, and Great Wall Motors have all made varying degrees of progress in the hydrogen fuel cell vehicle sector. Despite the growing popularity of hydrogen fuel cell vehicles, a heated debate remains: can hydrogen fuel cell vehicles compete with pure electric and hybrid models? Supporters believe that hydrogen fuel cell vehicles are crucial for improving the energy structure, developing low-carbon transportation, and enhancing international competitiveness, and represent a crucial frontier for the automotive industry. Opponents, on the other hand, maintain that the hydrogen fuel cell vehicle supply chain is not yet fully developed, lacking market conditions, and facing difficulties in achieving economies of scale, posing significant uncertainties. However, one thing is certain: the development of hydrogen fuel cell vehicles is an inevitable trend. According to the "Energy-Saving and New Energy Vehicle Technology Roadmap 2.0" compiled by the China Society of Automotive Engineers, development goals include a roughly 15-fold increase in hydrogen fuel cell vehicles during the 14th Five-Year Plan period, and a target of 1 million fuel cell vehicles between 2030 and 2035. In other words, the hydrogen fuel cell vehicle market has room for a hundredfold growth over the next decade or so. "In previous years, key components and materials for hydrogen fuel cell vehicles were mostly imported, but now some parts are largely domestically produced. As the promotional effects of the five demonstration city clusters gradually emerge, the delivery and operation of hydrogen fuel cell vehicles in China will enter a period of rapid growth. All signs indicate that the hydrogen fuel cell vehicle market is on the verge of an explosion," Zhou Yuhui, a hydrogen energy industry observer, told Tanke Shenke Technology.

Automotive industry expert Wang Yinhai clearly senses that a new trend in hydrogen fuel cell vehicles is brewing, primarily driven by two factors: rapid year-on-year growth in production and sales, and clear policy guidance. According to statistics from the China Association of Automobile Manufacturers, from January to September 2022, the production and sales of fuel cell vehicles reached 2,374 and 2,092 units, respectively, representing year-on-year increases of 170.7% and 130.7%, respectively, demonstrating a significant acceleration in development. "Despite year-on-year growth of over 100% in both production and sales from January to September, by the end of 2021, the national hydrogen fuel cell vehicle fleet was less than 9,000, while the fleet of pure electric vehicles reached 6.4 million. The development of hydrogen fuel cell vehicles requires concerted efforts at multiple levels," Wang Yinhai told Tanke Shenke. "However, the overall development trend remains positive." Zhou Yuhui admitted, "The development of hydrogen fuel cell vehicles is heavily dependent on supportive policies from national and local governments. If top-level design remains absent, even with the opportunity of energy transition, large-scale development of hydrogen fuel cell vehicles will be difficult."

From 2020 to 2021, a series of supportive policies were introduced, including those aimed at building a hydrogen fuel cell vehicle industry chain, conducting demonstrations of new technologies and models, and accelerating the construction of hydrogen refueling stations. However, the most milestone policy was not introduced until March 2022 - the National Development and Reform Commission and the National Energy Administration jointly issued the "Medium- and Long-Term Plan for the Development of the Hydrogen Energy Industry (2021-2035)", which clearly stated that hydrogen energy is an integral part of the future national energy system and a key development direction. It is also the first time that the energy attributes of hydrogen energy have been clarified at the national level.

Meanwhile, local governments are also intensively rolling out plans to develop the hydrogen energy industry. Beijing, Shanghai, Jiangxi Province, Jilin Province, Guangdong Province, and others have all announced industry policies or subsidy programs related to hydrogen energy. Currently, the hydrogen fuel cell vehicle market is poised for a rapid surge. According to forecasts by the International Energy Agency, from 2021 to 2030, the annual compound growth rate of hydrogen fuel cell vehicle ownership will reach 81.32%–89.34%, with global stock expected to climb to 10.5 million to 15.5 million vehicles by 2030. "While clear policy guidance is certainly crucial, at present, the development of hydrogen fuel cell vehicles still largely relies on government financial subsidies, making it difficult to ensure long-term sustainability. Moreover, this dependency also means the industry cannot achieve a self-sustaining cycle or full-scale implementation," Wang Yinhai candidly admitted.
He believes that the ultimate size of the market share Chinese hydrogen fuel cell vehicle manufacturers can capture—and whether they can sustain their momentum in the new-energy vehicle sector—will hinge on how the industry shifts from being subsidy-driven to market-driven, ultimately focusing on enhancing infrastructure, strengthening the industrial chain, and advancing core technologies. In short, the top-down approach needs to evolve swiftly into a collaborative, bottom-up model. Although the road ahead remains challenging, it’s encouraging that hydrogen fuel cell vehicles have finally taken a substantive step forward: at this stage, hydrogen fuel cell heavy-duty trucks are already stepping up as the key drivers behind the commercialization and real-world deployment of these vehicles.
According to the technological roadmap, hydrogen fuel cell heavy-duty trucks, pure electric heavy-duty trucks (including both charging and battery-swap models), and hybrid heavy-duty trucks all fall under the broad category of new-energy heavy-duty trucks. Among these, hydrogen fuel cell heavy-duty trucks stand out due to their zero-carbon emissions, high efficiency, short refueling time, extended driving range, and ability to operate reliably even in extremely cold environments. Data from the First Commercial Vehicle Network show that in September 2022, sales of hydrogen fuel cell heavy-duty trucks surged by an impressive 1,188% year-on-year, reaching 219 units. From January to September 2022, cumulative sales of hydrogen fuel cell heavy-duty trucks totaled 1,056 units, representing a remarkable 160% increase compared to the same period last year. However, it’s important to note that the overall scale of hydrogen fuel cell heavy-duty trucks remains relatively small. In the first nine months of 2022, their sales accounted for just 6.92% of total new-energy heavy-duty truck sales. Nevertheless, since the second half of 2022, large-scale orders for hydrogen fuel cell heavy-duty trucks have been pouring in one after another.
On July 22, Grove Hydrogen Vehicles, Inner Mongolia Zhongji Hydrogen Energy, and Huadian Inner Mongolia New Energy, along with Tehong Coal Group, signed a cooperation framework agreement to procure and deploy 500 hydrogen fuel cell heavy-duty trucks over the next three years. They also inked a similar framework deal with Inner Mongolia Menghuitong to jointly promote 5,000 hydrogen fuel cell heavy-duty trucks within the next five years. On September 1, Weichai Power and China National Heavy Duty Truck Group separately secured orders totaling 1,100 hydrogen fuel cell heavy-duty trucks from customers including Qingdao Shengtonghua, Zibo Zhanhong Automobile, and Tongxin Zhixing Logistics. According to incomplete statistics, as of September 1, excluding orders that have already been converted into actual sales, the total number of publicly announced agreements for purchasing hydrogen fuel cell heavy-duty trucks has surpassed 10,000 units.
In fact, it’s no coincidence that hydrogen fuel cell heavy-duty trucks have been consistently securing large-scale orders. First, these trucks follow relatively fixed routes and operate within well-defined ranges, eliminating the need for a widely dispersed network of hydrogen refueling stations—thus reducing investment costs in this area. Second, refueling a hydrogen fuel cell truck typically takes just 3 to 5 minutes, while its driving range is comparable to that of conventional diesel-powered heavy-duty vehicles. Finally, according to the demonstration targets set for fuel cell vehicle clusters and the corresponding credit evaluation system, each hydrogen-powered heavy-duty truck with a power output exceeding 110 kW can qualify for a subsidy of 462,000 yuan, which significantly eases the upfront purchase cost and, in turn, boosts buyers’ enthusiasm to adopt this technology.
In Wang Yinhai's view, drawing from the development trajectory of new-energy vehicles, it makes sense for hydrogen fuel-cell electric vehicles to first target commercial vehicle segments like heavy-duty trucks and buses, before gradually expanding into the passenger-car market. The recent surge in substantial orders for hydrogen fuel-cell-powered heavy-duty trucks signifies that their commercialization process is gaining further momentum—and could potentially achieve full-scale market adoption within the next 5 to 10 years. "From a technological development perspective," Wang Yinhai explained to 'Tanke Deep Tech,' "there’s still significant room for cost reduction in hydrogen fuel-cell heavy-duty trucks. For instance, improving efficiency in the hydrogen production phase could slash costs by up to 10%, while innovative technologies aimed at lowering expenses in storage, transportation, and refueling are also emerging rapidly. As a result, in the near future, the total operating costs of hydrogen fuel-cell heavy-duty trucks are expected to outperform those of pure-electric counterparts."
However, although the commercial vehicle market serves as the pivotal point for driving the hydrogen fuel cell vehicle industry, its market size remains extremely limited, making it difficult to achieve economies of scale. Therefore, hydrogen fuel cell vehicles will inevitably need to expand into the passenger car segment. According to estimates by the China Hydrogen Energy Alliance, by 2050, the market penetration rates for hydrogen fuel cell-powered buses, logistics vehicles, heavy-duty trucks, and passenger cars are expected to reach 40%, 10%, 75%, and 12%, respectively. Compared to new-energy vehicles, hydrogen fuel cell cars indeed face numerous challenges in terms of widespread adoption and market expansion—chief among these being cost and technological barriers.
Unlike the new energy vehicle industry chain, the hydrogen fuel cell vehicle industry chain is longer and more complex. Its upstream segment encompasses hydrogen production, while the midstream includes hydrogen transportation, storage, and hydrogen refueling stations. Downstream activities involve both hydrogen fuel cell manufacturing and hydrogen fuel cell vehicle production—and each stage comes with significant costs. Among these, hydrogen production accounts for the highest expense, making up about 55% of the total cost. Based on production methods, hydrogen is typically categorized into gray hydrogen, blue hydrogen, and green hydrogen. Under current hydrogen-production technologies, green hydrogen costs roughly 1.5 to 1.8 yuan/Nm³ (the volume of gas at 0°C and 1 standard atmosphere), whereas gray hydrogen remains more affordable, costing around 0.7 to 0.8 yuan/Nm³. Due to its clear cost advantage, coupled with mature and straightforward operational practices, gray hydrogen currently accounts for over 95% of the total hydrogen output.
In the midstream of the industrial chain, the cost share for hydrogen transportation and storage accounts for approximately 30%, while hydrogen refueling stations make up about 15% of the total expenses. Due to hydrogen's highly reactive and strongly reducing chemical properties, it is primarily compressed into a high-pressure gaseous state for transport and storage via specialized vehicles. However, these vehicles have limited carrying capacity, leading to higher costs and lower efficiency, as well as restricting the ability to transport hydrogen over long distances or in large volumes. "The high-pressure gas compression method isn't perfect—ideally, hydrogen should be liquefied instead, which would significantly reduce costs by boosting transportation capacity," explained Zhou Yuhui to 'Tanke Deep Tech.' "Additionally, a more innovative approach would involve on-site hydrogen production and refueling, eliminating the need for both transportation and storage altogether. Yet, at this stage, subsidies remain the only practical way to offset these higher costs."

Additionally, the number of hydrogen refueling stations largely determines the pace at which hydrogen fuel cell vehicles gain widespread adoption. However, currently, high costs are severely limiting the expansion of such stations. Building a stationary 35 MPa (megapascal, a unit of pressure) hydrogen refueling station capable of dispensing an average of 500 kg of hydrogen per day costs around 12 million yuan, while larger-scale stations can even exceed 40 million yuan. In contrast, constructing a charging station of comparable size would cost less than one-tenth of that amount. Meanwhile, at the downstream end of the industry chain, the retail prices of hydrogen fuel cell vehicles have remained stubbornly high.
Take the Changan Deepal SL03 as an example—this model is available in three distinct versions: the pure-electric version, the range-extended version, and the hydrogen-electric version, priced at RMB 183,900–215,900, RMB 168,900, and RMB 699,900 respectively. Notably, the hydrogen-electric version commands a price nearly three times higher than the first two variants. Meanwhile, Toyota plans to introduce the second-generation Toyota MIRAI to the Chinese market, with its price soaring even higher—ranging from RMB 748,000 to RMB 751,000. Turning to commercial vehicles, consider hydrogen fuel cell heavy-duty trucks versus hydrogen fuel cell buses: their respective purchase costs fall between RMB 1.5 million and RMB 1.8 million, and RMB 2 million to RMB 3 million, respectively. By contrast, the purchase cost for a conventional diesel-powered heavy-duty truck typically ranges from RMB 200,000 to RMB 450,000, while a diesel-powered bus usually costs around RMB 300,000 to RMB 1 million.
Numerous factors have piled up, directly driving up the cost of vehicle operation. In a research report, Cinda Securities pointed out that the comprehensive cost for hydrogen fuel cell vehicles is 924 yuan per 100 kilometers, whereas gasoline cars cost 528 yuan per 100 kilometers, and electric vehicles only come in at 441 yuan per 100 kilometers. "According to industry estimates, hydrogen prices need to drop to between 30 and 40 yuan per kilogram to become competitively viable in the market. However, in reality, hydrogen prices typically remain as high as 80 to 100 yuan per kilogram—even after subsidies, they still exceed 50 yuan per kilogram," Zhou Yuhui revealed to 'Tanke Deep Tech.' "With technological advancements across various segments of the industry chain, we expect hydrogen prices to fall to 40 yuan per kilogram by 2025 and further down to 25 yuan per kilogram by 2030."
If we say that persistently high costs across all segments of the industrial chain are the direct reason why hydrogen fuel cell vehicles remain difficult to popularize, then the fundamental issue lies in the lack of core technologies. For instance, in the hydrogen production stage, PEM electrolyzers—their core equipment—account for nearly 50% of the total cost of a hydrogen-generation system. Yet, the manufacturers that truly master the core technology and have achieved large-scale production of PEM electrolyzers are predominantly from Europe and North America. Additionally, in the case of 35 MPa aluminum-lined, fully wrapped fiber-reinforced hydrogen storage tanks used specifically for hydrogen fuel cell vehicles, the high-end carbon fiber materials covering the tank’s exterior are largely dependent on suppliers from Japan and South Korea.
"Moreover, core components such as catalysts, proton exchange membranes, and carbon papers have not yet been fully localized. Until a stable supply system is established, it will be challenging to reduce costs across all segments of the industry chain. 'In the coming years, our primary goal is to lower costs at every stage of the industrial chain, with a key focus on achieving domestic substitution for critical technologies and core equipment,' said Zhou Yuhui. 'The industry widely predicts that 2030 could mark a pivotal turning point for the widespread adoption of hydrogen fuel cell vehicles. Although we’re still far from seeing these vehicles hit the road in significant numbers, the next wave of automotive energy transformation has already begun quietly.'"

Translated from Sina Auto

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