Date : May 02, 2022
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"Automotive fuel cell technology will become a viable solution for harmful tailpipe emissions, accounting for more than 21 Billion market size during the forecast period. – Bonafide Research "

Automotive fuel cells are electrochemical devices that convert chemical energy of fuels into electrical energy directly, promising power generation with high efficiency and low environmental impact. Automotive fuel cells are unique in terms of the variety of their potential applications; they use different types of fuels, such as hydrogen fuel and methanol fuel. Fuel cell vehicles are being developed in various countries because of promise to meet the requirements expected of automobiles in a market increasingly constrained by environmental and resource limitations. Through a combination of policies of various governments, technology advancement and industrial collaboration, fuel cell applications are now entering into a golden era of development. The demand for renewable energy is rapidly increasing across nations, with the vision of an inevitable and clean disruption. With the global shift to renewable energy, the characteristics of hydrogen make it a more core energy source for the future. In the last decade, hydrogen as a transportation fuel has gained a lot of traction due to its emission-free property. Hydrogen is a clean fuel that, when consumed in automotive fuel cells, it produces electricity, water, and heat. Hydrogen can be produced from a diversity of domestic resources, such as natural gas, biomass, and renewable energy like solar and wind. These calibers make it an appealing fuel option for transportation and electricity generation applications.

The diversity of fuel cells is in different stages of development. The most common classification of fuel cells is by the type of electrolyte used in the cells and includes proton exchange membrane fuel cell, direct methanol fuel cell, alkaline fuel cell and phosphoric acid fuel cell. Proton exchange membrane fuel cell is leading the market with more than 95% value share. Nowadays, PEM fuel cells are the best candidates for powering automobiles because they operate at relatively low temperatures and can quickly vary their output to meet shifting power demands. Fuel cell electric vehicles are basically powered by hydrogen or any alternative fuel (i.e., methanol). These vehicles are much more efficient than conventional vehicles. FCEVs do not produce any tailpipe emissions as they only emit water vapor and warm air (heat). Compared to internal combustion engines, FCEVs can be fueled in less than 4 minutes and have a driving range of over 300 miles.

According to the research report, "Global Automotive Fuel Cell Market Outlook, 2027" published by Bonafide Research, the automotive fuel cell market is expected to reach more than USD 21 Billion by 2027. It is expected to expand at a compound annual growth rate (CAGR) of more than 10% in 2022–2027. The rising environmental concerns and growing demand for clean electricity across the globe are expected to boost the demand for efficient, eco-friendly vehicles. Moreover, the Asia-Pacific region is estimated to be the largest and fastest growing economy in the automotive fuel cell market. The region holds more than 60% of the global automotive fuel cell market. By the end of 2020, overall fuel cell distribution across the region was valued at 22736 units. Among many developing countries, South Korea and Japan are expected to occupy a lion's share of the market in enhancing fuel cell electric vehicle technology, as Toyota and Hyundai-Kia claim to be global automotive leaders. In 2020, South Korea had 10093 units of fuel cell vehicles, China had 8443 units, and Japan was valued at 4200 units. According to the International Energy Agency, there were more than 14,000 fuel cell passenger cars present in the Asia-Pacific region in 2020. Also, the rising demands for electrical energy to sustain global development require constant heavy investments in energy-efficient and clean energy sources. This factor has helped the Asia-Pacific market for the fuel cell market's growth. Based on the countries, China is anticipated to lead the Asia-Pacific market during the forecast period.

Fuel cell vehicles have become a viable part of China’s strategy to develop innovative energy vehicles to reduce pollution. According to the International Trade Administration, in late 2020, China's state council announced that the country is aiming to focus on building the fuel-cell supply chain and developing hydrogen-powered commercial vehicles. The goal is to increase FCV penetration to 1,00,000 vehicles by 2025 and to 10,00,000 vehicles by 2035. In addition to that, with the hydrogen fuel cell strategy, China is aiming to establish itself as a powerhouse for hydrogen production by the end of the next decade. The country is also focusing on producing 2,00,000 tones of green hydrogen annually by 2025. In addition to that, growing hydrogen infrastructure across the region has boosted the market growth for this segment. The total number of hydrogen refueling stations in Japan and China is 211, and these countries are in absolute leading positions for hydrogen energy development.

Further, for the North America, the encouraging government policies and mandates to reduce harmful carbon emissions will increase the demand for an efficient transportation system. Demands for fuel cells in North America are attributed to diverse factors such as higher purchasing power, better transportation infrastructure, technological advancements, and easy access to hydrogen fuelling stations. In addition to that, governments in many developing countries are encouraging their citizens to adopt such vehicles that operate on alternate energy. According to an International Energy Agency analysis, in North America, the distribution of fuel cell vehicles was 9380 units at the end of 2020. Increasing investments from the private and public sectors in supplying efficient energy and deploying clean electricity across the region is expected to boost the demand for fuel cells in North America. Also, by the end of 2020, the distribution of fuel cell electric vehicle passenger cars across the North American region was calculated to be 9316 units. As for the global automotive fuel cell market, the North American region contributes more than 25% of the market share. Rapid urbanization and industrialization, along with the expansion of fuel cell networks across the region, will propel the market's growth. In addition to that, consumer focus towards the adoption of clear power solutions is anticipated to create higher demand for fuel cells in North America.

According to International Energy Agency analysis, at the end of 2020, the USA had 9252 fuel cell vehicles present across the country, whereas Canada accounted for the remaining 128 vehicles. Further, according to the US Department of Energy, ARPA-E granted more than USD 35 million for the optimization of ion-conducting solids. This program has introduced 16 new projects that are working to overcome the limitations of conventional fuel cell technology. Also, the USA is aiming for a nationwide 100% clean energy economy with net-zero emissions by 2050. Also, the California Fuel Cell Partnership in the USA is pursuing an HRS infrastructure with the vision of 1,000 stations and a million fuel cell electric vehicles by 2030. On the other hand, in December 2020, Canada revealed a long-term vision for operating more than 5 million fuel cell electric vehicles across the country by 2050 as part of the Hydrogen Strategy for Canada. Also, Canada has set targets for the share of eco-friendly vehicles, including battery electric vehicles, hybrid vehicles, and fuel cell electric vehicles.

On the other hand, the European Union (EU) has played an important role in the production and development of hydrogen and fuel cell technology. Over the past decade, funding opportunities and EU initiatives have majorly contributed to the emerging market for hydrogen across diverse sectors. For instance, in March 2018, the EU introduced a five-year-duration project to replace backup diesel generators with hydrogen fuel cells across Europe. The EVERYWH2ERE project brought twelve European countries together to develop fuel cells for temporary and easily portable power for the urban environment. In addition to that, the European Alternative Fuels Observatory (EAFO) is the European Commission’s key reference portal for alternative fuels, infrastructure, and vehicles. The green data adopted by the commission sets a clear objective that by 2050, transport emissions will have to be reduced by 90%. The distribution of all fuel vehicles on the European continent was estimated to be 2677 units by the end of 2020. Across the European region, Germany contributed to 1083 fuel cell vehicles, the UK had 193 units, France had 396 vehicles, the Netherlands had 342 units, and Norway accounted for 164 units by the end of 2020. On the other hand, the total distribution of passenger vehicles was calculated to be 2465 units in 2020. From this data, Germany participated with 1016 vehicles, France had 375 units, and the UK had 168 vehicles, whereas the Netherlands and Norway accounted for more than 470 units.

The European region has witnessed an upscale deployment of fuel cell based systems in various sectors, in which the transportation sector (from cars, trucks, and heavy duty vehicles) accounts for a larger portion. In addition to that, projections from the data obtained indicate that the number of fuel cell vehicles in the European region will exceed four million units by 2027.

Germany holds the largest market share in 2021 across the Europe region. Also in the same year, Germany held the highest share in the number of FCEVs (fuel cell electric vehicles) registered. The German government has come up with concrete plans to transform the country into a hydrogen-based economy in the coming years. The Federal Ministry of Economics and the Federal Ministry of Transport, both of which are present in the country, have announced plans to invest more than USD 8 billion in the development of new large-scale hydrogen products. By 2021, Europe had 228 hydrogen stations, 101 of which are in Germany. France is second with 41 operating stations; the UK has 19 stations, Switzerland with 12 and the Netherlands with 11 stations. In addition to that, BMW (one of the several major automotive firms) has started European road tests for hydrogen-fueled cars to explore the potential for hydrogen.

The fuel cell market in South America is emerging and developing at a significant pace, and it is projected to flourish with moderate growth during the forecast period. As for the Middle East and Africa, the market is witnessing prominent market growth due to increasing investments in the development of hydrogen infrastructure across the region. Also, the growing demand for alternative energy sources and efficient and clean technologies for transportation in emerging economies is expected to drive the need for fuel cells. The active participation of both government and private organizations in the research, development, production, and implementation of fuel cells across diverse industrial sectors is credited with the growth of the technology. The momentum of low-carbon hydrogen is growing across the region, with many countries currently developing long-term hydrogen strategies and a project pipeline of more than 25 initiatives. These factors are expected to drive the market growth for South America, the Middle East, and Africa's automotive fuel cell markets.

The Middle East and Africa are anticipated to lead the market with more than 70% of the market share during the forecast period. The automotive fuel cell market in the United Arab Emirates (UAE) is growing rapidly due to increasing research on the utilization of hydrogen as an alternative fuel. The country is aiming to transform the transport sector into a hydrogen-fueled industry. While Turkey is witnessing various government-funded projects to spread awareness about fuel cell technology, In addition to that, government initiatives such as research grants and subsidies are propelling the market growth in the South African fuel cell market. However, the market is in an emerging phase in Saudi Arabia and has the potential to use fuel cells in transportation, domestic and industrial sectors.

Furthermore, in the South American automotive fuel cell market, Brazil is the major consumer of fuel cells owing to its progressive automotive industry. Due to the vast geographical area, Brazil is exploring the use of fuel cells in power generation plants. In addition to that, growing demand for hydrogen-powered vehicles (hydrogen fuel cell buses and other local transportation vehicles) has accelerated the market growth in Brazil. Other developing economies such as Argentina and Columbia are in the initial phase of the automotive fuel cell market and they are expected to witness higher market growth during the forecast period. The market is segmented into two types based on the fuel type: hydrogen fuel and methanol fuel. The hydrogen fuel segment is projected to lead the market with more than 95% market share during the forecast period. The efficient factors of hydrogen-based fuel cells and lower carbon emissions are driving the demand for hydrogen fuel cells across the region.

The factors restraining the growth of automotive fuel cell are highly flammability and hard to leakage detection of hydrogen. Also, rising demand for battery electric vehicles and hybrid electric vehicles, insufficient hydrogen infrastructure and high hydrogen powered vehicle cost are challenges for the growth of automotive fuel cell market. The automotive fuel cell market is dominated by a few global players and comprises several regional players. Some of the key manufacturers operating in the market are Ballard Power System (Canada), ITM Power (UK), Plug Power (US), Delphi Technologies (UK), Doosan Corporation (Japan), Hydrogenics (Canada) and Proton Power System PLC (UK) including others. Some of the major developments in fuel cell industry by these market players are listed below:

• In November 2021, Ballard Power Systems has received orders for a total of 40 FCmoveTM-HD (70kW) modules for planned deployment in hydrogen fuel cell electric buses (“FCEB”) across Europe in 2022. These FCEBs are being deployed in France, Germany, and the UK. Rouen, France is deploying their first fleet of zero-emission FCEBs powered by Ballard fuel cell technology, and Pau, France is expanding their existing Ballard powered FCEB fleet. There are now four French cities with Ballard fuel cell buses in service or development.

• On May 2020, UK-based hydrogen energy equipment manufacturer ITM Power announced the formation of the H2OzBus Project and the signing of an MoU with strategic partners, which includes Transit Systems, part of the SeaLink Travel Group, Ballard Power Systems, BOC Limited, Palisade Investment Partners and ITM Power. The consortium will be evaluating and demonstrating the concept of hydrogen fuel cell electric buses for use in public bus transport in Australia.

• On October 2021 Plug Power Inc., a provider of turnkey hydrogen solutions for the global green hydrogen economy, unveiled the HYVIA hydrogen ‘Renault Master Van H2-TECH prototype’ at the 2021 Plug Power Symposium, the first time the new hydrogen fuel cell powered van is being shown in North America.

• December 2021 Groupe Renault, top automotive player, and Plug Power Inc. provider of fuel cell systems and hydrogen related services has done the signature of a ‘Memorandum Of Understanding (MOU)’ to launch a 50-50 joint-venture based in France by the end of the first half of 2021. This strategic JV will position Groupe Renault and Plug Power to become key players in Europe in the research and development (R&D), transformation, manufacturing and sale of fuel cell-powered vehicles and hydrogen turn-key solutions in the coming years. This joint-venture platform will serve the fast-growing market of fuel cell light commercial vehicles, taxis, and commercial people transportation.

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"Automotive fuel cell technology will become a viable solution for harmful tailpipe emissions, accounting for more than 21 Billion market size during the forecast period. – Bonafide Research "

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