However, compared to battery electric vehicles (BEVs), the number of hydrogen fuel cell electric vehicles (FCEVs) on the road today is negligible – so where is this approach suitable for FCEVs?
The allure of BEVs
The automotive industry is undergoing a radical and disruptive transformation. For years, the industry has been on the defensive, not at the forefront, in dealing with CO2 emissions, government sanctions, and social criticism. However, the industry has begun to take proactive steps to regain control of its destiny. Coupled with the success of new competitors like Tesla, established automakers have restructured their product portfolios and brought more environmentally friendly vehicles to market. Electric vehicles define this shift and are a crucial component in securing the industry's future. This is because electric vehicles are the most logical and effective way to decarbonize.
In the coming years, the automotive industry will continue to focus on battery electric vehicles (BEVs) to meet European CO2 targets, avoid fines, and contend with competition from abroad. However, fuel cell technology holds promise for the future.
Automotive giants have already made public commitments to battery electric vehicles (BEVs). For example, Volkswagen Group CEO Herbert Diess stated that there is no more obvious option than electric vehicles in the foreseeable future, explaining that electric vehicles are a crucial component of the group's CO2 strategy. This appears to be the future in sight. Focusing on electric vehicles means supplementing the existing ICE (electric vehicle, ICE, ICE) portfolio in the short term and completely replacing them in the long term. Therefore, it requires automakers to invest heavily in technology and marketing initiatives to shift consumer interest.
Why are electric vehicles able to move forward?
In the 1990s, European automakers conducted in-depth studies on the feasibility of vehicles that did not rely on fossil fuels, initially investigating battery electric vehicles (BEVs) and fuel cell electric vehicles (FCEVs). Mercedes-Benz unveiled the first fuel cell prototype, NECAR1, in 1994. However, despite the development of several prototypes and other small-scale FCEV demonstrations, no manufacturer was able to put FCEVs into mass production. BEVs then gained increasing attention because the technology was better suited for mass production, thus accelerating production and ensuring faster and easier compliance with increasingly stringent CO2 regulations. Compared to FCEVs, battery electric vehicles were more cost-effective, enabling automakers to meet emissions targets and achieve profitability.
The natural consequence is that automakers have prioritized battery development over fuel cells. Fuel cell electric vehicles (FCEVs) generate electricity using hydrogen-powered fuel cells, rather than simply drawing power from batteries. Therefore, for FCEVs to function, they require both hydrogen supply facilities and refueling stations. This presents the automotive industry with a dilemma: without sufficient infrastructure, FCEVs may not be suitable for mass market adoption, no matter how clean, quiet, and efficient they are.
All electric vehicles require comprehensive infrastructure to succeed.
To create value, it's crucial not only to create tools that exceed expectations, but also to create an ecosystem that unlocks their full potential. The most vital part of this ecosystem is the functional infrastructure that ensures customers can access their vehicles anytime, anywhere. Remember, range anxiety and charging anxiety are the two biggest concerns for consumers using electric vehicles—after all, what's the point of a car that can't be driven?
Despite the development of some prototypes and other small-scale FCEV demonstrations, no manufacturer has been able to put FCEVs into mass production.
Refueling FCEVs may be easier to manage: it takes only a few minutes compared to traditional refueling. In the same period, hydrogen refueling stations can handle four times more electric vehicles than charging stations. So why are they so rare? Even in Germany, a leading hydrogen producer in Europe, there are only 82 operational hydrogen refueling stations. In contrast, there are 24,000 BEV charging points, 15% of which are fast-charging points. According to research by Capgemini, the same is true across Europe, where an estimated 144,000 charging points are compared to only 125 hydrogen refueling stations—a more significant indicator of the progress in BEV adoption and investment.
The reason boils down to cost. The automotive industry faces a unique set of challenges that must be addressed strategically. After all, innovating the product portfolio, meeting evolving regulations, and convincing consumers that electric vehicles are as good (if not better) than internal combustion engine vehicles is no easy feat.
When discussing the costs of BEV and FCEV infrastructure, it becomes clear why BEV investment has jumped so far. At today's prices, a single hydrogen refueling station costs over €1 million (US$1.1 million). In contrast, Capgemini research found that four 150kW charging points could be built for a total cost of €596,000. Beyond the significant cost difference, BEVs remain a viable option because they can rely on existing power grids, unlike FCEVs, for which there is no hydrogen distribution network available to support a large number of FCEVs on the road.
Electric vehicles will advance for at least the next decade.
This is why Volkswagen will maintain its leading market share in BEVs for the foreseeable future. Volkswagen has announced plans to launch 75 new BEV models by 2029, and to achieve this ambition, it will need to conduct research and development in other areas. Volkswagen has stopped funding fuel cell research based on the assumption that fuel cell vehicles will not be mass-produced within the next decade, but other automakers have not yet cut back. For example, Audi and BMW continue to produce smaller series or prototype FCEVs, but like Volkswagen, most of their R&D spending is allocated to the most likely resource: the battery-powered electrification of their fleets.
FCEVs will remain on automakers' radar, but business and product strategies will focus on BEV technology. Global sales figures for both BEVs and FCEVs support this. In 2015, only about 335,000 BEVs were sold, jumping to over 1,700 in 2019, representing an average annual growth rate of approximately 50%. In contrast, only about 18,500 FCEVs were sold between 2015 and 2019.
The Possibilities of Tomorrow
In the coming years, the automotive industry will continue to focus on battery electric vehicles (BEVs) to meet European CO2 targets, avoid fines, and contend with competition from abroad. However, fuel cell technology holds promise for the future, particularly in areas involving long distances and heavy loads, thanks to improvements in hydrogen supply mechanisms and refueling infrastructure. Startups such as Nikola Motors, as well as manufacturers like Bosch and Iveco, are already experimenting with hydrogen-powered trucks and focusing on these use cases.
There are still obstacles to overcome, but the automotive industry doesn't necessarily have to solve them alone. For example, hydrogen can be used as a synthetic fuel in internal combustion engines, trains, or airplanes, and the chemical and steel industries use hydrogen in many processes, thus incentivizing these industries to collaborate and drive further innovation and investment. These other industries and use cases could drive and establish green hydrogen as a carbon dioxide-free alternative energy source. This would enable the continued development of fuel cell technology, thereby increasing its efficiency to a level suitable for large-scale production.
As the FCEV era approaches, the remaining question is whether the automotive industry will adapt to its product portfolio – but this is a question they shouldn't wait to start thinking about.
