What is stifling FCEV growth in the Passenger Car sector?

What does the future hold for fuel cell electric vehicles in the US? And what is preventing hydrogen technology from competing with BEVs?

Matt Lucki, Senior Analyst, Powertrain & Hybrid/EV, Americas

16 November 2021

The past year has seen unprecedented announcements from all major automakers pledging substantial investments towards electrifying their portfolios, with battery electric vehicles (BEVs) taking centre stage. Tesla’s growth and exponential stock increase gave notice to traditional automakers, along with political agendas to lower pollution levels in the transportation sector, in the fight against environmental climate change. But what does the future hold for fuel cell electric vehicles (FCEVs) in the US? And what is preventing hydrogen technology from competing with the expanding BEV sector?

Very little news seems to be released on this alternative fuel, other than blanket statements from a handful of OEMs who are continuously researching and developing the technology for Passenger Vehicle application. The Commercial Transportation sector has found mild success – hydrogen-powered Buses, as well as Medium- and Heavy-Duty Trucks all exist today. And for air mobility solutions (air taxis) to come to fruition, they would need to be fuel cells, given the heavy weight of batteries. 

But in the Passenger Car market, FCEVs are still in the concept phase. Since 2006, cumulative US FCEV sales have reached 12,000 units. To put that into perspective, sales of the Tesla Model Y in the US are averaging 12,000 units per month this year alone.

Sales are being stifled by the limited number of hydrogen refuelling stations. Currently, there are 48 stations in the US, with all but one located in California. Unsurprisingly, the vast majority are clustered around Los Angeles and San Francisco. In contrast, there are over 40,000 Level 2 Chargers and over 5,500 Level 3 DC Fast Chargers for BEVs nationwide.

So, what is behind this discrepancy? As is so often the case, it all boils down to cost. According to the US Department of Energy, the median capital cost for a new hydrogen refuelling station is US$1.9 million. And their construction requires a raft of permits, safety codes and standards, given the highly flammable and explosive nature of hydrogen. Conversely, the cost for a single DC Fast Charger port can range up to US$50,000 and site installation is far less complex.

President Biden’s recently passed infrastructure bill budgets US$7.5 billion (slashed from US$15 billion originally) for EV charging infrastructure. It is estimated that US$5 billion will go to BEV charging, with the balance going to alternative fuels like hydrogen. This puts the maximum number of hydrogen stations at nearly 1,300 – a fraction of the president’s 500,000 EV charger goal.

The ultimate aim is to, one day, turn to zero-emission FCEVs as a viable alternative to gasoline. But with the vast majority of investments going towards battery technology and infrastructure, the long road to achieving that target appears to be getting progressively longer. Confidence in hydrogen remains low for the Passenger Car segment, but, on the plus side, ongoing development in this technology will continue to benefit other sectors.