Major Challenges in Hydrogen Vehicles

High Cost  

• High Manufacturing Costs: Fuel cell technology and hydrogen storage tanks are expensive to produce due to complex engineering and specialized materials. This translates to high upfront costs for hydrogen vehicles compared to gasoline or even electric vehicles. 

• Cost of Refueling: The cost of hydrogen is very high falling at around $36/kg (at top stations in California) and for example the Toyota Mirai holds 5.6 kg of hydrogen so total cost to fill a tank is around $200 

• Limited Economies of Scale: Compared to traditional gasoline or electric vehicles, hydrogen vehicle production volumes are much lower. This makes it difficult for manufacturers to achieve economies of scale and bring down manufacturing costs. 

Infrastructure 

• Scarcity of Hydrogen Refueling Stations: The lack of readily available hydrogen refueling stations creates a major barrier for consumers. Long distances between stations and lengthy refueling times compared to gasoline are significant drawbacks. 

• High Infrastructure Investment: Building a widespread hydrogen refueling network requires significant investment in infrastructure development, storage facilities, and transportation logistics. 

• Green vs Grey vs Blue Hydrogen: The three possibilities for hydrogen fueling stations are SMR (grey hydrogen), electrolyzers (green hydrogen), and SMR with carbon capture (blue hydrogen). The system being used by the majority of refueling stations right now is SMR (steam methane reformation)  which is a way to source hydrogen from the natural gas methane, and while this is the cheapest method to produce hydrogen and is still better for the environment than ICE it still does release carbon dioxide into the environment. The environmentally ideal option would be electrolyzers, but the technology is still very expensive and needs a bit more investment. We asked a partner at Element One what the cost of hydrogen from an electrolyzer is currently and he responded “It depends on the cost of electricity, of course, but generally, if it's about 10 cents per kilowatt hour just to produce the hydrogen, it’s going to be about $5 per kilogram. Then there are additional costs associated with transportation and things like that, and so ways to get the price down, perhaps would be a green hydrogen solar system. Let's say, for an example, that we can amortize that cost over a long period of time, and then we could also get the $3 per kilogram subsidy from the government that we can drive the cost of the hydrogen much lower than that. And so that's kind of what we're somewhat focused on is, how do we get the cost of the hydrogen down so that it can be competitive with SMR?”  

Technical Challenges 

• Fuel Cell Durability: While fuel cells have improved, their long-term durability and performance over extended use cycles need further advancement. 

• Hydrogen Storage: Storing enough hydrogen onboard a vehicle for a practical driving range remains a challenge due to the low energy density of hydrogen gas. This can limit the usability of hydrogen vehicles for long-distance travel. 

Competition 

• Advancements in Battery Electric Vehicles (BEVs): The rapid progress in battery technology and falling battery costs make BEVs a strong competitor in the zero-emission vehicle market. BEVs currently offer lower upfront costs compared to hydrogen vehicles, and more existing infrastucture for refueling. While hydrogen vehicles can be refueled in about 3-5 minutes, similar to gasoline cars, which is significantly faster than charging BEVs, BEV charging infrastructure is rapidly expanding, with a much larger network of public and private charging stations compared to hydrogen refueling stations. 

• Energy efficiency: FCEVs have a longer driving range (exceeding 300 miles on a single tank) compared with BEVs, but BEVs are still more energy-efficient on a well to wheel basis as electricity can be directly used to charge the battery with minimal energy loss. 

Other Challenges:

• Consumer Perception: Hydrogen vehicles are a relatively new technology, and consumer awareness and understanding of their benefits and limitations need to improve. 

• Government Incentives: Government support and incentives for hydrogen vehicle development, infrastructure build-out, and consumer adoption can significantly impact market growth.