The automotive industry is undergoing a profound transformation, driven by the urgent need for sustainable and eco-friendly transportation solutions. Hydrogen vehicles have emerged as a promising contender in this landscape, offering zero-emission alternatives that address environmental concerns. Lucintel interviewed over 30 key players to get their insights.
In the hydrogen supply chain, there are more than 1,000 companies worldwide. The major players of hydrogen vehicle are Toyota Motor Corporation, Hyundai Motor Company, Honda Motor Co. Ltd., Daimler AG., Audi, BMW, General Motors, MAN, Ford Motor Company, Nikola, and VOLVO. Dupont, Arkema, Toray are some of the raw material suppliers for hydrogen vehicle components. Ballard Power Systems, Robert Bosch GmbH, Worthington Industries Inc, Hexagon Composites ASA are some the major part fabricators for hydrogen vehicles.
Fig. 1: Hydrogen Vehicle Supply Chain
What are the Supply Chain Issues?
The biggest supply chain issues in the hydrogen vehicle market are storage/transport, sourcing rare metals, and infrastructure.
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Hydrogen has a low energy density by volume, requiring it to be stored and transported at high pressures (up to 700 bar for compressed hydrogen) or at very low temperatures (as liquid hydrogen). This makes storage and transport expensive and complex. Testing these systems for leaks, ruptures, and overall integrity is complex and requires specialized facilities and protocols.
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Regarding the rare metals, Hydrogen fuel cells and electrolyzers require rare metals like platinum, palladium, and iridium. These metals are expensive and their supply is limited, which can lead to high costs and supply chain vulnerabilities.
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The current infrastructure for hydrogen transport is limited. There are few pipelines, and the existing ones are not widespread, necessitating reliance on road transport, which is less efficient and more costly.
Are The Material Suppliers Ready?
Raw material suppliers play a critical role in ensuring the smooth growth and affordability of the hydrogen vehicles industry. A small number of countries dominate the mining of key minerals like platinum and nickel, used in FCEV fuel cell catalysts and electrolyzers. This concentration creates a risk of supply chain disruptions and price fluctuations. The anticipated surge in FCEV production could quickly outpace the current capacity of raw material suppliers. Arkema, Dupont, BASF are some of the raw material suppliers. Lucintel had a chance to speak with one of the raw material suppliers, Dupont a leader in materials innovation, this past weekend where we learned that they are supplying materials for nearly every node of the value chain from water purification, electrolyzers, compressors, and all the way to the pumps and valves which would be used in the fuelling stations.
Dupont explained that the largest obstacles they believe which needs to be overcome for hydrogen to become mainstream is the cost of green hydrogen and electrolyzers to go down and for the transportation and strorage of liquid hydrogen to improve. Dupont predicts there will be a boom after 2030
Full interview available below
Are The Parts Fabricators Ready?
Hydrogen vehicles consist of numerous parts from various suppliers. Part fabricators can play a crucial role in making hydrogen vehicles a more cost-effective and competitive transportation option. Fuel cell stacks and hydrogen storage tanks are the most important parts of a hydrogen vehicle. Ballard Power Systems, Cummins, Worthington Industries Inc, Hexagon Composites ASA are some the major part fabricators for hydrogen vehicles.
Currently, hydrogen vehicle production is much lower compared to conventional gasoline or electric vehicles. This translates to lower order volumes for part fabricators, making it difficult to achieve economies of scale and bring down production costs. The future of hydrogen vehicles hinges on factors like government incentives, infrastructure development, and consumer acceptance. This uncertainty makes it challenging for fabricators to invest heavily in production capacity.
Are The Assembly Line/Equipment Suppliers Ready?
The hydrogen vehicle market is advancing with companies like Toyota, Hyundai, and Honda at the forefront, showcasing models such as the Mirai, Nexo, and Clarity Fuel Cell. These automakers have established specialized assembly lines ready for hydrogen vehicle production. Key equipment suppliers, including Bosch and Plug Power, are crucial in providing the necessary components for these vehicles. Bosch, in particular, is heavily invested in producing fuel cell technology and related systems. Despite readiness in production capabilities, challenges such as testing protocols, the transportation of hydrogen, and securing rare metals for fuel cells pose significant barriers to broader market adoption.
We also recently spoke to Bosch Manufacturing Solutions who is a large player in the industrialization of fuel cells and electrolyzers and they think the largest struggle currently is “Building the networks to deploy all the hydrogen along the roads” and they explained how this will not happen until there is investment for more testing with trucks and buses on the roads.
Are The Vehicle Manufactures/ OEMs Ready?
Hydrogen vehicle production volumes are currently much lower compared to other types of vehicles. Due to lower volumes, it makes it difficult for manufactures to achieve economies of scale and bring down manufacturing costs. Fuel cell technology and hydrogen storage tanks are expensive due to complex engineering and specialized materials. This also results in high vehicle prices for consumers. Honda, Toyota, and Hyundai are the major hydrogen vehicle manufactures.
Another issue faced by OEMs is the rapid progress in battery technology and falling battery costs make BEVs a strong competitor in the zero-emission vehicle market. FCEV’s have the benefit of longer range and shorter refill time but BEV’s are cheaper to purchase and refill. To combat this issue Toyota’s Mirai comes with $15,000 worth of hydrogen refills when you purchase their vehicle.
Are The Hydrogen Suppliers Ready?
Major hydrogen suppliers for the hydrogen vehicle market include Air Liquide, Linde, Air Products and Chemicals, and ITM Power. These companies are pivotal in the production and distribution of hydrogen fuel, and they are making significant investments to scale up their operations to support the growing demand for hydrogen vehicles. Air Liquide, Linde, and Air Products and Chemicals are established leaders in industrial gases, including hydrogen. They have extensive production and distribution networks, which are crucial for meeting the demand for hydrogen fuel across various regions. ITM Power specializes in hydrogen energy solutions and is known for its innovative electrolyzer technology, which is key to producing green hydrogen. These suppliers are generally prepared for mass manufacturing, as they have been investing in expanding their production capacities and developing new technologies to produce hydrogen more efficiently and sustainably. However, the readiness of the supply chain is still evolving, with challenges such as the high cost of hydrogen production, the need for extensive infrastructure development, and regulatory hurdles that need to be addressed for widespread adoption of hydrogen vehicles
Are The Users/Fleet Owners Ready?
Fleet owners / users of hydrogen vehicles face a various issues related with the technology. One of the biggest issues for fleet owners is the shortage of hydrogen refuelling stations. Densely populated areas might have a few stations, but rural areas or long-distance routes might have limited or no access, restricting operational flexibility for fleet vehicles. DB Schenker, Rebus Regionalbus Rostock, Regional Transport Cologne, Brighton and Hove and Ceva Logistics are some of the fleet owners.
Refuelling Stations
Setting up a hydrogen refuelling station requires significant investment in equipment like compressors, storage tanks, and dispensing systems and also help from the government. This makes it difficult for companies to establish a large network of stations. Limited number of hydrogen vehicles on the road, stations experience low utilization rates, making it difficult to recoup the high initial investment are the major issue faced by the refuelling stations. H2 MOBILITY, Air Liquide, Linde, Air Products are some of the players in this node. Lucintel attended the largest hydrogen exhibition in North America last week and observed that many companies, like Angi are well-prepared with the necessary equipment and technology for hydrogen refueling stations. While the initial investment for these stations is significant, the supply chain appears to be well-established and ready to support this growth.
To Conclude
So to summarize, while hydrogen vehicles havent hit mainstream yet the supplychain is looking pretty ready, the main hurdles are just investment (in infrastructure, electrolyzers, and transportation) and testing which will in turn lead to the higher demand to kick in economies of scale for the price to decrease and this product to be affordable for more individuals
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