Page 92 - Nuvama | IC Report 2023

• MANUFACTURING • NEW ENERGY • URBANISATION • CONSUMPTION PREMIUMISATION • EQUITY SAVINGS CULT

Fuel cells: The future of New Energy

Long-term demand for hydrogen shall come from areas beyond existing industrial applications such
Fuel cells could as refineries or chemicals. Fuel cells (with hydrogen as fuel) could have major applications in road
have major transport and power industries.
applications in
road transport and Road transport: Key beneficiary of fuel cell technology
power industry Hydrogen is a potential transport fuel. It is a low or nil carbon alternative to refined oil products and
natural gas. And it complements other alternatives such as advanced biofuels. In fact, green hydrogen
can be the best fit in times of growing environmental concerns.
According to AFC TCP (survey of 16 member countries), there were 51,437 fuel cell vehicles (FCVs)
globally in 2021. Asia leads the pack with a 67% market share, followed by North America (24%)
and Germany (3%). Furthermore, about 82% volumes come from passenger cars (FCEVs), followed
by buses (9.2%).
Toyota and Hyundai are the leading FCEV car manufacturers, and both have ambitious plans to scale
up FCEVs. Toyota’s announced target is to produce over 30,000 fuel cell electric cars annually after
2020 (Tajitsu and Shiraki, 2018). Hyundai aims to increase fuel cell systems production capacity to
0.7 million by 2030 (3,000 in 2018).
As technological advancements bring down the fuel cell cost, FCEVs would see faster adoption
globally. Furthermore, we foresee FCEVs emerging as a rising threat to adoption of BEVs. FCEVs are
currently not competitive vis-à-vis BEVs (battery-operated EVs), primarily due to high cost and low
utilisation of infrastructure.
Exhibit 11: Exhibit 12:
FCEVs by region: FCEVs globally
Asia leads with by vehicle type:
67% market share Passenger cars
56,000 54,000 dominate
51437
49,000 3652
45,000 4732
42,000
34,804 36,000 3,210
35,000
(FCEV units) 28,000 25,212 (FCEV units) 27,000 5,648

1,835
21,000 4,456 42178
18,000
12,952
14,000
25,932
9,000 18,913
7,000
0 0
2018 2019 2020 2021
ASIA 2019 2020 2021
Passenger cars
US China Korea (FCEVs) Buses
Light & medium Heavy commercial
Japan Germany Others
commercial vehicles vehicles
Source: AFC TCP, Nuvama Research
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