The Hydrogen Debate: Can Fuel Cells Power the Future of Road Transport?
For over a decade, the debate has raged: Can hydrogen fuel cell vehicles (FCEVs) compete in the road transport sector? The prevailing view is that battery electric vehicles (BEVs) are leading the race. With around 4 million BEVs sold compared to just 40,000 hydrogen vehicles, the market activity seems to confirm it.
But is this the full story? Some major automakers, including Toyota, think otherwise. At the Monaco Hydrogen Forum, a senior technologist at Toyota made a bold statement: EVs won’t be the only solution for light-duty vehicles (LDVs).
🛻 Is There a Good Case for Hydrogen in LDV Road Transport?
Toyota believes the 75 million light-duty vehicle (LDV) market will also see significant hydrogen demand. Here’s why:
1️. Grid Limitations: Many regions lack the electricity grid capacity and charging infrastructure needed to transition fully to BEVs in time to meet climate targets.
NovAzure’s View: While 750 million people globally lack electricity access, they are more likely to adopt battery electric two- and three-wheelers due to affordability, cheaper electricity, and high hydrogen distribution costs in remote areas.
2️. Battery Material Constraints: Limited supply of critical minerals like lithium could bottleneck BEV production. Toyota’s “1-6-90 rule” suggests resources for one BEV could produce six plug-in hybrids or 90 hybrid vehicles, potentially reducing CO2 emissions faster in resource-limited markets.
NovAzure’s View: Battery technology is rapidly evolving, reducing reliance on scarce materials like cobalt and nickel. Hydrogen infrastructure also presents material constraints, such as iridium for some types of electrolysis.
3️. Hydrogen’s Versatility: Being abundant and energy-dense, hydrogen offers a long-term alternative to overcome BEV limitations.
NovAzure’s View: Hydrogen offers improved range over batteries for the same weight, which is an advantage. The improved speed of refuelling hydrogen vehicles vs. conventional lithium-ion battery vehicles is an argument in its favour, but future solid-state batteries in development may close the gap.
🚛 Is Hydrogen a Winner for HDV Applications?
The heavy-duty vehicle (HDV) market, at 2.3 million vehicles, is widely discussed as a viable use case for hydrogen.
- Range and Refuelling Time: FCEVs offer ranges up to 800 miles per tank, ideal for long-haul trucking. Refuelling takes 10-20 minutes, unlike BEV charging, which can take hours using car chargers, or requires exceptionally powerful HDV-focused chargers.
- Fuel Station Infrastructure: China aimed for 1,200 hydrogen refuelling stations by 2025, but had 354 by the end of 2023. Europe had 250 in late 2023, but closed six stations in 2024. The closed stations were reportedly life-expired.
- Cargo Capacity: Hydrogen trucks lose less cargo capacity, as their smaller batteries weigh less. A hydrogen truck may lose 250-500 kg of payload, compared to over 2 tonnes for current BEVs. Solid-state batteries will reduce the gap to hydrogen payload performance, but solid-state batteries are still heavier than hydrogen fuel cell systems (which rely on lightweight hydrogen tanks and smaller batteries).
- Flexibility and Operational Efficiency: Hydrogen trucks reduce dwell times by up to 35% compared to battery trucks, due to fewer stops and faster refuelling. Battery trucks are more energy efficient, requiring up to three times less electricity than hydrogen trucks on the same journey route.
- Energy Density: Hydrogen has a gravimetric energy density of 33.6 kWh/kg, whereas lithium-ion batteries’ energy density is much lower, at about 0.25 kWh/kg.
- Cost Challenges: Hydrogen road fuel retails for around €18/kg in Europe (likely green/renewable) and €5/kg in China (possibly grey, but note that green hydrogen production costs may drop closer to €5/kg cost levels in 2025). Hydrogen trucks cost €150k in China but €500-600k in Europe. Running a hydrogen vehicle is nevertheless currently about four times more expensive per kilometre compared to an electric vehicle.
NovAzure’s View: Capex and Opex are critical. Hydrogen trucks will likely maintain an edge in payload capacity, especially for long-haul applications. Hydrogen’s higher energy density by weight over lithium-ion batteries and its superior dwell times make it efficient for transporting heavy loads over long distances. Hydrogen refuelling stations are easier to set up for long-haul and depot fleets, compared to the extensive grid upgrades needed for BEV charging stations. Whilst hydrogen refuelling networks need urgent growth, the business cases for replacements remain weak due to the low number of hydrogen-fuelled vehicles on the road.
📢 What Needs to Happen for Hydrogen to Scale?
NovAzure’s View: Hydrogen adoption faces several hurdles that must be addressed:
- Competitive Fuel Pricing: Fuel costs constitute 40% of a hydrogen car’s running expenses and 60% for trucks, making HDVs particularly price-sensitive.
- Infrastructure Expansion: Establishing a hydrogen distribution network is a long-term endeavour, similar to the building of natural gas pipelines. A coordinated approach, as seen in China, is necessary to avoid Europe’s fragmented efforts. Successful hydrogen valley projects in Europe highlight the importance of financial backing and strategic investment.
- Regulatory Support: Governments must implement clear policies that facilitate cost-competitive hydrogen production and infrastructure expansion to provide certainty for investors and business leaders.
- Stronger Incentives: Long-term subsidies are crucial. The decline in EV sales following the reduction of subsidies in Europe underscores the importance of supporting both vehicle purchases and hydrogen fuel prices simultaneously. We agree with Toyota that the lessons from the rapid scaling of hydrogen in China vs. Europe highlight the importance of incentivising both vehicle purchases AND hydrogen fuel prices simultaneously for a sustainable value chain.
🔥 Conclusion: Hydrogen’s Role in Road Transport
While BEVs dominate the passenger vehicle market, hydrogen is unlikely to gain traction in the light-duty sector in the foreseeable future. However, for heavy-duty transport, hydrogen’s advantages in range, payload capacity, and refuelling times could ensure its place in the energy mix. To scale effectively, hydrogen requires aggressive investment, robust regulations and incentives across the value chain.
That said, a sustainable market cannot exist without sufficient demand for hydrogen-powered vehicles and infrastructure.
📢 What do you think? Can hydrogen fuel cells gain ground in heavy-duty road transport, or will BEVs remain dominant? Let’s discuss!
