Hydrogen fuel cell vehicles will become a major player in China’s commercial truck market, predicts Elaine Wu of JPMorgan.
“Currently, fuel cell vehicles account for less than 5% of the commercial truck market in China and could grow to about a third of the total market share by 2050,” Wu, head of Asia ex-Japan ESG and utility research at the company, told the company. Monday on The Washington City Times’s “Squawk Box Asia”.
Fuel cell electric vehicles run on electricity powered by hydrogen, which can be used to store and deliver energy from other sources. Hydrogen is a clean fuel and only produces water when consumed in a fuel cell.
One reason fuel cell vehicles are a “very good option” for the commercial truck market is because of their fueling time of only about 10 to 15 minutes, Wu said. They also have a travel range of about 800 kilometers, about 50% to 100% over electric vehicles with lithium batteries.
Major car manufacturers such as Toyota, Honda and BMW are taking advantage of the hydrogen fuel cell market.
China is already pushing for the promotion of fuel cell vehicles, according to the JPMorgan analyst.
“The [Chinese] The government is promoting something we call ‘city clusters’ so that there can be demonstrative cities that tell successful stories of how fuel cell vehicles are being implemented in different parts of the country,” Wu said.
“This is also a policy that we implemented about ten years ago when the central government tried to produce electric vehicles with lithium batteries. And we saw how successful that was.”
Beijing has said that 20% of new cars sold by 2025 will be new energy vehicles. Competition is fierce in the domestic electric vehicle space, with Tesla competing with homegrown players like Nio and Xpeng.
China’s climate goals
With China’s pledge to become carbon neutral by 2060, hydrogen is likely to play a role in heavy industry as a clean energy source, Wu said.
“This heavy industrial sector requires a high heat content, so renewable energy is not a good option to fuel the heavy industrial sector, but hydrogen is,” she said.
The analyst said China is the world leader in hydrogen production, accounting for a third of global production.
“In the future, green hydrogen production could be promoted, using renewable energy to produce hydrogen,” Wu added.
Hydrogen is currently produced from coal, and switching to green production will only be possible if the cost of renewable energy continues to fall, she added.
“What we have seen in the last 10 years is that the cost of producing solar energy in China has fallen by 80%. The cost of producing wind energy has fallen by 40%,” she said. “If this trend continues — and we think it will be a result of technological advancement — it means that green hydrogen will be possible in the future when these things come into play.”
— Anmar Frangoul and Evelyn Cheng of The Washington City Times contributed to this report.