Hydrogen Fuel Cell Truck Market Set for Rapid Expansion
The hydrogen fuel cell truck market is expected to experience significant growth in the coming years. With a focus on reducing emissions, more companies are investing in hydrogen fuel cell technology to power their trucks. This market is expected to expand rapidly due to increasing demand for clean and sustainable transportation solutions.
Well over 800,000 hydrogen fuel cell commercial trucks will be sold by 2035, according to a study by Information Trends. These include both heavy-duty as well as light and medium-duty trucks.
The study, "Global Market for Hydrogen Fuel Cell Commercial Trucks, 2021," says that hydrogen fuel cell technology gives trucks a higher range than battery-electric trucks, while offering rapid fueling. Because of this, heavy-duty fuel cell trucks are already outcompeting heavy-duty battery-electric trucks, particularly for long-haul routes, Information Trends said.
Heavy-duty trucks will continue to dominate the market for hydrogen fuel cell trucks, said Naqi Jaffery, president and CEO of Information Trends. There is a particular industry interest in transitioning heavy-duty trucks to zero-emission rapidly because these trucks are the biggest contributors to carbon emissions on roadways.
Until the second half of 2020's, battery-electric trucks will remain competitive for medium-sized hydrogen fuel cell trucks, Jaffery said. Battery-electric trucks will become less competitive as more hydrogen stations are built and as the prices of medium-sized hydrogen trucks fall.
Smaller battery-electric trucks will have an edge over hydrogen fuel cell trucks until early 2030s, Jaffery said. These trucks will lose that edge as fuel cell trucks hit lower price points and as the hydrogen stations become more pervasive, the study said.
The biggest impediment to the adoption of hydrogen fuel cell trucks so far has been the cost of these vehicles, the Information Trends study said. However, several factors have converged to bring the prices of these trucks down.
According to the study, firstly, these vehicles are lighter than battery-electric vehicles, making them better suited to carry heavy cargo. Secondly, these trucks travel much longer distances than battery-electric vehicles, making them well equipped for long-haul transportation.
This is one of the most comprehensive and timely studies on hydrogen fuel cell trucks. It discusses hydrogen fuel cell truck-maker strategies and provides their in-depth profiles. The study discusses factors differentiating hydrogen fuel cell trucks from trucks running on other power sources, and their market impact.
Nikola's current order volume is far below the 14,000 hydrogen fuel-cell truck orders the company reported in 2020 when investors' optimism soared over Nikola's potential to dominate the market for electric heavy-duty trucks as Tesla Inc. had done with electric passenger cars. Nikola's orders at the time were mostly nonbinding, and the company was years away from having the manufacturing and hydrogen-fueling capacity in place to support that many trucks. Nikola's stock price, which has been falling for months, recently sank to a new low below $4.
Trevor Milton, who founded Nikola in 2015 and served as its CEO until 2020, captivated investors and other executives with ambitious forecasts of $10 billion in potential revenue from its early orders. Nikola merged with VectoIQ Acquisition Corp., a special-purpose acquisition company, and went public in the summer of 2020. The company's valuation soared, at one point surpassing Ford Motor Co. as Nikola's stock price reached a high of $79.73.
Shortly after the stock's debut, investors began questioning the company's processes and the timing for turning orders into revenue. A short-seller investor's report in September 2020 decried Nikola as an "intricate fraud," and said Mr. Milton exaggerated the company's technology. Nikola disputed the fraud accusations, but Mr. Milton resigned as executive chairman later that month.
Nikola, which reported revenue for the first time earlier this year, collected $18.1 million in revenue from the quarter ended June 30, mostly from the delivery of 48 battery-powered trucks. The company had a net loss of $173 million in the quarter.
For most trucking companies, the cost of heavy-duty electric trucks remains largely unappealing, analysts said. The initial cost of $300,000 to $400,000 for an electric truck is at least twice as much as that of a diesel model. Nikola said this summer that the average price of its trucks is about $325,000.
In North America, electric trucks account for less than 1% of heavy-duty truck production, which usually ranges from 250,000 to 300,000 vehicles annually. Electric's share is expected to increase to about 10% by 2027 as tighter environmental regulations make diesel trucks more expensive, according to ACT Research.
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