Fuel cell vehicles set for gains in China truck market

Hydrogen gas cell automobiles are set to develop into a significant participant in China’s industrial truck market, predicts JPMorgan’s Elaine Wu.

“At present, the gas cell automobiles account for lower than 5% of the industrial truck market in China and that might develop to about one-third of complete market share in 2050,” Wu, head of Asia ex-Japan ESG and utilities analysis on the agency, informed CNBC’s “Squawk Field Asia” on Monday.

Fuel cell electric vehicles run on electrical energy powered by hydrogen, which may can be utilized to retailer and ship vitality derived from different sources. Hydrogen is a clean fuel and when consumed in a gas cell, produces solely water.

One purpose why gas cell automobiles are a “superb choice” for the industrial truck market is because of their refueling time of solely round 10 to fifteen minutes, Wu mentioned. In addition they have a journey vary of round 800 kilometers, about 50% to 100% above lithium battery electrical automobiles.

Main automakers resembling Toyota, Honda and BMW are tapping into the hydrogen fuel cell market.

China is already pushing for the promotion of gas cell automobiles, in keeping with the JPMorgan analyst.

“The [Chinese] authorities is selling one thing, what we name ‘metropolis clusters’ in order that there could possibly be demonstrative cities telling profitable tales of how gas cell automobiles are carried out in varied elements of the nation,” Wu mentioned.

“That is additionally a coverage that we noticed carried out a few decade in the past, when the central authorities was making an attempt to provide lithium battery electrical automobiles. And we noticed how profitable that was.”

Beijing has mentioned it might like 20% of new cars sold to be new energy vehicles by 2025. Competitors is fierce within the home electrical car house, with Tesla competing towards the likes of homegrown gamers resembling Nio and Xpeng.

China’s local weather targets

With China’s pledge to become carbon neutral by 2060, hydrogen will possible play a job in heavy trade as a clear vitality supply, in keeping with Wu.

“For this heavy industrial sector, excessive warmth content material is required and renewable energy due to this fact isn’t a superb choice to gas heavy industrial sector — however hydrogen is,” she mentioned.

The analyst mentioned China leads the world in hydrogen manufacturing, and accounts for a 3rd of world output.

Learn extra about electrical automobiles from CNBC Professional

“Sooner or later, there could possibly be promotion of inexperienced hydrogen manufacturing whereby renewable energy goes for use to provide hydrogen,” Wu added.

Hydrogen is presently produced from coal, and shifting to inexperienced manufacturing will solely be doable if renewable energy prices proceed to say no, she added.

“What we have seen up to now 10 years is that the associated fee to provide solar energy has dropped by 80% in China. The price of wind energy manufacturing has dropped by 40%,” she mentioned. “If this development continues — and we imagine that it’s going to because of expertise development — in order that signifies that inexperienced hydrogen shall be doable sooner or later when these items come into play.”

— CNBC’s Anmar Frangoul and Evelyn Cheng contributed to this report.

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