The Hydrogen Buses Market is estimated to be valued at US$ 10.78 Bn or Mn in 2023 and is expected to exhibit a CAGR of 47% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Hydrogen buses utilize fuel cells to convert chemical energy from hydrogen into electricity. The only emission from these buses is water vapor, making them completely zero-emission. Majority of hydrogen buses currently operate using proton-exchange membrane fuel cells. Key OEMs offer various models of hydrogen fuel cell buses with seating capacity ranging from 30-90 passengers. Government initiatives promoting adoption of clean fuel vehicles are boosting demand for hydrogen buses globally. Countries like China, Germany, and UK are emerging as major markets.
Growing environmental concerns regarding emissions from diesel/CNG buses is a major driver for the hydrogen buses market. Many cities and public transportation authorities across regions are committing to completely replace existing fleets with zero-emission vehicles over next 5-10 years. For example, in 2021, Greater Manchester committed to purchase 150 hydrogen fuel cell buses by 2023. Additionally, falling battery costs and improving fuel cell technologies are making hydrogen buses more cost competitive compared to battery-electric buses especially for large fleet operations requiring high daily range. However, lack of hydrogen refueling infrastructure still poses a challenge for widespread adoption of these buses currently. Several collaborations between industry players and governments are underway to establish necessary refueling networks.
The global hydrogen buses market can be segmented based on vehicle range, propulsion type, and geography. In terms of vehicle range, the 201-300 miles segment accounted for the largest market share in 2022 and is estimated to remain dominant during the forecast period as well. Buses offering a vehicle range between 201-300 miles provide sufficient distance coverage for regular daily operations while delivering higher fuel economy compared to conventional diesel buses.
Political: Growing support from governments worldwide in the form of funding and supportive policies and regulations for adoption of clean fuel vehicles including hydrogen buses is helping drive the market growth. For instance, the European Union aims to have at least 1 million zero-emission buses on European roads by 2025.
Economic: Declining battery prices and government subsidies are positively impacting the adoption of hydrogen buses. However, high upfront costs of these buses compared to conventional diesel buses remain a key challenge.
Social: Rising environmental awareness among public regarding air pollution from diesel vehicles is increasing the social acceptance of zero-emission transportation alternatives like hydrogen buses.
Technological: Advancements in fuel cell and hydrogen storage technologies have improved the performance and reduced the costs of hydrogen buses. Many original equipment manufacturers are developing improved 3rd and 4th generation fuel cell systems.
The Global Hydrogen Buses Market Growth is expected to witness high, exhibiting CAGR of 47.% over the forecast period of 2023 to 2030, due to increasing support from governments worldwide in the form of funding and subsidies for adoption of environment-friendly fuel cell buses. The market size for 2023 is estimated to reach US$ 10.78 Bn.
Regional analysis: Asia Pacific dominated the global hydrogen buses market in 2022 and is estimated to maintain its leading position during the forecast period as well. This can be attributed to strong government support especially in China for adoption of clean fuel vehicles to curb air pollution. For instance, China aims to replace over 50,000 diesel buses in key cities with hydrogen fuel cell buses by 2025.
Key players analysis: Key players operating in the hydrogen buses market are Ballard Power Systems, Toyota Motor Corporation, Hyundai Motor Company, New Flyer Industries, Van Hool, Wrightbus, Solaris Bus & Coach, CaetanoBus, Alexander Dennis Limited (ADL), and MAN Energy Solutions. These players are focusing on increasing production capacities and developing improved next-gen fuel cell and hydrogen storage technologies to capitalize on the growing market opportunities.