Ameer Randolph
Hydrogen fuel cell cars are an exciting development in the automotive industry, offering an emission-free alternative to traditional combustion engines without the long charging times of battery-powered electric vehicles. Hydrogen fuel cells combine hydrogen and oxygen to generate electricity, with the only residual product being water. While hydrogen fuel cell cars have several advantages over electric cars, such as longer range and faster refuelling times, they face challenges due to the high cost of producing clean hydrogen and the lack of refueling infrastructure. However, with major automakers like GM, Honda, Hyundai, Volvo, and BMW investing in hydrogen fuel cell technology, the industry is expected to grow. For investors, this presents an opportunity to get in early on the green hydrogen boom by investing in companies like Plug Power, Bloom Energy, and Ballard Power Systems, or by exploring ETFs like the Global X Hydrogen ETF.
| Characteristics | Values |
|---|---|
| Hydrogen fuel cell stocks categories | Green hydrogen production and use, fuel cell manufacturers |
| Hydrogen producers | Air Products and Chemicals Incorporated (NYSE: APD), Plug Power (NASDAQ: PLUG) |
| Fuel cell manufacturers | FuelCell Energy (NASDAQ: FCEL), Bloom Energy Corporation (NYSE: BE), Ballard Power Systems (NASDAQ: BLDP), Nikola (NASDAQ: NKLA) |
| Hydrogen ETFs | BlueStar Global Hydrogen & Next Gen Fuel Cell Index, Global X Hydrogen ETF |
| Oil and gas companies exploring hydrogen technology | Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), BP (BP) |
| Hydrogen-powered vehicles | Cars, trains, buses, maritime vessels, trucks, airplanes |
| Hydrogen refueling stations | 65 stations in the US and Canada, mostly in California |
| Hydrogen refueling time | Similar to filling up a gasoline or diesel tank |
| Hydrogen refueling infrastructure | Expanding worldwide, with initiatives like Germany's H2 MOBILITY and Clean Energy Partnership |
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What You'll Learn
Hydrogen fuel cell car advantages
Hydrogen fuel cell cars are an attractive prospect for investors and consumers alike. They offer a compelling alternative to conventional power sources, with several advantages.
Firstly, hydrogen fuel cells are highly efficient, with a rapid refueling capability and high energy density. This means hydrogen fuel cell cars can offer longer driving ranges and shorter downtime compared to traditional internal combustion engine vehicles. The refueling process for hydrogen fuel cell cars is similar to that of conventional cars, taking only around 5 minutes, and they can achieve a driving range of over 300 miles.
Secondly, hydrogen fuel cells are environmentally sustainable. They produce minimal emissions, with water vapour and heat as by-products, and can be powered by hydrogen produced from low- or zero-carbon-emission sources, such as solar energy or wind power. This makes them an attractive option for those looking to reduce their carbon footprint and contribute to global zero-carbon energy initiatives.
Thirdly, hydrogen fuel cells are versatile. They can be used across various applications, including transportation, stationary power generation, and backup power systems. This adaptability means they can be utilized in cars, buses, trucks, and even airplanes, providing reliable power during natural disasters and grid outages.
Finally, hydrogen fuel cells offer cost-effectiveness over their lifecycle. While the initial setup costs for hydrogen infrastructure can be high, the operational costs of hydrogen fuel cell cars are low due to their minimal maintenance requirements and long service life.
Despite challenges in extraction and the current high costs of production, storage, and distribution, advancements in technology and the increasing demand for decarbonization solutions mean that hydrogen fuel cell cars are an attractive investment prospect.
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Hydrogen fuel cell car companies
Several major automakers are investing in hydrogen fuel cell technology, despite the slow progress in the industry. Honda, for instance, has been working on hydrogen fuel cell vehicles since 2017, when it began a joint venture with GM to produce hydrogen fuel-cell systems. Honda also plans to introduce an FCEV version of its CR-V crossover, and it is developing a fuel cell-powered heavy-duty truck with Isuzu Motors Limited. Toyota is another major player in the hydrogen fuel cell car market, having introduced a hydrogen fuel cell version of its Hilux pickup in 2023. Toyota is also testing heavy-duty hydrogen trucks and buses in Europe and Japan, and it has expanded its collaboration with PACCAR to develop zero-emission, hydrogen fuel cell trucks.
Other companies investing in hydrogen fuel cell technology include Hyundai, GM, Volvo, and Nikola. Hyundai has sold about 1600 Nexo SUVs in six years, while GM has agreements with Autocar Industries and Komatsu to develop zero-emission vehicles powered by fuel cells. Volvo is also investing in hydrogen fuel cells, and Nikola has brought its TRE FCEV long-haul truck to production and is expected to begin deliveries soon.
There are also a number of companies that are focused on the production of hydrogen fuel cells, rather than the vehicles themselves. These include Plug Power, which manufactures green hydrogen and has deployed over 250 fuelling stations, and FuelCell Energy, which manufactures stationary fuel cells with hydrogen-producing capabilities. Another company to consider is Ballard Power Systems, which is focused on PEM fuel cells for automotive applications.
For investors, there are a number of ways to get involved in the hydrogen fuel cell industry. One option is to invest directly in the automakers or fuel cell producers mentioned above. Another option is to invest in green hydrogen ETFs, which offer a diversified way to invest in the industry and hedge against company-specific risks.
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Hydrogen fuel cell car costs
Hydrogen fuel cell cars are powered by an electric motor and are classified as e-cars. The electricity that powers the car is generated through a process known as reverse electrolysis, which takes place in a fuel cell. In this process, hydrogen and oxygen are combined to generate electricity, with the only residual product being water. This electricity then flows to the electric motor and directly drives the vehicle.
One of the main advantages of hydrogen fuel cell cars is their quick refuelling time, which is comparable to that of gasoline or diesel cars. However, the lack of refuelling infrastructure for hydrogen cars remains a challenge. The cost of producing clean hydrogen is also a factor in the slow adoption of hydrogen fuel cell cars. It costs about $1.50 per kilogram to produce hydrogen from natural gas and $5 per kilogram to produce clean hydrogen. The U.S. Department of Energy aims to reduce the cost of clean hydrogen to $1 per kilogram to make it more competitive.
Despite the challenges, major car manufacturers like Hyundai, GM, Volvo, and Honda are investing in hydrogen fuel cell technology. For example, Honda has started commercial production of hydrogen fuel-cell systems at a plant outside Detroit, in a joint venture with GM. Honda also plans to introduce an FCEV version of its CR-V crossover and is developing a fuel cell-powered heavy-duty truck with Isuzu Motors Limited. Hyundai is investing billions in hydrogen technology and plans to introduce a hydrogen version of all its models from 2028 onwards.
In addition to car manufacturers, there are also companies focused on hydrogen fuel cell technology, such as Plug Power, which has deployed over 70,000 fuel cell systems and more than 250 fuelling stations. Plug Power is developing green hydrogen production plants and is a diversified and integrated hydrogen company, with applications in both stationary power production and automotive uses. Another company to consider is Bloom Energy, which produces highly specialised green fuel cells for on-site applications requiring reliable power generation.
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Hydrogen fuel cell car refueling
Hydrogen fuel cell cars are powered by hydrogen, which is widely viewed as necessary to decarbonize the planet. The hydrogen fuel cell industry can be divided into two categories: green hydrogen production and use, and fuel cell manufacturers.
Green hydrogen production involves generating hydrogen using renewable energy sources, such as wind, solar, or wave power. This process involves using an electrolyzer to produce hydrogen, which can then be compressed, liquefied, and transported. On the other hand, fuel cell manufacturers develop and market technology that uses hydrogen. These manufacturers can be further divided into two groups: those creating stationary fuel cells for applications like data centers, and those focused on automotive applications.
Investing in hydrogen fuel cell cars can be done by investing in companies that produce hydrogen or develop fuel cell technology. For example, Air Products and Chemicals Incorporated (NYSE: APD) is the world's leading producer of hydrogen, while FuelCell Energy (NASDAQ: FCEL) manufactures stationary fuel cells with hydrogen-producing capabilities. In the automotive space, Ballard Power Systems (NASDAQ: BLDP) focuses on PEM fuel cells for vehicles, and Nikola (NASDAQ: NKLA) is working on long-haul trucks powered by hydrogen fuel cells.
When it comes to refueling hydrogen fuel cell cars, the process is similar to refueling a car with gasoline. Hydrogen fuel cell cars, also known as Fuel Cell Electric Vehicles (FCEVs), are charged using compressed hydrogen gas. The fuel cell draws hydrogen from an onboard tank and chemically fuses it with oxygen to produce electricity and water. Refueling a FCEV typically takes around three to five minutes and can provide over 300 miles of range. To address the lack of widely available hydrogen refueling stations, some manufacturers offer three years of free hydrogen fuel with the purchase of a vehicle. California is leading the way in terms of hydrogen refueling infrastructure, with over 35 stations currently available and more in development.
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Hydrogen fuel cell car future
Hydrogen fuel cells are widely viewed as necessary for the future of decarbonization. However, the adoption of hydrogen fuel cell technology has been slow due to the high cost of production and the lack of a robust fueling network. Despite this, major automotive manufacturers like Hyundai, GM, Volvo, and Honda continue to invest in hydrogen fuel cells, particularly for heavy-duty applications.
One of the key advantages of hydrogen fuel cell cars is their quick refueling time, which is comparable to that of gasoline or diesel vehicles. Additionally, hydrogen fuel cell cars can travel farther on a full tank than electric cars on a full charge. The electricity required for electrolysis can be generated from renewable sources such as solar or wind energy, resulting in "green hydrogen". However, the current lack of refueling infrastructure for hydrogen cars remains a challenge.
To address this, companies like Plug Power, a leading hydrogen fuel cell company, have deployed over 250 fueling stations worldwide. Plug Power is also developing green hydrogen production plants, aiming for commercial operation by the end of 2028. Other companies like Nikola are focused on producing long-haul trucks powered by hydrogen fuel cells, while GM has agreements to develop zero-emission vocational vehicles and mining trucks with fuel cell technology.
For investors, there are several ways to get involved in the hydrogen fuel cell car future. One option is to invest in companies that are directly involved in the development and commercialization of hydrogen fuel cell technology, such as Plug Power, Bloom Energy, and Ballard Power Systems. Another option is to consider ETFs like the Global X Hydrogen ETF, which provides diversified exposure to the renewable energy sector. Additionally, investors can look at large oil and gas companies like BP, which is investing in hydrogen and CCS projects worldwide as part of its lower-carbon energy ambitions.
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Frequently asked questions
Some hydrogen fuel cell car stocks to watch are Plug Power (NASDAQ: PLUG), Bloom Energy Corporation (NYSE: BE), Ballard Power Systems (NASDAQ: BLDP), and Nikola (NASDAQ: NKLA).
Some hydrogen fuel cell ETFs to invest in are the Global X Hydrogen ETF and the BlueStar Global Hydrogen & Next Gen Fuel Cell Index ETF. These ETFs offer diversified exposure to the hydrogen fuel cell industry by investing in a basket of stocks related to hydrogen fuel cell technology and infrastructure.
Hydrogen fuel cell cars have several advantages over traditional internal combustion engines and battery-electric vehicles. They produce electricity on-board, eliminating the need for lengthy recharging sessions, and can travel farther on a full tank than electric cars. Additionally, hydrogen fuel cell cars are emission-free, producing only water vapor as a byproduct, and are quieter than traditional engines.
One of the main disadvantages of hydrogen fuel cell cars is the lack of refueling infrastructure. Currently, there are only a limited number of hydrogen refueling stations, making it challenging for hydrogen car owners to find places to refuel their vehicles. Additionally, hydrogen fuel cell cars tend to be more expensive than comparable electric or internal combustion engine vehicles.
Investing in hydrogen fuel cell companies, especially smaller and less diversified businesses, carries risks. The development of hydrogen technology may be slower than expected, impacting the performance of these companies. Additionally, policy changes and tax treatment uncertainties can affect the industry's growth. However, the potential upside is significant, and major players in the automotive industry are investing in hydrogen fuel cells.
