Toyota, Hyundai, SinoHytec potential winners from growth in fuel cell EVs: Credit Suisse

Fuel cell electric vehicles (FCEV) are likely to achieve at least 50 per cent in compound annual growth rate by 2030, and companies like Toyota, Hyundai and SinoHytec are set to be among the potential winners.

Credit Suisse analysts said in a research note that the sector’s growth is likely to be driven by factors such as falling costs, expanding infrastructure and favourable regulation tailwinds with generous cash subsidy.

These cost savings may come from a fall in hydrogen fuel prices, which the analysts estimate would hit US$4 per kilogram (kg) by 2030, down from the current US$10 per kg in 2022. Fuel cell system costs are likely to come down too, from US$1,000 per kilowatt (kW) in 2022 to US$350 per kW in 2030, they added.

On a global scale, the research team is more bullish on the European FCEV market and expects it will top South Korea as the largest FCEV market globally in 2030, followed by China and Japan, driven by European countries’ aggressive hydrogen refuelling stations expansion plan and FCEV purchase subsidies.

While FCEVs are currently used in both passenger and commercial vehicles, the research team thinks there is greater potential for FCEVs to expand in the commercial vehicle market.

“Pure electric vehicle is a better technology solution for PVs (passenger vehicles) in terms of cost, while hydrogen-powered FCEV could be a mid to long-term solution for commercial vehicles in certain scenarios like cold winter regions and long-distance and heavy-loading transportation,” said the analysts. They further estimated fuel cell CV’s (commercial vehicles) penetration to increase from 0.1 per cent in 2022 to 9.1 per cent in 2030 and 50 per cent in 2040.

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One of the key considerations of commercial vehicle fleet owners is the total cost of ownership on a “payload carried per kilometre” basis and more than half, or about 55 per cent, comes from fuel costs, according to estimates from the research team.

The research team, however, foresees these fuel costs to fall on the back of lower production cost on an increasing share of cheap green hydrogen supply, lower refuelling cost and lower transportation cost from maturing liquid hydrogen storage technology.

Fuel cell heavy-duty truck (HDT) is therefore likely to reach cost parity with diesel engine HDT by 2029 on falling hydrogen fuel price, said the analysts. Credit Suisse said it expects the total cost of ownership of a 40t fuel cell HDT to reduce to roughly US$91 per 100 km in 2029, nearly on a par with the US$90 for diesel trucks.

As such, the research team selected Toyota, Hyundai, and SinoHytec as some of its top picks, noting the uptrend on these companies’ share prices since May 2022, influenced by rising oil prices.