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Climate change and energy

Why hydrogen is losing the race to power cleaner cars

Batteries are dominating zero-emissions vehicles, and the fuel has better uses elsewhere.

February 28, 2024
A photo illustration showcasing a car on a downward trending arrow.

Imagine a car that doesn’t emit any planet-warming gases—or any pollution at all, for that matter. Unlike the EVs on the roads today, it doesn’t take an hour or more to charge—just fuel up and go.

It sounds too good to be true, but it’s the reality of vehicles powered by hydrogen fuel cells. And almost nobody wants one. 

Don’t get me wrong: hydrogen vehicles are sold around the world. But they appear to be lurching toward something of a dead end, with fuel prices going up, vehicle sales stagnating, and fueling stations shutting down.

Hydrogen fuel cells work by combining hydrogen and oxygen in chemical reactions, generating electricity that can power vehicles. These cars are frequently touted as a climate-friendly transportation option, in a sector where more choices are desperately needed. Transportation is one of the world’s biggest problems when it comes to climate change—the sector accounts for roughly a quarter of global emissions. There are still barriers to adoption of electric vehicles as fossil-fuel alternatives, with many consumers worried about range, charging time, and a shortage of chargers. 

But while hydrogen-fuel-cell vehicles offer another alternative, the technology has largely failed to gain traction with drivers either. Here’s why, and what would need to happen for these cars to have any chance of hitting the road.

1. They’re behind 

A decade ago, the race to introduce a popular zero-emissions vehicle was anyone’s to win. “Go back to the 2010s, and the two technologies—electric and fuel cell—were very much talked about in the same breath,” says Colin McKerracher, head of the transportation team at BloombergNEF.

Today, though, batteries are the clear front-runner. In 2023, global sales of battery electric vehicles topped 10 million, plus about 4 million plug-in hybrids. In that same period, only about 14,000 fuel-cell vehicles were sold worldwide. That means for every hydrogen-powered vehicle sold, 1,000 battery-powered ones were hitting the road. And the gap is widening, with EV sales growing by around a third in 2023 and sales of fuel-cell vehicle shrinking by roughly the same percentage.

Sales are concentrated in a few markets where fueling stations are widely available. The vehicles can be found mainly in China, South Korea, and Japan, as well as in Germany and the US (almost entirely in California). 

Despite lagging sales, some automakers have stood by fuel-cell vehicles, particularly Toyota. “We have had an effort in hydrogen for a long time,” said Gill Pratt, Toyota’s chief scientist, at a World Economic Forum event in 2023. The company believes in hydrogen both for fuel cells and for combustion engines (which would burn the fuel to generate electricity), Pratt said. 

Passenger vehicles require a base of supporting infrastructure. For EVs, that’s chargers, while hydrogen vehicles would need fueling stations. So a head start for batteries means the focus has been on building chargers, and once the infrastructure for one technology is established, it can be more difficult for an alternative option to gain a foothold. 

2. They’re expensive

Part of the reason consumers aren’t flocking to hydrogen cars is their cost, McKerracher says. The 2024 Toyota Mirai, one of the best-selling hydrogen vehicles on the market, rings in at around $50,000 today—more expensive than comparable gas and electric cars. Some countries are hoping to help things along: in South Korea, the national and local governments offer incentives that could basically halve the cost of a new fuel-cell vehicle for consumers.

Proponents of fuel-cell vehicles argue that they just need to scale—when sales get going, costs will come down. 

There is some precedent for that scenario. Lithium-ion batteries have cratered in price as production has scaled. The difference is that in the case of batteries, they were already being built and used for a commercial technology; the cells that were strung together and packaged in vehicles were the same type as those powering personal devices like cameras. There’s nothing comparable happening for fuel cells, though, McKerracher says.

Meanwhile, supply of lithium-ion batteries has continued to explode, and prices for lithium-ion battery packs (collections of cells that power EVs) have dropped by over 80% in just the last decade.

It’s not just the cost of the vehicle, either. Fuel costs are high too—for the same trip, hydrogen fuel would cost more than electricity or even gasoline. 

A recent analysis from the trade publication Hydrogen Insight found that after price hikes for hydrogen in California, the cost to drive a Toyota Mirai was nearly 14 times the cost to drive a Tesla Model 3 (a comparable EV) in the state. The difference isn’t so stark everywhere, but the trend generally holds globally—hydrogen is the pricier option. 

3. The infrastructure isn’t there

One of the central draws for fuel-cell vehicles is the speed and ease of fueling up at stations. Building those stations, though, has proved to be a challenge. 

Toyota’s Pratt pointed to this challenge at the WEF event, calling hydrogen infrastructure a “chicken-and-egg problem.” Basically, there’s little demand for hydrogen vehicles today because there aren’t enough fueling stations, and there’s not much demand for fueling stations because there are so few fuel-cell vehicles on the roads. 

“We’re confident that that infrastructure is coming,” Pratt said, citing growing support for governments and the need for hydrogen in industry.

Overall, hydrogen fueling infrastructure is seeing modest growth globally—but things have been going in the wrong direction in some key markets, including the hydrogen enclave that is California. Shell closed down all its hydrogen fueling stations for passenger vehicles in the state earlier this month, though the company will still operate some for heavy-duty vehicles. That follows similar closures across the state in late 2023.

Battery vehicles also have been held back by infrastructure. The big difference, though, is that it’s possible to charge vehicles virtually anywhere there’s an electrical hookup, and electricity powers nearly all our buildings. So early adopters had an option even without public fast chargers, while hydrogen vehicles rely entirely on fueling stations, with all the logistics involved. 

4. The tech is inefficient

Another issue for fuel cells is that they’re just less efficient than batteries. 

When converting energy from one form to another, there are always losses. In the case of lithium-ion batteries, that means converting electricity to chemical energy during charging, and vice versa during discharging. Roughly 10% of the electricity that went into charging the battery is lost in the process, making the efficiency around 90%. 

Hydrogen fuel cells lose significantly more energy—the journey from electricity to hydrogen through electrolysis (more on this process in a moment) results in around a 30% loss, says Geert de Cock, electricity and energy manager at the European Federation for Transport and Environment. 

Then another 20% of the original electricity input is lost in the conversion back, making the whole process about 50% efficient.

Those losses will have long-lasting implications for the price and availability of hydrogen fuel. If you’re choosing between using the same amount of renewable power to directly charge an EV and turning it into hydrogen to use in a fuel- cell vehicle, there’s a big difference in how far that electricity will go. 

5. Clean hydrogen is in short supply …

Right now, hydrogen isn’t a decarbonization solution—it’s actually a problem, de Cock says. That’s because nearly all hydrogen produced today (it’s largely used for chemicals and fertilizers, and in oil and gas operations) is made using fossil fuels. So while a fuel-cell vehicle won’t itself emit greenhouse gases, producing the hydrogen fuel it uses is usually responsible for some climate pollution.

There are lower-emission ways to generate hydrogen fuel, some using devices called electrolyzers that are powered by electricity. If that electricity comes from renewable sources, hydrogen can be a low-carbon way to store and deliver energy. Other hydrogen production efforts in development incorporate carbon capture, which may also reduce the emissions associated with the fuel, though many experts have concerns about just how effective those technologies are. But in either case, there’s probably not going to be enough of the low-carbon version of the fuel to go around.

6. … And there are better ways to use it

Production of low-emissions hydrogen could reach 38 million metric tons by 2030, if all early-stage projects end up starting as expected, according to the International Energy Agency. That’s a significant chunk of current global demand, which reached 95 million metric tons in 2022. 

But low-carbon hydrogen is being pitched as a solution in what feels like every industry under the sun, from aviation and shipping to heavy industry. And passenger vehicles actually might be one of the worst possible uses for clean hydrogen, de Cock says.

In terms of priority, the top of the list would be replacing existing uses for hydrogen, like production of fertilizer and other chemicals, de Cock says. Next come heavy-industry uses like steel production. Other challenges that are tough to address, like long-distance flights and shipping routes, should also be considered for the hydrogen supply, he adds. 

Passenger vehicles fall toward the bottom of the list because there are already other options that work—namely, electric vehicles. 

Yes, but ...

That’s not to say that hydrogen is a total no-go on roads. The fuel could be useful in a more technologically difficult sector: long-range, heavy-duty trucking. At the WEF event, Pratt said Toyota is focused on these vehicles in particular: “Where we see it in the future is mostly for larger vehicles, where the recharging or refueling time matters a great deal.”

Because batteries are heavy, they limit the potential payload that such vehicles can carry, so they’re not an ideal option. Long charging times and a scarcity of the high-power chargers that would be needed to power up massive batteries are also barriers. 

“Heavy-duty long-haul is a more promising application for hydrogen, but it’s not a slam dunk there either,” McKerracher says. 

If hydrogen takes off for long-range trucking, there’s a possibility that the effects will diffuse into other vehicles on the road, says Sergey Paltsev, deputy director of the MIT Joint Program on the Science and Policy of Global Change. “But it’s not going to happen overnight,” Paltsev adds. 

And in the meantime, EV chargers and battery technology may be difficult to replace when and if hydrogen fueling infrastructure starts to spring up for larger vehicles.

So is it time to forget about hydrogen cars? As de Cock puts it, “We think the market is decided.” 

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