As the effects of climate change become more regular and severe, and uncertainty continues to permeate global economies, governments across Europe have become increasingly aware that they need to take bold actions to address both challenges. According to the International Energy Agency, the transport sector is responsible for around a quarter of direct CO2 emissions, making the decarbonisation of transport a prime component of net zero ambitions. As such, alternative fuel sources to petrol and diesel are being looked at for road vehicles. One such fuel is hydrogen which has risen up the agenda as one of the most promising options to reduce carbon emissions, fight climate change and stimulate economic growth by creating new industries and jobs.

The UK and French governments have both laid out their strategy for achieving net zero by 2050, with Germany aiming for the even earlier target of 2045. And it’s likely most countries that haven’t already will lay out similarly ambitious climate change mandates in the coming years.

Achieving these emission targets largely rests on whether hydrogen will be able to initiate an energy revolution across industry. One sector leading the way in this innovation is the automotive industry, where there have already been significant investments made in hydrogen technology.

While there is a great deal of optimism regarding how soon we’ll see these cars on our roads, that’s not to say the technology still doesn’t face serious hurdles. From issues around the efficiency of hydrogen fuel cells and electrolysers to logistical and infrastructural challenges around distribution and service stations: future success for the hydrogen industry is closely tied to automotive manufacturers, energy providers and governments investing in the advancement of hydrogen technologies and infrastructure to enable rapid and cost-effective innovation and, in turn, adoption of hydrogen-powered vehicles by consumers.

There are huge benefits to figuring out the hydrogen puzzle first – from lower air pollution and job creation, all the way up to true energy independence for nations. In this report, we examine the European automotive industry’s current perceptions of hydrogen energy and vehicles, looking specifically at leader responses from the UK, Germany and France.

We consider how these leaders believe the energy source will benefit their sector, the current state of investment in each region, and the hurdles they think the technology still needs to surmount before becoming a common sight on European roads.

1. The European auto industry is already on the road to hydrogen-powered vehicles

Governments around the world, along with businesses in the energy and automotive sectors, all consider hydrogen a big part of the solution when it comes to our environmental and economic challenges. That’s for one key reason – its potential to eliminate our reliance on finite and ecologically damaging substances, such as crude oil and coal.

The electrolysis of water (which is one way to create hydrogen) only requires electricity, which can already be generated through many carbon-neutral means. And when a fuel cell converts hydrogen into electricity, its only emissions are water vapour and warm air. That means hydrogen can both be produced and utilised without the creation of any additional carbon, and there’s virtually no risk of it ever running out.

As such, there’s broad agreement as to the environmental benefits of hydrogen power among European automotive leaders, with 84% of them agreeing that hydrogen will help their industry reduce its carbon emissions. And even when compared to electric cars, which are often viewed as the most sustainable automotive option commonly available, 77% of respondents still went as far as agreeing that hydrogen vehicles are greener.

However, while hydrogen vehicles may be objectively greener, the real question is: do automotive leaders believe their companies have the internal know-how to produce them? According to our respondents, the answer is a resounding yes Most agreed that they have both the skills to engineer clean (77%) and affordable (79%) hydrogen vehicles.

It’s this confluence of strong incentives and know-how that has led to the increased interest – and investment – in hydrogen technology that we’ve seen in recent years. And it’s important to remember, while zero emissions may be the strongest case for hydrogen vehicle development, with more than half (52%) of automotive leaders agreeing with this, there are other reasons why leaders are keen to switch to hydrogen as an alternative fuel source for vehicles.

One such benefit is the notion that hydrogen cars may enable a longer driving range on one tank, something 43% of European automotive leaders agree with. Hydrogen is also an incredibly efficient fuel – one kilogram of hydrogen generates nearly three times more energy than a kilogram of oil. So, if more efficient fuel cells are developed, it could reduce the amount of service station infrastructure that needs to be built to get adoption off the ground.

Another key consideration that is both an environmental and economic motivation is the reduced reliance on the rare materials needed to make batteries, something 42% of leaders agree with. Substances such as the lithium used in electric cars are limited and can only be found in a few countries. In fact, some predict that at our current rate of consumption, we could exhaust global lithium supplies by as early as 2025. Reducing our reliance on these kinds of materials as much as fossil fuels is a major incentive for the uptake of hydrogen-powered vehicles.

This is how automotive leaders from different countries rank their top three benefits of hydrogen vehicles:

Country  Lower emissionsLong range driving on one tankLess reliance on rare materials for batteries
Total52%43%42%
The UK51%47%48%
Germany  55%44%40%
France49%37%39%

The UK leads the way in optimism when it comes to relying less on rare materials (48%), while German leaders are the most positive about hydrogen’s ability to lower emissions (55%). French leaders appear to be the most cautiously hopeful overall but are similarly most optimistic about the lower emission levels that come with hydrogen.

Either way, it’s clear that European automotive leaders agree that hydrogen vehicles will be revolutionary for their sector. And from their responses, it also seems like many manufacturers are at least preparing for that energy revolution by ensuring they have the right internal skill sets to deliver hydrogen vehicles. The question is, how much investment is currently happening in hydrogen energy to bring it to the masses?

2. The State of play – investment already underway

Despite hydrogen-powered cars not yet being a mainstream reality across Europe, that doesn’t mean there isn’t a significant amount of investment already happening.

Our research shows that automotive leaders in France, Germany and the UK are already actively pursuing hydrogen-powered cars, with 70% of respondents saying they’re currently producing hydrogen vehicles or the components for them. Those investments also compare favourably with vehicles based on other fuel sources: as a proportion of total investment, our respondents said their spending on hydrogen vehicles (31%) is almost equal to that of electric vehicles (32%). This is significantly ahead of diesel (26%) and investments in other fuel types (11%).

While for most automotive manufacturers progress in hydrogen vehicles is already underway when considered at the country level, the split is more telling:

CountryHydrogen   Electric   Diesel   Other  
Total31%32%26%11%
The UK28%36%26%10%
Germany27%32%27%14%
France37%29%25%10%

Here we see the most noticeable contrast is between how much France is already committing to hydrogen compared to the UK or Germany. When considering the real-world progress in hydrogen vehicles France has already made, this should come as no surprise. For instance, in Paris, there are already 100 hydrogen taxis operating on the streets, with the goal of reaching 10,000 by 2024. While investments in the UK and Germany are trailing behind, they still suggest a healthy market albeit one not quite as mature as that in France.

Frédéric Ludet, Hydrogen Fuel Cell Expert at Expleo says: “Through our conversations with customers and partners, we’re seeing a substantial ramping up of investment across the ecosystem. In particular, there is a real effort to industrialise the development of parts such as fuel cells and auxiliary units to reduce their size, weight and costs. Moreover, there is a lot of work going into the advancement of the electrolyser technology which converts water into hydrogen to power vehicles: this will help improve the efficiency and sustainability of those parts. The investment companies are making today is an important step in the commercialisation of hydrogen-powered vehicles, bringing affordability and practicality to the point that will drive consumer demand.”

Investment from the industry is also being matched at a government level too. Other than net zero mandates that have been launched by the UK, France and Germany, there have also been specific plans around hydrogen drawn up by each.

France, which led the way a year earlier than the other two countries, launched its France Revival Plan 2030. This will see the nation invest up to seven billion euros by 2030 in hydrogen energy infrastructure, to increase its production of all the components needed to sustainably produce hydrogen from water.

More recently, the UK published its plans to develop a nationwide hydrogen economy, which it hopes will attract at least four billion pounds worth of investment to the country and create 100,000 new jobs by 2050. And in May 2021, the German government announced it will also be investing around eight billion euros in large-scale hydrogen projects.

These announcements will create a hospitable environment for hydrogen innovation and are crucial to the success of all automotive hydrogen plans, as any attempts to replace our current energy supply chain will require large-scale infrastructure changes, as well as subsidies to help get ventures off the ground.

3. Infrastructure and production – challenges to overcome

There might be a lot of optimism and investment in hydrogen technology right now, but there are still significant obstacles for automotive manufacturers and governments to overcome.

Production and engineering costs are the barriers to hydrogen vehicle adoption that the highest percentage of our respondents agreed with (40%). Despite the attention focused on the technology, it’s yet to fully mature, which is in line with another one of the top hurdles – the cost and complexity of scaling up hydrogen car production (33%).

When it comes to hydrogen power generally, we need to remember that the market is still young. While big steps have been taken, we’re still some way from maturity and so some challenges and concerns around production and scaling up of the technology remain. At the moment, production processes for parts such as fuel cells, air compressors and moisturisers have not been industrialised and as such these parts cannot be produced at scale. Likewise, the lack of infrastructure such as service stations is leading to a degree of caution from auto manufacturers.“This is not an overnight process and takes time – the industry can’t go from where it is now to mass-production of road-ready vehicles without taking the necessary steps on that journey to lower costs and scale-up. We potentially face a ‘chicken and egg’ scenario where hydrogen producers and auto manufacturers are waiting for one another to make that critical step that will see the market accelerate quickly and overcome those challenges,” says Frédéric Ludet.

The other half of the hydrogen puzzle is the large-scale infrastructure framework that needs to be built to facilitate the use of hydrogen cars in the first place. It’s no surprise that the second most commonly cited barrier to hydrogen vehicle adoption that automotive leaders point to is the limited number of service stations currently available (37%). For instance, in Paris where they have 100 hydrogen taxis on the road, they depend on just three service stations to function.

Part of this challenge is the current costs associated with producing hydrogen, something 36% of respondents agree with. However, it is these very concerns around service stations and energy production costs that those ambitious investment plans laid out by each country hope to address.

And while these plans were recently initiated and are set to span several years, it does mean that these nations are at least on their way to removing some of the fundamental obstructions to hydrogen car adoption.

1.Cost of vehicle production/engineering40%
2.Limited access to service stations37%
3.Cost of energy production36%
4.Cost and complexity of scaling up production33%
Top barriers to hydrogen adoption according to auto leaders

4. Conclusion – a positive 5-year outlook

Considering the feelings and beliefs our respondents shared with us, it’s fair to say the outlook for hydrogen cars is very positive. Automotive leaders are aware of, excited and eager for hydrogen-powered vehicles, with most of them already developing their own offerings, or at least the components for them.

That just leaves the overarching question: how far are we from seeing hydrogen cars on our roads? This, in essence, is a question of how quickly leaders believe the market will mature, and as we’ve seen with regards to the benefits of hydrogen, some leaders are more optimistic than others.

Half of all sector leaders we surveyed believe we are 24 months away from hydrogen cars being a commonplace sight on our roads. Around 60% of respondents also believe we’ll also see the first hydrogen fuelling station open in local markets within that time range, with 53% going as far as to say they believe hydrogen fuelling stations will be commonplace across Europe by then.

Where there is a roughly even split between those who believe the market will have matured in the coming two years and those who do not, there is strong agreement on the five-year outlook. The majority of our respondents are of the belief that five years is a more realistic timeframe for hydrogen vehicles to be seen on our roads every day (79%). And there’s even more consensus around it taking the same length of time for the first hydrogen fuelling station to open in local markets (85%), as well as being commonplace across the region (77%).  Here’s how regional leaders differ in their opinion of when hydrogen vehicles are likely to be commonplace on European roads:

CountryTotal  UK  Germany  France  
Within 24 months50%59%54%36%
Within five years79%83%82%72%

Once again, we see France leading the way in terms of pragmatism, with their automotive leaders less than two-thirds as likely to agree with the notion that hydrogen cars are 24 months away than UK leaders are. On the other hand, the fact that the majority of leaders across all regions are confident that hydrogen cars will be with us within five years still points to a very positive outlook for the industry.  

“Our eport corroborates the positivity around hydrogen-powered vehicles in the conversations we have with customers every day. That half of the people we surveyed believe hydrogen vehicles will be commonplace on roads within 24 months makes me positive the challenges the industry faces today around commercialisation will be overcome. However, we believe that within five years will be a more realistic timeline. Like any new industry, striking the balance between supply and demand is vital as it looks to reach critical mass. By 2026, we will be able to both develop hydrogen-powered vehicles that consumers find desirable and have the ecosystem of service stations and hydrogen production necessary to support them,” commented Frédéric Ludet.

Methodology

‘The Road to Hydrogen Cars – Creating a Greener Automotive Sector’ report is based on the views of 225 director level and above respondents from the automotive industry, split equally between the UK, France, and Germany. The survey was conducted by Opinium between 22nd September and 6th October 2021.

Expleo – ahead of the hydrogen curve

Expleo is a global consulting, engineering and technology service provider with over 40 years of heritage helping companies to fast track innovation. Through its experience collaborating with clients across sectors including aero, automotive, marine, rail and utilities, Expleo is well-positioned to support companies and industries in their transition to hydrogen power for a greener, more sustainable future. Today, the company is actively involved in a wide range of hydrogen power applications and R&D projects. Expleo experts are contributing across industries, including the integration of a hydrogen fuel cell and power train for a rally 4×4 to participate in the world-famous Dakar Rally and optimisation of electrolysers to extract green hydrogen from seawater.

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