Fuel cell vehicles set for gains in China truck market

Hydrogen gasoline cell vehicles are established to turn into a significant participant in China’s commercial truck market, predicts JPMorgan’s Elaine Wu.

“At the moment, the fuel mobile autos account for considerably less than 5% of the business truck market in China and that could expand to about one-3rd of complete current market share in 2050,” Wu, head of Asia ex-Japan ESG and utilities exploration at the organization, explained to CNBC’s “Squawk Box Asia” on Monday.

Fuel cell electrical cars operate on electricity driven by hydrogen, which can can be utilized to keep and produce vitality derived from other resources. Hydrogen is a clean up fuel and when consumed in a gas mobile, makes only water.

Just one reason why fuel cell motor vehicles are a “very fantastic possibility” for the commercial truck market is owing to their refueling time of only around 10 to 15 minutes, Wu said. They also have a journey assortment of all-around 800 kilometers, about 50% to 100% previously mentioned lithium battery electrical vehicles.

Major automakers such as Toyota, Honda and BMW are tapping into the hydrogen fuel cell market.

China is by now pushing for the promotion of gas cell motor vehicles, according to the JPMorgan analyst.

“The [Chinese] federal government is advertising and marketing some thing, what we connect with ‘city clusters’ so that there could be demonstrative metropolitan areas telling productive tales of how gasoline mobile automobiles are applied in numerous sections of the nation,” Wu mentioned.

“This is also a plan that we noticed executed about a ten years ago, when the central federal government was seeking to produce lithium battery electric powered motor vehicles. And we saw how thriving that was.”

Beijing has stated it would like 20% of new vehicles sold to be new power vehicles by 2025. Levels of competition is intense in the domestic electrical vehicle place, with Tesla competing against the likes of homegrown players these types of as Nio and Xpeng.

China’s weather ambitions

With China’s pledge to become carbon neutral by 2060, hydrogen will very likely engage in a function in major market as a clean up strength source, according to Wu.

“For this weighty industrial sector, large heat written content is necessary and renewable electricity consequently is not a great alternative to gasoline heavy industrial sector — but hydrogen is,” she mentioned.

The analyst claimed China potential customers the entire world in hydrogen manufacturing, and accounts for a 3rd of world output.

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“In the future, there could be marketing of inexperienced hydrogen output whereby renewable electrical power is heading to be utilized to create hydrogen,” Wu added.

Hydrogen is at present produced from coal, and shifting to eco-friendly output will only be attainable if renewable energy expenses carry on to drop, she additional.

“What we have viewed in the past 10 several years is that the expense to make solar energy has dropped by 80% in China. The value of wind electricity production has dropped by 40%,” she stated. “If this development carries on — and we believe that it will because of to engineering improvement — so that suggests that environmentally friendly hydrogen will be possible in the future when these points come into enjoy.”

— CNBC’s Anmar Frangoul and Evelyn Cheng contributed to this report.