Fuel Cell Market Size, Share, and Growth Forecast for 2024 - 2031

Fuel Cell Market Size and Share Analysis

The global fuel cell market is projected to witness a CAGR of 20.5% during the forecast period from 2024 to 2031. It is anticipated to increase from US$ 3.7 Bn recorded in 2024 to a decent US$ 13.8 Bn by 2031.

Rising demand for Electric Vehicles (EVs) and robust government support for clean energy initiatives drive the global market. Several initiatives to reduce the carbon footprint are enticing various industries toward the use of fuel cells.

In 2023, around 14 governments signed a joint declaration to establish an International Hydrogen Trade Forum through the G20 summit in Goa, India. This forum aims to facilitate dialogue between hydrogen-importing and exporting countries. It also helps promote the international trade of hydrogen. Similar initiatives are anticipated to create new growth opportunities for market participants.

Key Highlights of the Market

• Rising demand for zero-emission vehicles is projected to drive the fuel cell market.
• Increasing regulatory pressures and commitments to reduce carbon emissions, particularly in regions like the European Union (EU) and the U.S. are pushing demand.
• Emerging applications of fuel cells in mobile power backup systems are set to create new opportunities for market participants.
• In terms of product type, proton exchange membrane fuel cells are anticipated to witness a CAGR of 20.3% through 2031 with high demand from the transportation sector.
• Solid oxide fuel cells are set to witness a CAGR of 2.4% through 2031 amid their superior fuel flexibility.
• Based on application, the transportation segment is projected to showcase a CAGR of 20.2% through 2031.
• In North America, the U.S. is estimated to dominate with a CAGR of 19.7% through 2031.
• East Asia is anticipated to showcase a CAGR of 21.2% through 2031 amid favorable government policies and rising interest in hydrogen production.

Market Attributes	Key Insights
Fuel Cell Market Size (2024E)	US$ 3.7 Bn
Projected Market Value (2031F)	US$ 13.8 Bn
Global Market Growth Rate (CAGR 2024 to 2031)	20.5%
Historical Market Growth Rate (CAGR 2019 to 2023)	-5.8%

Surging Clean Energy Initiatives in East Asia to Augment Demand

East Asia leads the global fuel cell market, holding a 50% share in 2024, with China contributing over 60% of the region’s market. The region is projected to witness a CAGR of 21.2% through 2031. This growth is driven by the rising adoption of EVs and robust government support for clean energy initiatives.

• According to the International Energy Agency (IEA), global EV sales are projected to reach 17 million in 2024, representing over 20% of total car sales.
• It reflects a 25% increase in EV sales in early 2024 compared to the same period in 2023.
• Regional projections indicate EVs will account for 45% of sales in China, 25% in Europe, and over 11% in the U.S., further boosting demand.

Apart from the transportation sector, hydrogen fuel cell technology is accelerating. For instance,

• In 2024, Toshiba Energy Systems and Solutions Corporation received an order for a 500 kW H2Rex™ pure hydrogen fuel cell system from Tanaka Kikinzoku Kogyo K.K.
• The system, Japan’s largest commercial pure hydrogen fuel cell deployment, will be installed at Tanaka’s Shonan Plant in Kanagawa Prefecture.
• Comprising five 100 kW units, the system has undergone extensive testing under the Ministry of the Environment programs, with delivery scheduled for March 2026.

PEM Fuel Cells Dominate due to High Flexibility and Lightweight Design

Proton Exchange Membrane (PEM) fuel cells are set to dominate the market, showcasing a strong CAGR of 20.3% through 2031. The segment will likely hold a share of around 90% in 2024.

The rising demand stems from several advantages, including flexibility in input fuel, compact and lightweight design, cost-effectiveness, and a durable electrolyte. These features make PEM fuel cells a preferred choice over other types, bolstering their market dominance.  For instance,

• In 2024, Plug Power initiated the technical evaluation phase for a 25 MW PEM electrolyzer project in collaboration with Dourogás and CapWatt.
• The project, targeting the production of 80,000 tons of methanol annually, underscores the rising adoption of PEM technology and its potential to support large-scale energy and chemical applications.

Transportation Sector Seeks High-quality Fuel Cells for Smooth Operation

The transportation segment leads the market with an approximate 80% share in 2024, driven by the growing global shift toward clean transport solutions. The segment is likely to witness a CAGR of 20.2% through 2031.

Increasing investments in emission-free initiatives across several countries bolster the segment. Fuel cells offer versatile applications, including material handling to enhance efficiency in warehouses and manufacturing facilities. These are also used in e-mobility, where they power delivery fleets, airport operations, long-haul trucks, and maritime activities.

• In 2023, Doosan Fuel Cell collaborated with Kolon Global to develop a hydrogen fuel cell business model using biogas.
• Under this partnership, Doosan Fuel Cell manages the hydrogen fuel cell supply and Long-Term Maintenance (LTSA).
• Kolon Global oversees fuel supply, EPC, and the development of piping infrastructure, accelerating eco-friendly energy solutions.

Market Introduction and Trend Analysis

The fuel cell market is set for substantial growth in the coming decade, pushed by the increasing adoption of zero-emission vehicles and the global shift toward clean energy solutions. Advances in fuel cell technology, such as improved efficiency, durability, and power density, are fueling this growth. Key innovations in Proton Exchange Membrane (PEM), solid oxide, and alkaline fuel cells are reshaping the market landscape.

Industrial applications of fuel cells are also on the rise, highlighted by Japan's Ene-Farm program, which installed 42,877 micro-CHP units in 2022. In contrast, Europe’s micro-CHP market faces challenges due to funding reductions and geopolitical disruptions like the Ukraine crisis.

Large-scale fuel cells for prime power and industrial CHP are gaining traction. Shipments had reached 325 MW in 2022, driven by companies like Bloom Energy and Doosan Fuel Cell. 

Historical Growth and Course Ahead

The global fuel cell industry experienced a CAGR decline of -5.8% from 2019 to 2023, impacted by global disruptions like the COVID-19 pandemic and the Russia-Ukraine conflict. Additionally, technological limitations hampered market growth until 2022. However, the industry is now gaining momentum, particularly in logistics and freight transport, where demand for sustainable, low-emission solutions is rising.

Fuel Cell Vehicles (FCVs) are emerging as a preferred choice for long-haul operations due to their zero emissions, extended range, and faster refueling compared to battery electric vehicles. Expansion of hydrogen infrastructure, bolstered by government incentives, is further driving the integration of FCVs into logistics fleets.

Technological developments are reducing production costs, making fuel cells increasingly attractive to businesses seeking green practices. Companies are striving to meet regulatory standards and address consumer demands for sustainability. Fuel cells are hence playing a transformative role in reshaping the logistics and freight transport sectors. This shift positions the market for a strong rebound and sustained growth in the next ten years. For instance,

• In 2023, FuelCell Energy, Inc. and Toyota Motor North America announced the completion of Tri-gen system at Toyota's Port of Long Beach operations. Tri-gen is an example of FuelCell Energy's ability to scale hydrogen-powered fuel cell technology.

Such innovative strategies are set to foster demand for fuel cells over the forecast period. The global market is estimated to record a CAGR of 20.5% during the forecast period between 2024 and 2031.

Market Growth Drivers

Rising Demand for Electric Vehicles Globally to Push Sales

The global fuel cell industry is experiencing substantial growth driven by the rising adoption of Electric Vehicles (EVs) and robust governmental support for clean energy initiatives. For example,

• According to the International Energy Agency (IEA), global electric car sales are projected to represent more than 20% of total car sales in 2024.
• Supporting this trend is the EV20@30 campaign, which targets a minimum of 30% new electric vehicle sales by 2030.
• Countries such as Canada, Japan, France, and Norway are actively working to enhance the deployment of EVs, recognizing the key role it plays in carbon reduction.

Increasing competition among automakers is bolstering innovation and efficiency, leading to declining battery prices and improved vehicle affordability. Fuel cells are pivotal in various emerging EV technologies. Hence, their importance in the transition to sustainable energy systems is becoming increasingly evident, further propelling market growth. For instance,

• In 2024, Ballard Power Systems launched the high-performance FCmove®-XD fuel cell engine, including the first public demonstration of its 240kW configuration.

Regulatory Pressures and Environmental Commitments to Boost Growth

The global fuel cell market is propelled by rising regulatory pressures and commitments to reduce carbon emissions, particularly in regions like the European Union (EU) and the U.S.

• According to the International Energy Agency’s Global Energy Review 2021, CO2 emissions in the EU fell by 2.4% in 2021, maintaining an average annual reduction of 3% since 2010.
• The steady decline underscores the EU’s dedication to sustainability, augmenting demand for clean energy technologies such as fuel cells. 

In the U.S., regulatory initiatives are accelerating the transition to clean energy. In March 2024, the Environmental Protection Agency (EPA) introduced strict emissions standards for light- and medium-duty vehicles, effective from the 2027 model year. These regulations, building on earlier greenhouse gas limits, aim to reduce air pollutants. At the same time, these focus on improving public health and lowering climate issues while saving drivers on fuel and maintenance costs. 

Global collaborations are further pushing the development of hydrogen technology. For instance,

• In 2024, Thermax partnered with Ceres to scale green hydrogen production in India through large-scale manufacturing of Solid Oxide Electrolysis (SOEC) systems. Under a global licensing agreement, Thermax will manufacture, sell, and service SOEC-based stack array modules, leveraging Ceres’ unique technology to meet rising clean energy demands.

Market Restraining Factors

Limited Availability of Hydrogen Infrastructure to Hamper Growth

The fuel cell market faces significant constraints, particularly due to the limited adoption of hydrogen in emerging applications. The U.S. Department of Energy has invested US$ 7 Bn in clean hydrogen hubs. However, most hydrogen production still supports traditional sectors like refining and chemicals, which depend heavily on unabated fossil fuels. This reliance undermines the environmental advantages of hydrogen, hindering its potential to contribute to carbon neutrality.

In Europe, the Fuel Cells and Hydrogen Joint Undertaking forecasts that hydrogen could supply around 24% of the region’s total energy consumption by 2050. However, achieving this vision depends on overcoming infrastructure challenges and broadening the use of hydrogen technologies beyond established applications.

Sectors such as heavy industry and transport currently account for less than 0.1% of global hydrogen demand, revealing a significant gap. Significant role of hydrogen in these areas is essential for unlocking its full potential and driving market growth.

Key Market Opportunities

Growth in Fuel Cell Application beyond Transportation to Create Opportunities

The fuel cell industry is experiencing notable growth opportunities, particularly in mobile applications. Beyond traditional uses like telecommunications backup, there is a rising demand for large mobile systems designed for events and construction. According to Environmental Resources Management (ERM), these systems incorporate mobility features such as wheels or lift hoists, enabling broader applications beyond stationary setups. 

While hydrogen fuel's high costs and logistical challenges remain obstacles, surging interest in portable solutions reflects a technology-driven market shift. For instance,

• Shipments of portable fuel cells, including Auxiliary Power Units (APUs) under 20 kW, increased from over 6,000 units in 2021 to nearly 8,000 in 2022, signaling rising adoption. 

The units primarily serve industrial and consumer markets in Europe and North America, fostering innovation and efficiency improvements in fuel cell technology. As stakeholders focus on developing adaptable and versatile solutions, mobile applications are emerging as a key area of growth, paving the way for market growth in the next ten years.

Competitive Landscape for the Fuel Cell Market

The global fuel cell industry is in a rapid growth phase, driven by continuous innovation and increasing investment from both established and emerging players. Companies are accelerating fuel cell technologies by improving efficiency, durability, and power density, fueling supply-side growth. Substantial developments in solid oxide, Proton Exchange Membrane (PEM), and alkaline fuel cells are shaping the competitive landscape.

Emerging players are actively investing in hydrogen and fuel cell innovations. Global leaders are collaborating with regional technology providers to enhance efficiency and extend market penetration.

To meet growing demand, manufacturers such as Plug Power and Bloom Energy are extending production capacity with new facilities and automated lines. They are focusing on commercial and industrial applications. However, growth remains uneven and influenced by national policies, emphasizing the need for robust support to drive widespread adoption.

Recent Industry Developments

• In May 2024, Japan-based Mitsubishi Electric Mobility and AISIN reached a basic agreement to establish a joint venture company for handling products for next generation EVs. The joint venture will offer new and attractive products to a wide range of customers. It would help in maximizing the synergy of Mitsubishi Electric Mobility’s traction motors, power converters, and control optimization technologies, as well as boost AISIN’s integration technology.
• In September 2024, Germany-based EKPO Fuel Cell Technologies GmbH, a leading full-service supplier of PEMFC stack modules and components, started focusing its business on hydrogen mobility in the commercial vehicle segment. Delivering up to 400 kW, it is EKPO’s most powerful model yet and has been designed particularly with heavy-duty applications in mind.
• In August 2024, California-based Bloom Energy announced a hydrogen solid oxide fuel cell with 60% electrical efficiency and 90% high-temperature combined heat and power efficiency.
• In June 2023, Cummins Inc., based in Indiana, announced the buyout of Air Liquide’s 19% interest in Hydrogenics Corporation. The former acquired Hydrogenics in 2019, adding key fuel cell and electrolyzer technologies to its portfolio. Cummins’ buyout reinforces its commitment to these technologies and the increasing importance they will play in creating value for all stakeholders and decarbonizing the world.

Market Segmentation

By Product Type

• Proton Exchange Membrane
• Solid Oxide
• Molten Carbonate
• Phosphoric Acid
• Alkaline
• Others

By Application

• Stationary Power Generation
• Transportation
• Portable Power

By Region

• North America
• Europe
• East Asia
• South Asia and Oceania
• Latin America
• The Middle East and Africa

Companies Covered in Fuel Cell Market Size, Share, and Growth Forecast for 2024 - 2031

• AISIN Corporation
• Cummins Inc.
• Mitsubishi Heavy Industries
• Toshiba Corporation
• KYOCERA Corporation
• Fuji Electric Co Ltd
• ElringKlinger AG
• Bloom Energy
• Plug Power Inc
• Doosan Fuel Cell Ltd
• SFC Energy AG
• FuelCell Energy Inc
• Ballard Power System
• Ceres Power
• Solid Power