Fuel Cells Market

Fuel Cells Market Outlook (2023 to 2033)

Global fuel cells market sales are predicted to reach a total of US$ 69.8 billion by 2033. In 2023, the market was approximated at around US$ 11.8 billion. It is likely to surpass a CAGR of 19.4% during the forecast period 2023 to 2033.

As per research conducted by Persistence Market Research (PMR), the proton exchange membrane division is set to lead the global market. It is likely to exhibit a CAGR of 19.1% during 2023 to 2033.

Increasing demand for clean energy alternatives to traditional fossil fuels will likely drive demand during the forecast period. Fuel cells provide sustainable options that can significantly contribute to mitigating climate changes.

Fuel cells have high energy efficiency, a long life span, and can operate in a wide range of conditions, making them attractive for various applications. Fuel cells have the potential to provide clean, efficient, and reliable power for a wide range of sectors. It finds crucial applicability in transportation, stationary power generation, and portable devices.

Transportation sector provides the prominent application for fuel cells, particularly the deployment of hydrogen powered vehicles. Fuel cell vehicles offer a zero-emission solution for transportation, with long driving ranges and fast refueling times.

Another key usage of fuel cells is in backup power systems for buildings and telecommunication networks. It is also used in portable devices such as laptops and mobile phones. The military and aerospace sectors are also exploring use of fuel cells for power generation in remote locations.

The market for fuel cell systems is projected to increase as a result of growing environmental concerns and strict regulations. North America and Europe are two regions particularly meticulous about their carbon emissions regulations. Notwithstanding the favorable regulatory environment, steadily falling costs of fuel cells due to technical improvements are also expected to drive demand.

Key Trends Driving Market Growth Listed by Persistence Market Research (PMR)

• Governments around the world have set ambitious sustainability targets to reduce greenhouse gas emissions and increase the use of clean energy sources, for which hydrogen fuel cells are a critical component.
• Demand for fuel cells as a reliable and efficient power source has been increasing, since they help in generating electricity with high efficiency and low emissions.
• Surging demand for decentralized power generation across the globe to provide reliable power in remote areas or during natural disasters can be met by using fuel cells.
• Transportation sector is expected to lead innovation in the fuel cells industry during the forecast period, primarily due to demand for efficient public transport options, as well as the superior performance offered over electric vehicles.

As technology and network infrastructure becomes more advanced, players from starkly varying sectors can end up with similar needs of uninterrupted on-site power generation; of which hospitals and data centers are key examples.

As fuel cells' demand increase in the transportation sector, North America is investing more towards their wide availability and supporting infrastructure. North America's industrial sector was dominated by the United States, which is a rapidly growing market for fuel-cell vehicles.

The promotion of hydrogen internal combustion engines is set to augment the power offered by fuel cells in vehicles. This is likely to provide manufacturers with significant growth opportunities. Competition with gasoline engines is anticipated to fare well for the fuel cells industry since new regulations are sharply disincentivizing the production and operation of internal combustion engine vehicles.

Factor Hampering Fuel Cells Sales:

• Fuel cells have some performance limitations such as low power density, slow response time as compared to other power source, which is likely to hinder growth during the forecast period.
• The infrastructure for producing, transporting, and storing hydrogen, which is used as a common fuel for fuel cells is underdeveloped in several parts of world.
• Hydrogen is flammable and requires special handling and storage procedures to ensure safety, leading to increased operating costs and complexity to mitigate security concerns.

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2018 to 2022 Fuel Cells Sales Outlook Compared to Demand Forecast from 2023 to 2033

As per Persistence Market Research (PMR), during the historical period, from 2018 to 2022, the fuel cell market expanded at 24.0% CAGR. In 2022, the sales stood at a worth of US$ 9.7 billion. The market is expected to top a revenue of US$ 69.8 billion by 2033.

Fuel cell systems are being developed to create combined heat and power (CHP) for lighting and heating small homes and businesses. It consists of lodging facilities, medical facilities, schools, and government structures. To encourage the integration of devices in multiple applications, several state and federal authorities have established supportive regulatory frameworks and financial schemes.

The need for renewable energy sources is also a key driver for the growth of the fuel cells industry. As the world becomes more conscious of climate change and its impacts, there is a growing push towards using clean forms of energy to reduce carbon emissions and improve air quality.

Increase in government support for fuel cell technology is a prominent driver for the market's growth. Several governments are investing in fuel cell research and development, offering tax incentives, and promoting the use of fuel cells through regulatory measures. This support is boosting the confidence of investors and driving up demand for fuel cell technology.

Market participants have seen an array of public-private partnerships emerge in recent years to coordinate activity among stakeholders and get funding. Various measures are being done to shoulder the financial risk by fuel cell producers, oil and gas providers, and automakers in order to successfully launch hydrogen fuel cell-powered vehicles.

The automotive sector is also heavily focusing on hydrogen internal combustion engines (HICE) to generate additional power for vehicles running solely on fuel cells. They are lucrative options when compared to electric vehicles since the latter are still limited by factors like driving range, public infrastructure and being underpowered.

HICE combined with fuel cells are anticipated to drive heavy growth in the automotive industry through 2033, consequently ramping up demand for fuel cells.

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Country-wise Insights:

What makes the United States a Highly Lucrative Market for Fuel Cells?

The fuel cells market in the United Sates is projected to reach a valuation of US$ 14.1 billion in 2033. The absolute $ opportunity for the market during the forecast period is estimated at around US$ 11.7 billion.

Fuel cells industry in the United States increased at 23.9% CAGR between 2018 and 2022. It is further likely to surge at 19.3% CAGR from 2023 to 2033.

One of the main drivers for the fuel cells market in the United States is the push for clean and more sustainable energy sources. With various federal and state incentives, as well as mandates for lower emissions, many industries and businesses are turning to fuel cells as a viable option.

The country has a well-established infrastructure for hydrogen fueling stations, further boosting the adoption of fuel cells. As a result, the United States is currently a significant player in the global fuel cells industry and is expected to maintain a prominent position in the future.

How Large is the Market Opportunity for Fuel Cells in China?

China fuel cells industry is poised to hold a valuation of at least US$ 17.4 billion by 2033. It is projected to offer an absolute $ growth opportunity of US$ 14.4 billion during 2023 to 2033. Sales are likely to expand at a 19.4% CAGR between 2023 and 2033. During the historical period, from 2018 to 2022, it exhibited a CAGR of 23.8%.

China's significant shares in the fuel cells industry can be attributed to their efforts to combat pollution and promote sustainable development. The government has implemented policies and initiatives to increase the adoption of fuel cell technology, particularly in sectors like transportation and power generation.

The country has a strong manufacturing sector and is home to some of the leading fuel cell producers, contributing to their dominance in the market. With China's commitment to reducing carbon emissions and transitioning to a clean energy future, the demand for fuel cells is expected to accelerate in the forthcoming ten years.

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Category-wise Insights:

Why is Proton Exchange Membrane Expected to Dominate the Fuel Cell Industry?

By type, proton exchange membrane (PEM) grew at a CAGR of 22.7% during the historical period 2018 to 2022. It is likely to exhibit a CAGR of 19.1% during the forecast period 2023 and 2033.

PEM fuel cell solutions are suitable for a wide range of sectors, from stationary fuel cell power generation to transportation. PEM fuel cells have a high power density and can operate at low temperatures, making them a highly practical option compared to other types of fuel cells.

As the demand for clean energy solutions continues to rise, the PEM fuel cell market is expected to experience substantial growth in the upcoming decade.

Which Fuel Cell Application Gain Momentum in the Global Market?

By application, the stationary division is projected to increase at a CAGR of 19.2% from 2023 to 2033. Demand for stationary fuel cells expanded at a CAGR of 22.4% between 2018 and 2022.

Stationary fuel cells have a crucial role to play in providing power to homes and commercial buildings, as they offer an efficient and reliable source of electricity. The growth of the stationary fuel cells market can be attributed to the increasing demand for off-grid and backup power solutions.

Advancements in fuel cell technology have led to increased efficiency and reduced costs, making them an attractive option for the stationary power sector. As a result, stationary fuel cells are expected to continue their growth trajectory in the global market.

Zaid Sheikh
Client Partner

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Competitive Landscape:

The key player in the market are Ballard Power Systems, Inc.; Bloom Energy Corporation; Altergy Systems; Ceres Power Holdings PLC; AFC Energy PLC, Arcola Energy Ltd., Antig Technology Co. Ltd., BayoTech Inc.

These businesses have established themselves as significant producers and have concentrated on research and development to provide fuel cell technology for automobiles that is both efficient and affordable.

Some of the primary tactics used by market participants include mergers and acquisitions, partnerships, and product launches.

Recent Developments:

• In January 2023, Adani Enterprises Ltd. (AEL), a company within the extensive Adani portfolio, secured a contract to start a pilot program to create a fuel cell electric truck (FCET) that runs on hydrogen for transportation and logistics of mining operations.
• In March 2023, FuelCell Energy Inc. announces the launch of a platform for fuel cells and solid oxide electrolysis. To enhance the management and flexibility of energy investments.
• In August 2022, Bosch has announced a US$ 200 million commitment to develop fuel cell stacks in Anderson. Bosch's expertise in commercializing technologies will enable fuel cell stack mass manufacturing.

Scope of the Report:

Global Fuel Cells Market segmentation:

By Type:

• Proton Exchange Membrane
• Phosphoric Acid
• Molten Carbonate
• Solid oxide
• Others

By Application:

• Stationary
• Transportation
• Portable

By Region:

• North America
• Latin America
• Europe
• Asia Pacific
• Middle East and Africa