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Chinese hydrogen companies pursue new possibilities amid numerous challenges

Commercial Vehicles

July 2024

Shirly Zhu

Shirly Zhu

Principal Analyst

Shirly has worked across multiple industry sectors in her 10+ year career, conducting projects requiring primary and secondary research, as well as quantitative and qualitative analysis. She’s primarily focused on Industrial Automation topics including motion and industrial controls.

As the flagship event of China’s hydrogen energy industry, the International Hydrogen Fuel Cell Vehicle Congress & Exhibition 2024 (FCVC 2024) attracted exhibitors from all parts of the industry chain, and official data shows a 10% and 20% increase in exhibitors and visitors respectively compared with last year.

This article briefly summarizes our analyst team’s observations and insights from the exhibition, and the full trade show report can be downloaded using the link at the end.

Trade show summary

 

1. The “Pilot City Cluster” program fails to meet market expectations

Due to various challenges – including cost, lack of infrastructure and market awareness – the promotion of hydrogen fuel cell vehicles is below expectations, resulting in relatively low market sentiment. While government-backed demonstration projects have played a positive role in market development, some urgent issues still need to be addressed; for example, the coherent development of the industry chain, and regional differences in the market.

2. Accelerating localization

From bipolar plates, MEA (membrane electrode assembly) and BoP (balance of plant) systems, to carbon fiber and storage tank valves, the localization of raw materials and components for hydrogen fuel cell and storage systems has intensified, driving down the cost of equipment substantially over the past two years, with a continuous price decrease expected in the future.

Chinese fuel cell systems tend to achieve high power levels, resulting in a certain degree of homogeneity and pricing competition. However, rather than continually pursuing lower prices, fuel cell companies have started to emphasize the importance of enhancing product stability, reliability and adaptability in practical applications.

3. Diversified hydrogen fuel cell applications

Hydrogen fuel cell applications such as drones, two-wheeled vehicles, marine craft, and so on have been unveiled, indicating a broadening range of applications for hydrogen technology, which may bring new growth prospects for the industry.

Stationary power generation was in the spotlight at the trade show, but the overall market is still in its early stages. Ensuring the economic viability and reliability of the market still requires technological maturity and policy support.

4. Increasing attention for green hydrogen production

Green hydrogen production has received widespread attention and was a major focus at the tradeshow. Many enterprises are deploying both PEM (polymer electrolyte membrane) and ALK (alkaline electrolyzer) technology routes, resulting in the development of related supporting industries.

5. Chinese vendors are actively going overseas

Chinese hydrogen enterprises are increasingly looking overseas to promote business growth. During our conversations, we heard representations from enterprises involved in the production of raw materials (e.g. MEA), fuel cell systems, and hydrogen and refueling equipment. Many of these talked about overseas market opportunities.

Trade show highlights

 

Hydrogen fuel cell companies targeting more diverse application scenarios

In addition to the mass installation of mainstream 80-150 kW fuel cell systems on vehicles, many companies also highlighted their high-power-rating systems and stacks (exceeding 200 kW), which are suitable for heavy-duty vehicles, ships, and stationary power generation. It is clear, beyond on-road applications, heavy-duty applications such as marine, construction machinery, and stationary power generation have become a focus of fuel cell manufacturers.

For marine use, Troowin exhibited the IonWave series of marine fuel cell systems with rated power up to 210 kW. Other manufacturers such as Hydrot, SHPT, and FTXT are also advancing their research projects on marine fuel cells.

For stationary power generation, Refire showcased a megawatt-scale fuel cell power station model, with practical projects already in place.

Alongside the development of heavy-duty fuel cells, low-power-rating fuel cells for light-duty applications – such as two-wheelers, drones, and forklifts – are also being launched.

Hydrogen Craft exhibited its new hydrogen-powered drone, equipped with proprietary air-cooled fuel cell stack. According to the introduction, this drone has been applied in power inspection. SHPT exhibited its 1.5 kW fuel cell system designed for two-wheelers (which has been mass-produced).

Accelerating the deployment for hydrogen production

Fuel cell system vendors started to move into hydrogen production by launching electrolyze products. Refire released its electrolyzer in August 2023 and displayed its PEM electrolyze model at this trade show. Other fuel cell suppliers, including SPIC Hydrogen, YC Simlan, BOSCH, and H-Rise are also making moves into the electrolyze market.

This also drives a surge in related equipment and raw material markets. BOSCH exhibited its brand-new PEM electrolyzer EST testing platform, while Dana, which participated in the trade show for the first time, displayed its metal and graphite bipolar plates, including metal bipolar plates (under development) for the PEM electrolyzer.

Type IV on-board hydrogen storage tanks are about to enter the market

The national standard for Type IV on-board tanks was officially released in 2023, and the type IV tank was a highlight in the hydrogen storage tank section of this trade show. Tank suppliers displayed Type IV tank products that have been certified or are about to be certified and launched to the market.

In our conversations, we found significant progress has been made in the localization of production of carbon fiber and tank valves in recent years. However, raw materials such as the steel for the bottle valve assembly and the plastic for the inner liner are still imported.

While 35MPa Type IV tanks may soon be commercially available, the practical application of 70 MPa hydrogen storage tanks still faces issues such as high costs and lack of infrastructure, etc.

Attempts are made for solid and liquid hydrogen storage solutions

Following its first trade show last year, Hydrexia once again presented its MgH2 solid-state hydrogen transportation solution. It was introduced as a second-generation product and is already available for commercial use.

Guofu debuted its on-board liquid hydrogen storage system– “漫步-1200”. With total volume of 1200L and weight of 1.2 tons. The company announced that it will continue to develop a new generation of liquid hydrogen systems. Meanwhile, Faurecia presented a low-temperature liquid hydrogen storage solution.

Integrated on-site hydrogen refueling stations are likely to increase

According to the recently released Global Hydrogen Refueling Stations report by Interact Analysis, China leads the world in the number of operational stations, surpassing Japan and South Korea combined. However, during our visit to FCVC 2024, we found that operational issues remain a major challenge in promoting hydrogen vehicles.

Censtar, making its first appearance, exhibited a duo-nozzle hydrogen dispenser (35 MPa and 70 MPa), skid-mounted stations, and an integrated hydrogen refueling cabinet (with a filling capacity of about 50 kg), catering to a range of different scenarios.

Given the high cost of storage and transportation, integrated on-site stations are likely to grow. HRS equipment providers are expanding their business to upstream hydrogen production. Leading Chinese hydrogen station equipment provider Guofu engages to provide PEM and ALK electrolyzers.

Visit our event page to download the FCVC Post-Show Report for free, or schedule a briefing call for detailed discussion with our analyst Shirly Zhu (shirly.zhu@interactanalysis.com ).

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