The first four months of 2023 saw almost 1,000 (973) fuel cell commercial vehicles registered in China, up 110% year-on-year.
Strong growth continued in the fuel cell commercial vehicle market in China during the four months to April 2023, with 973 registrations over the period. Interact Analysis’s Monthly Update for China New Energy Bus and Truck Market shows an increase of 110% in the number of registrations compared with the same four months of 2022. Apart from a dip in sales between March and May 2022 due to the impact of the Covid-19 pandemic, sales of fuel cell commercial vehicles in China have demonstrated robust growth since September 2021. Following a leap in registrations of fuel cell commercial vehicles in June 2022 to 510 units, representing a year-on-year increase of 795%, monthly sales have remained above 100 units ever since.
Trucks Lead Sales of Fuel Cell Commercial Vehicles
Buses used to be the dominant commercial vehicle type for fuel cell technology, accounting for 90% of overall registrations of fuel cell commercial vehicles in 2020. However, this dropped to 56% in 2021 and registrations of fuel cell trucks increased dramatically in 2022 – far exceeding sales of buses – to account for 74% of total units. The rollout of government policies to promote fuel cell vehicles with a focus on heavy-duty commercial vehicles have helped to drive up truck sales. It is worth noting that fuel cell heavy-duty trucks – mainly towing vehicles and dump trucks – became the dominant vehicle type in the market, accounting for about 51% of total fuel cell commercial vehicle sales in 2022. In the meantime, sales of fuel cell light-duty trucks also increased substantially in 2022, exceeding 800 units, or around 17% of total sales units. From January to April 2023, fuel cell heavy-duty and light-duty trucks accounted for 31% and 21% of total sales units respectively.
According to data published as part of the Chinese Ministry of Industry and Information Technology’s Announcement of On-Road Motor Vehicle Manufacturers and Products (357th – 370th lists), the number of new announcements about fuel cell trucks is greater than for fuel cell buses. The Ministry publishes its announcement each month, detailing vehicle manufacturers applying for the assessment of new products, including information about new energy vehicles by powertrain type (e.g. battery electric, plug-in hybrid, fuel cell). In the 358th and 364th lists, 100% of new fuel cell CV models were fuel cell trucks, while in the 367th and 368th lists fuel cell trucks accounted for more than 90% of total new vehicle models, and fuel cell trucks accounted for more than 50% of new models in the remaining 10 lists.
Policy Support and Suitable Application Scenarios Driving Rapid Growth of Fuel Cell Trucks
The explosive growth of the fuel cell truck market over the past two years is in large part the result of favourable government policies and promotion of suitable application scenarios.
Government policies explicitly outlined the roadmap for the development of fuel cell vehicles.
In September 2020, China’s Ministry of Finance, Ministry of Industry and Information Technology, Ministry of Science and Technology, Development and Reform Commission, and National Energy Administration jointly issued the Notice on Launching Fuel Cell Vehicle Demonstration projects. This signalled the intention to adopt a method of ‘reward instead of subsidy’ in a cluster of pilot cities, in order to encourage the roll out of demonstration applications of fuel cell vehicles. It supported promotion of fuel cell commercial vehicles, with a special focus on medium and long-distance, medium- and heavy-duty commercial vehicles. In addition, the Notice on Starting the Demonstration Application of Fuel Cell Vehicles, issued by the five ministries and commissions in August 2021, directly paved the way for industry players to expand into this market. Many local governments introduced corresponding policies, subsidies and implementation measures to promote the development of the hydrogen industry in a range of ways, including implementing pilot projects of fuel cell heavy-duty trucks and buses, expanding the deployment of hydrogen refuelling stations, and fostering the development of fuel cell batteries.
Suitable application scenarios accelerate the use of fuel cell trucks.
Fuel cell vehicles have significant advantages over battery electric vehicles, such as longer mileage range and fast refuelling. Currently, the application of fuel cell vehicles in China is primarily focused on heavy-duty transportation scenarios, which require long-distance, high-frequency, high-payload journeys, and have seen a pressing need for energy conservation and emission reduction, for example in the mining, steel and port industries. In these application scenarios, hydrogen fuel cell technology is adopted for heavy-duty towing vehicles and dump trucks. Additionally, in the case of light-duty cold-chain logistics vehicles with high-electricity demand for refrigeration equipment, battery electric solutions are currently unable to meet daily operational requirements, making hydrogen fuel cells a better choice. Data shows that, in 2022, cold-chain logistic vehicles accounted for over 70% of total sales of hydrogen fuel cell light-duty vehicles.
A significant increase of fuel cell vehicle OEMs, intensifying market competition
With the fuel cell commercial vehicle market taking off, the supplier landscape becomes more and more dynamic. Firstly, a growing number of OEMs entered the market. According to our monthly tracker data a total of 23 OEMs were engaged in the sale of fuel cell commercial vehicles in 2022, increasing to 30 in 2021. By the end of 2022, 40 OEMs had registration sales of fuel cell buses and trucks in China.
Secondly, the market concentration is relatively high, but competition intensifies because of the increasing number of new entrants. In 2020, the top 10 OEMs together accounted for an 89% market share, but this figure declined to 84% in 2021, and dropped further to 78% in 2022. During the January to April period of 2023, a total of 22 OEMs sold fuel cell commercial vehicles, with the top 10 OEMs accounting for 84% of total sales.
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