Hydrogen fuel cell automobiles are set to end up being a significant gamer in China’s business truck market, forecasts JPMorgan’s Elaine Wu.
“Currently, the fuel cell vehicles account for less than 5% of the commercial truck market in China and that could grow to about one-third of total market share in 2050,” Wu, head of Asia ex-Japan ESG and energies research study at the company, informed CNBC’s “Squawk Box Asia” on Monday.
Fuel cell electrical automobiles work on electrical energy powered by hydrogen, which can can be utilized to save and provide energy stemmed from other sources. Hydrogen is a tidy fuel and when consumed in a fuel cell, produces just water.
One reason fuel cell automobiles are a “very good option” for the business truck market is because of their refueling time of just around 10 to 15 minutes, Wu stated. They likewise have a travel variety of around 800 kilometers, about 50% to 100% above lithium battery electrical automobiles.
Major car manufacturers such as Toyota, Honda and BMW are using the hydrogen fuel cell market.
China is currently promoting the promo of fuel cell automobiles, according to the JPMorgan expert.
“The [Chinese] federal government is promoting something, what we call ‘city clusters’ so that there might be demonstrative cities informing effective stories of how fuel cell automobiles are carried out in different parts of the nation,” Wu stated.
“This is also a policy that we saw implemented about a decade ago, when the central government was trying to produce lithium battery electric vehicles. And we saw how successful that was.”
Beijing has stated it would like 20% of brand-new automobiles offered to be brand-new energy automobiles by2025 Competition is intense in the domestic electrical car area, with Tesla contending versus the similarity homegrown gamers such as Nio and Xpeng.
China’s environment objectives
With China’s promise to end up being carbon neutral by 2060, hydrogen will likely contribute in heavy market as a tidy energy source, according to Wu.
“For this heavy industrial sector, high heat content is required and renewable power therefore is not a good option to fuel heavy industrial sector — but hydrogen is,” she stated.
The expert stated China leads the world in hydrogen production, and represent a 3rd of worldwide output.
“In the future, there could be promotion of green hydrogen production whereby renewable power is going to be used to produce hydrogen,” Wu included.
Hydrogen is presently produced from coal, and moving to green production will just be possible if eco-friendly power expenses continue to decrease, she included.
“What we’ve seen in the past 10 years is that the cost to produce solar power has dropped by 80% in China. The cost of wind power production has dropped by 40%,” she stated. “If this trend continues — and we believe that it will due to technology advancement — so that means that green hydrogen will be possible in the future when these things come into play.”
— CNBC’s Anmar Frangoul and Evelyn Cheng added to this report.
