Hydrogen Energy Vehicles

Hydrogen energy vehicles, in a broad sense, refer to vehicles powered by hydrogen as an energy source, encompassing two primary technical routes: fuel cell electric vehicles (FCEV) and hydrogen internal combustion engine vehicles. At present, fuel cell electric vehicles have emerged as the mainstream direction owing to their higher energy conversion efficiency and zero-emission attributes. Their operating principle relies on an electrochemical reaction between hydrogen and atmospheric oxygen within the fuel cell stack to generate electricity directly to power the drive motor, with pure water being the sole tailpipe emission.

Operating Principle and Technical Highlights

The powertrain of a hydrogen fuel cell vehicle primarily comprises a fuel cell stack, hydrogen storage tanks, a traction battery, and an electric drive motor. The core reaction involves the electrochemical bonding of hydrogen and oxygen, which is essentially the reverse process of water electrolysis. In operation, hydrogen flows from the storage tanks into the fuel cell stack, where a catalyst (typically platinum) splits it into protons and electrons: protons traverse the proton exchange membrane to react with oxygen and form water, whilst electrons flow through an external circuit to generate electric current that drives the motor.

This technical pathway offers distinct advantages. Exceptional refuelling efficiency, with a full hydrogen fill taking just 3 to 5 minutes—on par with refuelling a conventional petrol or diesel vehicle. Outstanding driving range, where passenger cars generally deliver between 600 km and 850 km, whilst commercial vehicles can exceed 800 km. Robust environmental resilience, allowing the fuel cell system to cold-start smoothly at temperatures as low as -40°C while maintaining stable performance in high-altitude environments.

Current Industry Landscape

China has established itself as the world's largest market for fuel cell vehicles. By the end of 2025, the national fleet of hydrogen fuel cell vehicles approached 30,000 units, capturing 59% of global annual sales and taking the global top spot for the first time. The nationwide network of hydrogen refuelling stations reached 574 locations, maintaining the world's number one position for eight consecutive years. Key technical benchmarks in fuel cell systems and on-board hydrogen storage have attained advanced international standards, with local content for critical components like stacks and membrane electrode assemblies exceeding 70% to 80%.

Across application scenarios, commercial vehicles serve as the primary driver, predominantly deployed in heavy-duty haulage, cold-chain logistics, public buses, and municipal sanitation. Dongfeng Motor has put over 9,200 hydrogen fuel cell commercial vehicles on the road across 45 cities, whilst GAC Lingcheng completed deliveries of 340 hydrogen fuel cell units in early 2026. Conversely, hydrogen passenger cars have lagged significantly; series-production models such as the Toyota Mirai and Hyundai NEXO register negligible on-road numbers in the domestic market, and domestic offerings like the Deepal SL03 Hydrogen Edition have seen little follow-up development post-launch.

Key Challenges

The mass commercialisation of hydrogen energy vehicles continues to face several bottlenecks. Prohibitive costs remain the main hurdle. Although fuel cell system costs have dropped from RM15,000 to around RM2,000 per kW, overall vehicle purchase prices stay markedly higher than those of battery electric vehicles (BEVs) and ICE counterparts. For instance, an 8.5-metre city bus powered by a hydrogen fuel cell retails between RM1,500,000 and RM1,800,000—a premium of over 25% compared to a similarly sized BEV bus, and more than double the price of a diesel equivalent. Hydrogen fuel running costs are likewise steep; pump prices at refuelling stations nationwide hover between RM20 and RM80 per kg, leaving end-users paying RM30 to RM45 per kg even after subsidies—a figure that, despite trending downwards, remains higher than rates in Japan.

Severe infrastructure deficits. A total of 574 hydrogen refuelling stations pales in comparison to the multi-million-unit EV charging network. Furthermore, cross-regional regulatory standards lack uniformity—East China's approval timelines run roughly 40% longer than North China's, causing operational delays for several refuelling stations due to licensing bottlenecks. Policy transition also presents hurdles; 2025 marked the conclusion of the initial pilot city cluster scheme, and delayed disbursement of subsidy payouts strained corporate cash flows, resulting in a near 50% year-on-year drop in fuel cell vehicle output and sales during the first half of 2025.

Future Outlook

Heading into the 15th Five-Year Plan period, the hydrogen sector is entering a fresh policy window. In March 2026, three central authorities, including the Ministry of Industry and Information Technology, jointly issued the "Notice on Carrying Out Pilot Work for the Comprehensive Application of Hydrogen Energy", targeting a doubling of the national fuel cell vehicle fleet from 2025 levels to 100,000 units by 2030, alongside capping retail hydrogen prices below RM25 per kg. Several regional authorities have rolled out highway toll exemptions for hydrogen vehicles, with commercial operations such as the Hubei Hanyi Hydrogen Expressway cold-chain logistics route now running on a regular, routine basis.

Within the passenger car segment, BMW aims to roll out production hydrogen fuel cell models before 2028, with Hyundai and Toyota maintaining ongoing development programmes. Nevertheless, industry consensus holds that hydrogen fuel cell technology will deliver its most compelling, irreplaceable advantages in long-haul, heavy-duty commercial transport, whereas widespread adoption in passenger cars will require more time. The coming five years represent a pivotal window for the sector to scale up from pilot demonstrations to mass deployment, establishing a complementary dynamic alongside battery electric vehicles.