In the early 2000s, US President George W. Bush heralded hydrogen as the fuel that would revolutionize the automotive industry and ultimately move the United States toward energy independence. In his 2003 State of the Nation Address, Bush announced a $1.2 billion investment in hydrogen fuel technology, triumphantly declaring, "The first car driven by a child born today could run on hydrogen and be non-polluting." natural environment". The vision was bold, tapping into growing environmental awareness and the public's desire to reduce reliance on foreign imported oil. The optimism of the era was contagious, with major automakers and energy companies rallying behind this prediction that the future of their industries would be hydrogen-powered.

However, the high hopes of the time were met with a sobering reality. Despite over $2.5 billion directed by the government and significant private sector investment, hydrogen cars remain a rarity on the road. The production of hydrogen fuel itself has proven to be expensive and energy intensive, with over 95% of hydrogen still produced from natural gas, a process that emits significant amounts of carbon dioxide. In addition, the infrastructure needed to support hydrogen vehicles, such as pumps for this fuel, is scarce, with only about 60 public hydrogen stations in the US built from 2003 to 2023, mostly concentrated in the state of California. These challenges have severely limited the greater expansion of hydrogen vehicles over the past 20 years.

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As hydrogen cars struggle to gain such popularity and application, the average citizen interested in environmental innovation might simply ask, is it still possible to reverse this trend? Could further technological advances and renewed investment in this technology breathe new life into these projects and advance hydrogen technology?

With ongoing research into more efficient and sustainable methods of producing hydrogen, as well as the potential for advances in fuel cell technology, some experts argue that the age of hydrogen may be coming soon after all. With electric vehicles quickly becoming the standard bearer of green transportation, the question remains whether hydrogen can overcome its current challenges or remain a niche player in an increasingly electric-dominated market. For this reason, it is important to analyze the technology itself, what competition it has in the sphere of ecological solutions and whether governments with their programs and regulations can recognize hydrogen as a solution sometime in the future.

Technological opportunities and obstacles

Hydrogen vehicles, or hydrogen fuel cell vehicles (FCVs in English), operate using a fuel cell that converts hydrogen gas into electricity. The process involves passing hydrogen through a fuel cell where it reacts with oxygen from the air. This chemical reaction generates electricity, which drives the car's electric motor, with water vapor as the only by-product, making it an emission-free alternative. Unlike battery electric vehicles (also known as EVs for short), which store electricity in batteries, hydrogen cars produce electricity on command, providing the advantage of faster refueling similar to conventional gasoline vehicles.

However, expanding the use of hydrogen cars faces several significant obstacles, especially when compared to other environmentally friendly alternatives such as electric vehicles. One of the main challenges is the production and storage of hydrogen. Most hydrogen today is produced by processing natural gas, a process that emits significant amounts of CO2, negating some of its environmental benefits in the process. In addition, transporting and storing hydrogen requires high-pressure tanks and specialized infrastructure, which increases the complexity and cost of the entire deployment process. The lack of a widespread hydrogen refueling network is another major obstacle that limits the practicality of hydrogen cars for the average consumer, especially in regions where infrastructure is scarce, which is the vast majority of the world.

Despite the challenges facing hydrogen cars, the industry is pinning some of its hopes on the concept of so-called "green hydrogen" as its opportunity to revitalize this energy source. Green hydrogen is produced by electrolysis of water, using renewable energy sources such as wind, solar or hydropower, resulting in a truly zero-emission fuel. This method eliminates the carbon emissions associated with traditional hydrogen production from natural gas, addressing one of the key environmental criticisms of hydrogen as a fuel source. As the cost of renewable energy continues to fall and electrolysis technology improves, green hydrogen could become a more viable option for powering vehicles. The industry also hopes that green hydrogen has potential beyond the automotive industry, including applications in heavy industry, aerospace and energy storage, creating a broader market for hydrogen and potentially reducing costs through economies of scale. 

However, the widespread commercialization of green hydrogen faces significant obstacles that reduce its potential. The current cost of producing green hydrogen is still much higher than the cost of fossil fuel-derived hydrogen, making it economically uncompetitive without significant government subsidies or regulatory support. The efficiency of electrolysis, although improving, remains relatively low, meaning that large amounts of renewable energy are required to produce small amounts of hydrogen. This inefficiency raises concerns about the feasibility of green hydrogen's economies of scale, especially when considering the vast amounts of renewable energy needed to power other sectors such as power grids and industrial processes. Moreover, even if the production of green hydrogen becomes more feasible, the existing infrastructure challenges for storage, transportation and refueling remain large, especially in relation to other environmental competition such as electric vehicles.

Competition for hydrogen

Unlike hydrogen, electric vehicles have made remarkable progress in overcoming similar challenges. Over the past decade, the price of lithium-ion batteries, which power electric vehicles, has fallen by nearly 89%. That price has fallen from over $1,100 per kilowatt-hour in 2010 to around $132 per kilowatt-hour in 2023. This made electric vehicles more affordable and available to a wider consumer group than hydrogen vehicles.

In addition, the global network of electric vehicle charging stations continues to grow rapidly, with thousands of new stations being installed each year. Furthermore, the global network of electric vehicle charging stations has expanded rapidly, with over 2 million public charging stations available worldwide by the end of 2023, compared to only a few hundred hydrogen charging stations. This extensive infrastructure has made the use of electric vehicles increasingly convenient, further tipping the scales in favor of electricity over hydrogen over the past ten years.

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Electric vehicles also benefit from advances in renewable energy integration, making it increasingly possible to charge vehicles using clean energy sources such as solar or wind power. These factors have therefore positioned electric vehicles as the leading alternative to traditional fossil fuel vehicles, leaving hydrogen cars to struggle with a significant backlog.

The market success of different types of ecological vehicles was therefore very different in measurable figures. By 2023, sales of electric vehicles will exceed 10 million per year (with hybrids over 40,000,000 of them on the streets), representing approximately 14% of the global car market. That's a significant increase from just 2.5% in 2019. In contrast, hydrogen car sales have remained stagnant with less than 50,000 units sold worldwide since their introduction. In Sweden alone and in 2022 alone, 140,000 new electric vehicles and hybrids will be sold, which is more than double the entire existing hydrogen fleet in the world. In this sense, every year electric vehicles make a bigger difference in relation to their other ecological competition such as vehicles on sodium batteries or hydrogen, partly due to the policies of the governments.

Governments and programs

Governments around the world have historically favored electric vehicles over hydrogen-powered cars in their public policies mainly because of the faster and more tangible benefits these vehicles offer in terms of reducing emissions. One of the key reasons for this preference is the aforementioned reduction in the cost of battery technology, which has made electric vehicles more economically viable, because when battery prices began to drop significantly in the early 2010s, governments saw an opportunity to support a technology that is rapidly approaching market competitiveness. For example, in 2010, the US government launched a $2.4 billion investment in battery and electric vehicle manufacturing under the "American Recovery and Reinvestment Act," with the goal of accelerating the adoption of electric vehicles. Similar policies have been implemented in Europe and China, where governments have provided generous subsidies for electric vehicle buyers and invested heavily in charging infrastructure.

A key turning point came in the mid-2010s when global climate agreements, such as the 2015 Paris Agreement, increased the focus on immediate and scalable solutions to reduce carbon emissions. Electric vehicles, with their growing popularity and advancing technology, are seen as the most viable option to meet these ambitious goals faster than the competition. The European Union, for example, set strict standards for CO2 emissions that effectively encouraged car manufacturers to accelerate their development of electric vehicles, leading to an increase in production and sales. In contrast, hydrogen cars, which even then faced significant technological and infrastructural challenges, were seen as perhaps a solution in the distant future, but not in the immediate future. Consequently, governments have continued to prioritize electric vehicles in their environmental policies, providing further incentives such as tax breaks, grants and investments in charging networks.

The German, American and Chinese governments of course still offer large subsidies for the use of the mentioned "green hydrogen" that is produced through electrolysis, because they do not want to completely exclude this energy. New subsidies for this energy source are also defined in the new program of the Joe Biden administration, which was promoted after the COP28 world climate summit. However, in countries where ambitious environmental plans have already been voted, in the face of sudden reductions in the amount of available funds, funding for hydrogen projects was first on the cutting list from the environmental agenda.

The best example of this is Germany, where after the decision of the constitutional court on the unconstitutional allocation of public funds from the time of the COVID-19 pandemic, the government was ordered to reduce public spending. Of all the environmental measures that were subject to reduction, one of the first was the goal of providing financing for raising 10 GW of green hydrogen production capacity by 2030 and increasing the import of this energy source. In the same country, the previous year saw a 70% drop in the number of vehicle registrations on this drive, i.e. from 835 vehicles in 2022 to only 263 in 2023. 

The association of German taxpayers "Bund der Steuerzahler" therefore called for the abolition of subsidies for this type of vehicle and hydrogen filling stations in September 2023, estimating that at least 450 million euros have been spent on them since 2007, not including EU funds, which was a large consumption in relation to the number of these vehicles on the roads. Hydrogen has also lost out when it comes to German public transport and railways compared to batteries and electrification.

The Chinese government has also pursued aggressive policies, including significant subsidies for manufacturers and buyers of electric vehicles for years, and set ambitious targets for 25% of all car sales to be electric by 2025, while largely ignoring hydrogen vehicles. In this sense, this disparity is not only an issue of Western countries, but a global trend in government policies.

Opportunities for the future

In the competition between hydrogen cars and electric vehicles, the latter has definitely won, driven by significant advances in technology, infrastructure and government support. While hydrogen cars promised a revolutionary clean energy alternative in the early 2000s, the realities of high costs, infrastructure challenges and limited market penetration kept them on the sidelines. On the other hand, electric vehicles have benefited from rapidly falling battery costs, extensive global charging networks and significant government subsidies, making them a more practical and widely accepted green technology almost by consensus worldwide.

As mentioned, government policies played a key role in this outcome. Since the early 2000s, many governments, particularly in the US, Europe and China, have prioritized electric vehicles because of their immediate potential to reduce carbon emissions and improve energy efficiency. Policies such as tax breaks, direct subsidies and investment in charging infrastructure have made electric vehicles more affordable and attractive to consumers. The lobby for hydrogen-powered vehicles has not been strong enough and persuasive to legislators, although governments have earmarked funds for the development of hydrogen technology and still do so.

Looking ahead, while hydrogen may still play a role in the future of transportation, particularly through the development of green hydrogen, the overwhelming support for electric vehicles and industry decisions suggest that they will continue to dominate the market. A combination of technological advances, market favors and government support has created a momentum for electric voila that will be difficult to reverse. Hydrogen cars, despite their potential, are likely to remain a niche technology unless significant breakthroughs dramatically change the current balance of power.