Hydrogen gas cell automobiles are set to turn into a serious participant in China’s industrial truck market, predicts JPMorgan’s Elaine Wu.
“At present, the gas cell automobiles account for lower than 5% of the industrial truck market in China and that would develop to about one-third of whole market share in 2050,” Wu, head of Asia ex-Japan ESG and utilities analysis on the agency, informed CNBC’s “Squawk Field Asia” on Monday.
Gasoline cell electrical automobiles run on electrical energy powered by hydrogen, which might can be utilized to retailer and ship vitality derived from different sources. Hydrogen is a clear gas and when consumed in a gas cell, produces solely water.
One purpose why gas cell automobiles are a “excellent choice” for the industrial truck market is because of their refueling time of solely round 10 to fifteen minutes, Wu mentioned. In addition they have a journey vary of round 800 kilometers, about 50% to 100% above lithium battery electrical automobiles.
China is already pushing for the promotion of gas cell automobiles, based on the JPMorgan analyst.
“The [Chinese] authorities is selling one thing, what we name ‘metropolis clusters’ in order that there may very well be demonstrative cities telling profitable tales of how gas cell automobiles are applied in numerous elements of the nation,” Wu mentioned.
“That is additionally a coverage that we noticed applied a few decade in the past, when the central authorities was attempting to provide lithium battery electrical automobiles. And we noticed how profitable that was.”
Beijing has mentioned it could like 20% of recent automobiles bought to be new vitality automobiles by 2025. Competitors is fierce within the home electrical automobile house, with Tesla competing towards the likes of homegrown gamers reminiscent of Nio and Xpeng.
With China’s pledge to turn into carbon impartial by 2060, hydrogen will doubtless play a task in heavy business as a clear vitality supply, based on Wu.
“For this heavy industrial sector, excessive warmth content material is required and renewable energy due to this fact isn’t a superb choice to gas heavy industrial sector — however hydrogen is,” she mentioned.
The analyst mentioned China leads the world in hydrogen manufacturing, and accounts for a 3rd of worldwide output.
“Sooner or later, there may very well be promotion of inexperienced hydrogen manufacturing whereby renewable energy goes for use to provide hydrogen,” Wu added.
Hydrogen is at present produced from coal, and shifting to inexperienced manufacturing will solely be attainable if renewable energy prices proceed to say no, she added.
“What we have seen prior to now 10 years is that the associated fee to provide solar energy has dropped by 80% in China. The price of wind energy manufacturing has dropped by 40%,” she mentioned. “If this pattern continues — and we consider that it’ll resulting from know-how development — in order that implies that inexperienced hydrogen might be attainable sooner or later when these items come into play.”
— CNBC’s Anmar Frangoul and Evelyn Cheng contributed to this report.