Hydrogen Buses Market Size, Share & Industry Analysis, By Bus Type (Single Deck, Double Deck, and Articulated Deck), By Power Output (Below 100 kW, 100-200 kW, and Above 200 kW), By Technology (Proton Exchange Membrane Fuel Cell (PEMFC), Solid Oxide Fuel Cell (SOFC), and Alkaline Fuel Cell (AFC)), By Manufacturing Type (New Hydrogen Bus and Retrofitted), and Regional Forecast, 2024-2032

The global hydrogen buses market size was valued at USD 1.07 billion in 2023. The market is projected to grow from USD 1.87 billion in 2024 to USD 41.34 billion by 2032, exhibiting a CAGR of 47.3% during the forecast period.

A hydrogen bus features a type of propulsion that is powered by hydrogen fuel cells. These buses consume hydrogen gas as a fuel source and convert it into electricity through a chemical reaction in the fuel cell. The electricity generated is used to power the electric motor, which drives and propels the bus's wheels. The key highlight of hydrogen buses is that they produce zero tailpipe emissions, as the only byproduct of the hydrogen fuel cell reaction is water vapor. This makes them a clean energy alternative to traditional diesel or gasoline-powered vehicles. These buses also offer lower noise operations compared to conventional buses harboring internal combustion engines.

The increasing volume of greenhouse gas emissions from the transportation sector and rapid urbanization have resulted in ongoing pollution and emission reduction requirements. There is a growing need to escalate the on-road usage of alternative fuels and alternative automotive powertrains in mobility applications to improve the overall quality of life and restore environmental balance. Therefore, OEMs are introducing fuel-cell bus models into their product line-ups as part of their efforts to adopt cleaner and more sustainable transportation solutions. For instance, in January 2024, Honda collaborated with General Motors (GM) and outlined key strategies to increase the use of hydrogen fuel cell technology as the company looks to expand its hydrogen business. It has initiated mass production of Fuel Cell System Manufacturing LLC (FCSM), a joint venture production facility with General Motors (GM) in Brownstown, Michigan.  

Rising environmental concerns, supportive government policies, and technological advancements to improve urban air quality and curb emission levels drive market growth. These advancements have made hydrogen buses more viable and suitable transportation. For instance, in January 2024, the Barcelona city government placed an order for 36 hydrogen buses from Solaris and two units of articulated buses with 70 kW fuel cells. 

The COVID-19 pandemic disrupted manufacturing activities and supply chains globally, causing delays in the production and deployment of fuel cell buses. The pandemic impacted the development of hydrogen technologies, as this technology requires a well-coordinated supply chain, and significant capital is required for demonstration.

Hydrogen Buses Market Trends

Advancing Hydrogen Fuel Cell Technology to Enhance Efficiency, Performance, and Cost-effectiveness is Trending in the Market

A technological trend shaping the global hydrogen buses industry is the advancement of hydrogen fuel cell technology to improve efficiency, performance, and cost-effectiveness. Fuel cell technology lies at the heart of hydrogen-fuel cell buses, converting hydrogen gas into electricity through an electrochemical reaction to power electric motors and propel the vehicle. As the industry continues to evolve, several key technological trends are emerging to enhance the capabilities and competitiveness of hydrogen fuel cell buses. Another crucial technological trend is the optimization of hydrogen storage and delivery systems to increase onboard storage capacity, reduce refueling times, and enhance overall efficiency.

Innovations in hydrogen storage materials, such as advanced composite tanks and metal hydrides, enable manufacturers to design buses with larger hydrogen storage capacities, extending the vehicle's range and reducing the frequency of refueling stops. Furthermore, advancements in hydrogen production methods, particularly electrolysis powered by renewable energy sources, drive the transition toward green hydrogen and reduce the environmental footprint of hydrogen fuel cell buses.

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Hydrogen Buses Market Growth Factors

Increasing Need for Cleaner Technologies to Mitigate Emission Levels is Supporting Market Growth

The urgent need to address air pollution and mitigate climate change's impact is a major driver for the global hydrogen buses market. As urbanization accelerates and the population grows, cities across the globe are grappling with worsening air quality and the harmful effects of vehicle emissions. According to the International Energy Agency (IEA), the transportation sector is one of the largest contributors to global Carbon Dioxide (CO2) emissions, accounting for approximately 24% of total energy-related CO2 emissions in 2020.

Hydrogen fuel cell buses present a compelling solution to these pressing environmental challenges. Unlike traditional diesel buses, which emit pollutants such as Nitrogen Oxides (NOx), Particulate Matter (PM), and Greenhouse Gases (GHGs), hydrogen fuel cell buses produce zero tailpipe emissions. Instead of burning fossil fuels, Fuel Cell Electric Buses (FCEB), use fuel cells to produce electricity through a chemical reaction between hydrogen and oxygen, with the only byproduct being water vapor. This emission-free operation helps mitigate air pollution and reduce greenhouse gas emissions, contributing to cleaner and healthier urban environments.

Government Policies and Initiatives Show a Crucial Role in Driving Market Growth

Government financial incentives and funding play a crucial part in driving the hydrogen buses market growth by providing support for research, development, deployment, and infrastructure expansion. These incentives help to overcome barriers, such as high upfront costs, technological uncertainties, and limited infrastructure, thereby accelerating the adoption of zero emission buses as a sustainable transportation solution.

Governments across the globe allocate significant funding to support R&D efforts in hydrogen and fuel cell technologies, including improvements in fuel cell efficiency, durability, and cost-effectiveness. For instance, the U.S. Department of Energy's Fuel Cell Technologies Office (FCTO) invests in research projects focused on developing innovative fuel cell technologies for transportation applications, including Fuel Cell Electric Buses (FCEB). These incentives benefit transit agencies in dealing with the higher upfront costs of hydrogen buses compared to conventional diesel buses, making them more financially attractive for public transit agencies and fleet operators. In Europe, for example, the European Union's Fuel Cells and Hydrogen Joint Undertaking (FCH JU) provides funding for hydrogen bus deployment projects under its Horizon 2020 program. Similarly, Japan, South Korea, and China offer various financial incentives to promote the adoption of hydrogen fuel cell buses and support hydrogen infrastructure development.

RESTRAINING FACTORS

High Cost Associated with Essential Elements Coupled with Inadequate Refilling Infrastructure Impede Market Expansion

The restraining factor for the hydrogen bus demand is the high cost associated with hydrogen fuel cell technology and infrastructure. While hydrogen fuel cell buses offer numerous environmental benefits, including zero-emission operation and reduced greenhouse gas emissions, the upfront costs of purchasing hydrogen buses and establishing the necessary infrastructure can be prohibitively expensive. The primary cost driver for Fuel Cell Electric Buses (FCEB), is the fuel cell system itself. Fuel cells are complex electrochemical devices that convert hydrogen gas into electricity to power the bus's electric motor.

These fuel cell systems are still relatively expensive to manufacture, primarily due to the high cost of materials, such as platinum, used in fuel cell catalysts. As a result, the initial purchase price of hydrogen fuel cell buses is significantly higher than that of conventional diesel or even battery-electric buses. As technology advances, economies of scale are completed, and production processes become more efficient, the cost of hydrogen fuel cell buses and infrastructure is expected to decrease, making them more competitive with conventional alternatives and driving broader market adoption. However, overcoming these cost barriers remains a critical challenge for the growth of the global bus industry in the near term.

Hydrogen Buses Market Segmentation Analysis

By Bus Type Analysis

Single Deck Hydrogen Bus Segment Held the Highest Share Owing to its Extensive Deployment on Regular Bus Routes

By bus type, the market is segmented into single deck, double deck, and articulated deck.

The single deck segment held the largest market share in 2023. Single deck fuel cell buses have been gaining popularity in the public transportation sector due to their environmental benefits, technological advancements, compact sizes and increasing support from governments and transit agencies. These buses are used for urban transit services, providing clean and quiet city transportation options. Increasing contracts for single deck buses in various regions is further expected to drive the market growth of this segment during the forecast period.

The articulated deck and double deck segments are also anticipated to register a higher CAGR during the forecast period. These buses are designed to provide extended passenger capacity while maintaining the advantages of hydrogen fuel cell technology. These buses are primarily used in urban areas with high passenger demand for urban mobility.

By Power Output Analysis

Increasing Demand for Low-Capacity Transportation across Cities Boosted the Below 100kW Segment Growth

By power output, the market is categorized into below 100 kW, 100 kW-200kW, and above 200 kW.

The below 100kW segment held the largest market share in 2023. Buses with a power output of below 100 kW are designed for low-capacity transportation and shuttle services in urban and suburban areas. Several bus operators are placing orders for hydrogen buses with power output below 100kW to promote public transport sustainability. For instance, in February 2023, Stadtwerke Aschaffenburg Verkehrs-GmbH ordered 12 hydrogen buses from Solaris to operate in Germany. The Urbino 12 hydrogen units will have a 70kW set of fuel cells, while the Urbino 18 hydrogen fuel cell buses will have a 100kW fuel cell module.

The 100kW-200kW segment is anticipated to register the highest growth rate over the forecast period. Standard-sized buses used for urban and intercity routes have medium power output fuel cell stacks, ranging from 100kW-200kW. These buses provide adequate performance for moderate passenger capacities and medium-distance routes.

By Technology Analysis

Proton Exchange Membrane Fuel Cell Segment Growth Augmented Due to Their Higher Energy Efficiency

Based on technology, the market is categorized into Proton Exchange Membrane Fuel Cell (PEMFC), Solid Oxide Fuel Cell (SOFC), and Alkaline Fuel Cell (AFC).

In 2023, the Proton Exchange Membrane Fuel Cell (PEMFC) segment accounted for the largest hydrogen buses market share among other segments. PEMFCs are known for their high energy efficiency, often exceeding 50% in converting the chemical energy of hydrogen into electrical power. This efficiency can reduce energy consumption and increase cost savings. Using hydrogen fuel, PEMFCs can reach efficiency as high as 65% with water as the only byproduct. Due to its higher efficiency, several OEMs use PEM technology in fuel cell buses.

The Solid Oxide Fuel Cell (SOFC) segment is estimated to display the highest growth rate throughout the forecast period. SOFC is an emerging technology with the potential to modernize various sectors, including transportation. Hydrogen fuel cell buses are one application area where SOFC technology is being explored. SOFCs are highly efficient and can achieve high electrical efficiency, typically around 60%-70%, making them suitable for energy-intensive applications, such as buses. SOFCs have the potential for long lifespans and are less prone to degradation than other fuel cell types.

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By Manufacturing Type Analysis

Higher Efficiency Offered by New Hydrogen Bus Fueled Segment Growth

The market is segmented into new hydrogen bus and retrofitted based on manufacturing type.

The new hydrogen bus segment held the largest market share. These new buses are purpose-built with hydrogen fuel cell technology integrated. This allows for seamless design and optimization, often improving efficiency and performance. New buses are engineered with the latest advancements in hydrogen fuel cell technology, which can offer higher efficiency and longer driving ranges compared to retrofitting older buses.

The retrofitted segment is anticipated to rise significantly over the forecast period. OEMs are retrofitting or modernizing coaches with hydrogen technologies to reduce their environmental footprint. The retrofit cost is lower than purchasing a new hydrogen vehicle, but it is also ecological since the retrofit extends the vehicle's life. According to a study conducted by the Agency for Environment and Energy Management (ADEME) in March 2021, retaining a coach by replacing its diesel engine with a new zero-emission electric unit can reduce its emissions by 87%. Several countries are opting to retrofit their bus fleet to save on the overall cost of production.

REGIONAL INSIGHTS

Increased Penetration of Zero Emission Vehicles in China and South Korea Propels Asia Pacific Market Growth

On the basis of region, the global market is segmented into North America, Europe, Asia Pacific, and the rest of the world.

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Asia Pacific held the dominant market share for hydrogen buses in 2023 and is likely to maintain its dominance over the forecast period. Various countries in the region are witnessing robust growth in the automotive sector. Several government initiatives to curb emission levels and supportive government policies to promote sustainable mobility solutions are the major factors driving regional growth. Japan, South Korea, and China, have shown a solid commitment to hydrogen technologies. Governments in these countries have provided substantial financial support and incentives for developing and deploying hydrogen-powered vehicles, including buses.  

Europe accounted for a substantial market share and is estimated to grow at the highest growth rate during the forecast period. European countries have stringent environmental regulations and ambitious emissions reduction targets. Hydrogen buses, which produce zero tailpipe emissions, were observed as a viable solution to help meet these targets and improve urban air quality. Furthermore, firm commitments toward carbon neutrality and upcoming regional hydrogen projects are further expected to drive market growth.

North America also held a decent market share in 2023. Increasing government initiatives in the region, especially in U.S. metropolitan cities, to implement hydrogen buses for public transport are driving the market growth in the region. The rest of the world is also estimated to grow at a steady pace throughout the forecast period, owing to increasing technological adoption in the South American and Middle Eastern regions.

List of Key Companies in Hydrogen Buses Market

High Focus on New Bus Launches by Market Players to Gain Competitive Edge to Drive Market Growth

Various regional and international players are steadily developing advanced strategies for competitive advantage. Many companies are adopting market strategies, such as new bus launches, acquisitions, partnerships, and collaboration strategies to enable market growth. For instance, in July 2023, the Go-Ahead Group launched a fleet of single decker 20 fuel cell buses in Britain to carry passengers on routes in the Gatwick Airport, Crawley, and Horley areas. The project is supported by over USD 4.6 million in funding from the government’s Ultra-Low Emission Bus scheme.

The top 10 players in the industry: Tata Motors Limited, Ashok Leyland, Volvo Group, Daimler Buses, New Flyer, Yutong Bus Co., Ltd, Solaris Bus & Coach sp, Hino Motors, Wrightbus, and Hyundai Motors are actively involved in the development and production of hydrogen fuel cell vehicles, including buses. 

List of Key Companies Profiled:

• Wrightbus (Ireland)


• SOLARIS (Poland)


• Tata Motors Limited (India)


• Hyundai (South Korea)


• Volvo Group (Sweden)


• NFI Group Inc. (Canada)


• Daimler Buses (Germany)


• Hino Motors (Japan)


• SunLine Transit Agency (U.S.)


• Yutong (China)

KEY INDUSTRY DEVELOPMENTS:

• January 2024 – NFI Group Inc. (NFI) signed a new long-term supply agreement to purchase fuel cell modules from Burnaby, B.C.-based Ballard Power Systems. As part of the agreement, Ballard will provide at least 100 FCmove-HD+ modules to New Flyer. The modules will power New Flyer’s Xcelsior CHARGE FC hydrogen fuel cell buses.


• January 2024 – German operator Rheinbahn Dusseldorf ordered 10 Solaris Urbino and 12 hydrogen buses. The city has been implementing its strategy by adding both battery-electric and hydrogen-powered units to its urban fleet. The ordered buses will be powered by green hydrogen and produced exclusively using renewable electricity.


• December 2023 – Tata Motors became India’s first bus manufacturer to receive the Central Motor Vehicles Rules (CMVR) type approval certificate for its Hydrogen Fuel Cell powered (FCEV) buses from the agency, the Automotive Research Association of India (ARAI). The largest commercial vehicle manufacturer in India obtained the approval for its Tata Starbus 4/12 FCEV model along with its variations. 


• July 2023 – Solaris provided 25 hydrogen-powered buses to Duisburg, a city in Germany, from 2024-25. The order consists of 11 Urbino 12 hydrogen models and 14 of the articulated version, the Urbino 18 hydrogen. This marks Duisburger Verkehrsgesellschaft AG's journey to transform its fleet to be completely carbon-free by 2030.


• June 2023 – Hyundai announced to supply 1,300 fuel-cell buses to Seoul to replace 1,300 ICE buses and create a clean hydrogen ecosystem by 2026 as a part of its mission to accelerate the development of a hydrogen society by leveraging the company’s global leadership in fuel-cell technologies. 

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.

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