Gasoline cell automobiles set for positive aspects in China truck market

Hydrogen gasoline cell automobiles are set to grow to be a significant participant in China’s industrial truck market, predicts JPMorgan’s Elaine Wu.

“Presently, the gasoline 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, instructed 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 power derived from different sources. Hydrogen is a clear gasoline and when consumed in a gasoline cell, produces solely water.

One motive why gasoline cell automobiles are a “excellent possibility” for the industrial truck market is because of their refueling time of solely round 10 to 15 minutes, Wu mentioned. In addition they have a journey vary of round 800 kilometers, about 50% to 100% above lithium battery electrical automobiles.

Main automakers reminiscent of Toyota, Honda and BMW are tapping into the hydrogen gasoline cell market.

China is already pushing for the promotion of gasoline cell automobiles, based on the JPMorgan analyst.

“The [Chinese] authorities is selling one thing, what we name ‘metropolis clusters’ in order that there could possibly be demonstrative cities telling profitable tales of how gasoline cell automobiles are applied in numerous elements of the nation,” Wu mentioned.

“That is additionally a coverage that we noticed applied a couple of decade in the past, when the central authorities was making an attempt to provide lithium battery electrical automobiles. And we noticed how profitable that was.”

Beijing has mentioned it will like 20% of recent vehicles offered to be new power 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 grow to be carbon impartial by 2060, hydrogen will seemingly play a task in heavy trade as a clear power supply, based on Wu.

“For this heavy industrial sector, excessive warmth content material is required and renewable energy due to this fact isn’t an excellent choice to gasoline heavy industrial sector — however hydrogen is,” she mentioned.

The analyst mentioned China leads the world in hydrogen manufacturing, and accounts for a 3rd of world output.

“Sooner or later, there could possibly be promotion of inexperienced hydrogen manufacturing whereby renewable energy goes for use to provide hydrogen,” Wu added.

Hydrogen is at the moment 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 price 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 imagine that it’s going to on account of 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.