27 Feb 24

The hydrogen vehicles’ journey to market viability

To get a firm foothold in European fleets, FCEVs must portray a comparable - or preferably better - total cost of ownership compared to BEV, PHEV and ICE. Where do they stand today?

According to publicly available data from Directlease, fuel cell passenger cars perform slightly better on TCO than plug-in hybrid alternatives at the same price point and somewhat worse than battery-powered models.

A Toyota Mirai, priced at 82.500 euros (Belgium), is leased at € 1,409 per month (10,000 km per year), including fuel expenditure. A BMW 550e (€ 85,650) costs € 1,549, and the all-electric Mercedes EQE 350 (€ 83,490) comes in at € 1,054, including the energy cost.

But this comparison with similarly priced premium sedans, with stronger residual values, colours the equation. A better matching Toyota Camry carries a price tag of a mere € 48,114 and can be leased at € 883 monthly. This confirms the findings that the upfront costs of hydrogen vehicles are 70% more expensive than ICE equivalents, which directly influences insurance costs (though maintenance fees are slightly lower).

Only mass production can close this gap. In its Mobility Observatory, leasing company Arval has calculated that an annual production of 200,000 FCEV vehicles would reduce the total cost of ownership by 18%.

High cost per kilo

Another handicap for FCEVs is the most expensive day-to-day component: fuel. Due to availability, prices vary widely from one EU country to another (up to 20 euros per kilo), but 9 euros per kilo is a good average. Despite a portion of this cost being offset by the higher efficiency of a fuel cell, fleet managers must generally reckon with elevated fuel expenditure.

The International Council on Clean Transportation (ICCT) has pinpointed pump prices as the main prohibitor for the economic viability of fuel cell vehicles, especially in the commercial sector, demanding government subsidies to reduce the price to 4 euros per kilo, the tipping point for cost parity with diesel. The lower energy price for battery-powered vehicles remains an undeniable advantage.

Lastly, when comparing with battery-powered vehicles, the indirect costs of long charging times and possible payload losses in the case of commercial fleets must be factored in. Fuel cell vehicles significantly outperform BEVs in these fields.

In conclusion, two criteria will decide upon the TCO parity of fuel cell electric vehicles compared to their more readily available counterparts: a lowering of the upfront costs by leveraging current demonstration volumes and a pump price for hydrogen, which must be halved compared to today.

Read more on our E-Book From hydrogen to EV

Image Source: Shutterstock (ID: 270755270)

Authored by: Piet Andries