The Zhitong Finance App learned that Haitong International released a research report stating that according to SNereSearch data, global fuel cell vehicle sales in 2023 were 14,451 vehicles, a year-on-year decrease of 30.2%. By country and region, in 2023, China, South Korea, and the US will account for 38.8%, 32.0%, and 20.7% of hydrogen fuel cell vehicle sales, respectively, with China replacing South Korea as number one. The volumetric energy density and combustion point of hydrogen are low, and the requirements for storage and transportation safety are high. Market demand for hydrogen fuel cell vehicles may be further suppressed against the backdrop of increased competition among new energy vendors and the continued decline in cost space due to factors such as the cost ratio of hydrogen fuel cell vehicles still needs to be improved compared to pure electric vehicles, compounded by factors such as the still imperfect infrastructure.

Recommended attention: Possible long-term investment opportunities for equipment vendors that have already deployed hydrogen energy, such as Longji Green Energy (601012.SH) and Sunshine Power (300274.SZ), which have laid out alkaline electrolyzer tracks.

Incident: On January 25, Honda Motor announced that its joint venture plant with GM has officially begun producing hydrogen fuel cells in the US. The joint venture plant is located in Brownstown, Michigan, USA, with a total investment of 85 million US dollars. Japan's strong bet on hydrogen energy is mainly driven by a sense of an energy crisis limited by objective factors such as land resources. In February, Honda announced plans to launch hydrogen fuel-powered CR-V models in Japan and North America within the year. In March, the price of Toyota's hydrogen car Mirai dropped by 40,000 US dollars to 27,000 US dollars in North America and promised free hydrogen refueling for 6 years.

Haitong International's main views are as follows:

Global sales of hydrogen fuel cell vehicles have declined significantly, and sales in the Korean market have been cut in half

Global fuel cell vehicle sales in 2023 were 14,451 units, down 30.2% year on year, according to SNereSearch data. 1) By country and region, in 2023, China, South Korea, and the US will account for 38.8%, 32.0%, and 20.7% of hydrogen fuel cell vehicle sales, respectively, with China replacing South Korea as number one. With the exception of China and the US, which maintained an incremental trend (up 2.8% and 10.5%, respectively), sales declined to varying degrees in other major countries and regions. Among them, sales in South Korea fell 55.2% year on year, mainly due to declining subsidies in mid-'23, insufficient hydrogen refueling stations, and rising fuel costs.

2) By manufacturer, Hyundai Motor maintained the top share of the global market, but its sales volume fell sharply by 55.9%, and its market share fell to 34.7% from 54.8% in 2022; Toyota's sales increased slightly by 3.9%, and its market share rose slightly to 26.6% from 17.9% in 2022; and the sales volume of Chinese manufacturers increased slightly by 2.4%, mainly due to the commercial vehicle market.

The operation of hydrogen stations in California is facing difficulties. It is recommended to pay attention to the progress of the hydrogen network investment plan

In February, energy giant Shell announced the permanent closure of seven of its passenger car fueling stations in California, which is equivalent to shutting down all of its passenger car fueling stations in California. Furthermore, Shell cancelled plans to build 48 new light hydrogen fueling stations in California in '23, and said it will prioritize the development of hydrogen services for heavy vehicles in the future, while investing in pure electric vehicles. In the same month, Iwatani, one of the two largest hydrogen fueling station operators in the US, is suing the Norwegian company Nel, which is the core technology supplier for hydrogen fueling stations, alleging that there was a quality problem with the equipment supplied by Iwatani, which caused several hydrogen fueling stations operated by Iwatani in California to fail and had to be shut down and adjusted; while sales of hydrogen vehicles by Toyota, Hyundai, and Honda in the US are mainly contributed by this state, Haitong International expects a certain impact on sales in the US hydrogen passenger car market in the short term.

On February 14, the California Energy Commission approved an investment plan of 1.9 billion US dollars to build new charging stations, expand hydrogen fuel cell projects, etc., to create the most extensive charging network and hydrogenation network in the US. It is recommended to continue to monitor the progress of this investment plan.

Short-term demand for hydrogen fuel cell vehicles may be suppressed, and cost performance still needs to be improved

1) Lack of hydrogenation infrastructure: Low ownership, equipment quality issues, and scattered vehicle distribution have led to poor utilization of hydrogen stations, difficult to operate, and difficult to meet consumers' demand for hydrogenation. For example, in November '23, three-quarters of the hydrogen fueling stations in South Korea were suspended, mainly due to the interruption of hydrogen gas supply (hydrogen production facilities failed due to compressor problems).

2) Differences in energy conversion efficiency: When discussing fuel cell vehicles, Musk proposed that generating one kilogram of hydrogen requires about 55 degrees of electricity, and the corresponding driving range is only about 80 kilometers. However, under the same amount of electricity, an electric vehicle can drive 400 kilometers. This difference in energy conversion efficiency and cost may become a bottleneck in the short-term development of fuel cell vehicles (hydrogen generation path from electrolyzed water).

3) Storage and transportation problems: The volumetric energy density and combustion point of hydrogen are low, and the requirements for storage and transportation safety are high. Market demand for hydrogen fuel cell vehicles may be further suppressed against the backdrop of increased competition among new energy vendors and the continuing decline in cost space due to factors such as the cost performance ratio of hydrogen fuel cell vehicles still needs to be improved compared to pure electric vehicles.

Risk warning: The implementation of the hydrogen energy policy falls short of expectations, the reduction in costs falls short of expectations, and the application of hydrogen energy falls short of expectations.