As countries around the world look to the prospect of a hydrogen economy, fuel cell vehicles (FCVs) will be first major opportunity to spearhead an effort that could eventually also include stationary energy and broad infrastructure. Automotive OEMs like Hyundai, Toyota, and Daimler are committed to bringing thousands of FCVs to market over the next few years, but until FCVs reach prices of about $30,000 and hydrogen is $3/kg, the total cost of ownership advantage will remain with conventional engines and hybrids. Although Hyundai is already giving free hydrogen to initial FCV adopters, we find this strategy will cost tens of millions of dollars even at low volumes. Interestingly, due to their aggressive cost reduction efforts on fuel cells, automotive OEMs will have an opportunity to enter stationary energy and offer financing. Finally, although OEMs and government have already invested billions, we anticipate that about $180 billion to $800 billion will be required by various individual regions to adopt a full-fledged hydrogen economy. In likely absence of such funding, shift to hydrogen will not happen before 2040, if ever.
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