Your Grandkid's Car Will Be Hydrogen Fuel Cell
Battery electric vehicles are set to become the standard over the next few decades.
It's expected that by 2040, battery electric vehicles will represent more than half of global auto sales.
But the evolution of the car isn't going to stop there.
The next step is to fuel cell technology.
Fuel cell vehicles put out no emissions other than water vapor, have a fuel economy equivalent to about 2x that of gasoline combustion engines, and run on hydrogen, which is literally the most abundant element in the entire universe.
There's just one problem right now: their cost.
Just a few years ago, it cost about $1,000 to produce 1 kilowatt-hour from a hydrogen fuel cell. Of course, the technology was just being newly explored.
Today, the Department of Energy reports that figure is down to $53 per kilowatt-hour. But that still won't make it affordable enough for the retail market.
With continued development, the DOE expects costs to continue dropping to $40 per kilowatt-hour by 2020 and falling lower from there.
The global fuel cell vehicle market is estimated to be valued at less than $2 billion today. Reports show that by year-end 2017, fewer than 6,400 hydrogen fuel cell vehicles had been sold worldwide since 2013.
But as fuel cell technology becomes more affordable, that's expected to change. By 2022, it's estimated that the global hydrogen fuel cell market will be worth over $12 billion.
And government and industry leaders are already jumping in.
Most recently, Hyundai Motor Group announced a massive $6.7 billion investment into fuel cell technology. The company said just this week that it will produce 700,000 fuel cell systems annually by 2030 — and 500,000 of those would be under the Hyundai and Kia passenger and commercial brands
Fuel cell technology isn't brand new. But it's just starting to bud up right now.
So, the question is now: Where are we going to see the real profits for hydrogen fuel cells?
Well, my money is on China, and yours should be, too.
Fact: One in three vehicles sold globally will be sold in China.
And right now, China is sharply focused on transitioning the country’s fleet of vehicles away from traditional fossil fuels.
Right now, EVs account for a little less than 10% of China’s vehicle sales.
But that’s going to change dramatically thanks to bullish domestic policies by the Chinese government.
And by 2040, electric vehicles are expected to make up 60% of sales.
But there’s a small catch that the market has largely ignored until now...
The EV revolution will be driven by more than lithium-ion batteries.
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I know, I know. The moment you hear the words “electric vehicle,” your first thoughts are probably of Tesla.
But we’re talking about clean energy vehicles.
And that includes hydrogen fuel cells.
Start small, then go big.
That’s the ticket.
Now, if you’ve been paying attention to hydrogen fuel cell technology, then you already know some of the advantages it holds.
However, you’ll also know that fuel cells are starting to gain a lot more traction.
Look, there’s a reason Shandong Heavy Industry took control of Zhongtong Bus.
The company is set to roll out 2,000 hydrogen-powered buses throughout the Shandong province.
Keep in mind that the first hydrogen buses didn’t start making their appearance on Chinese streets until earlier this year.
In other words, there’s a ton of growth ahead for these fuel cell vehicles.
That’s the kind of opportunity the smart money drools over.
And the last place investors should be right now is on the sidelines of this boom.
China is going to lead the charge in adopting hydrogen fuel cell technology.
Until next time,
A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.
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