September 3, 2025 - Still Hope For Hydrogen?

This is the Telemetry Transportation Daily for September 3, 2025, and I'm Sam Abuelsamid, vice president of market research for Telemetry.

When I first began covering the auto industry, one of the common running jokes was that hydrogen fuel cell vehicles were a technology that had been five years away for the past 15 years. 19 years later, fuel cells are still at least five years away, at a minimum. While the technology has always shown a lot of promise with the ability to provide quick refueling, rivalling internal combustion and zero carbon emissions, it has faced even more speed bumps. 

Top of the list is a dearth of hydrogen refueling infrastructure in most places, with only 50 public fueling stations in the US, all in California. Most hydrogen is still produced from fossil fuels, almost entirely natural gas, so there are carbon emissions associated with that production. In theory, hydrogen could be used as an energy storage medium, being produced by cracking water with solar or wind power in regions where that is plentiful and transporting it to locations where it is needed. Unfortunately, that has yet to materialize. In the 2000s, the prospects looked good for producing fuel cells at scale at prices competitive with combustion engines and much cheaper than batteries. However, that scale hasn't arrived, and battery costs have plummeted. 

Now only a handful of companies still seem to be interested in hydrogen fuel cells for light-duty vehicles, including Hyundai, Toyota, Honda and BMW. BMW has actually been partnering with Toyota on fuel cell technology and has built a small fleet of current X5s with the technology. They work well, but due to the infrastructure, the market is limited. Nonetheless, BMW is continuing development and has already built prototypes for the next-generation iX5 Hydrogen that it hopes to launch in 2028. This would be sold alongside gas, plug-in hybrid and battery electric variants. The new fuel cell stack is targeted to be 25% smaller while retaining similar output. The reality is that if BMW moves forward with production, this vehicle would likely only be available in Germany, South Korea and perhaps China and California. 

The likelihood of hydrogen fuel cell technology becoming a mainstream alternative to combustion or battery electric vehicles seems slim at best in the next couple of decades, particularly as charging and battery swap infrastructure continues to grow. With 1 MW charging now available in China as well as swapping, the biggest advantage of fuel cells, rapid refueling, is now pretty much nullified. 

Thanks for listening.