India Green Hydrogen-Powered Vehicles
The automotive industry in India is categorized into Internal combustion engine vehicles (ICEV) and electric vehicles (EVs). ICEVs currently dominate the market, although EVs have shown steady growth since 2019, particularly in the two and three-wheeler segments. The Ministry of Road Transport and Highways reported a significant increase in sales for 2-wheeler EVs by 422%, 3-wheelers by 75%, and 4-wheelers by 230% between 2019 and 2021. The number of electric buses increased by over 1200% during this period.
The Government of India (GOI) is exploring the use of hydrogen-power vehicles through the national green hydrogen mission policy (NGHMP), as a potential third alternative. The GOI approved the policy in January 2022 to promote renewable energy use in all economic sectors central to India’s energy transition. Green Hydrogen (GH) is considered a promising alternative for enabling this transition, as it can enable long-duration storage of renewable energy, replace fossil fuels in industry, support clean transportation, and potentially facilitate decentralized power generation, aviation, and marine transport.
To achieve the above objectives, the goal is to produce at least 5 million metric tons (MMT) of GH per annum by 2030, potentially reaching 10 MMT per annum with export opportunities. The Mission will support the replacement of fossil fuels and fossil fuel-based feedstocks with renewable energies and feedstocks based on GH. This will include the replacement of hydrogen produced from fossil fuel sources with GH in ammonia production and petroleum refining, blending GH in the city gas distribution systems, production of steel, and use of GH-derived synthetic fuels (including green ammonia and green methanol) to replace fossil fuels in various sectors, including mobility, shipping, and aviation.
Industry experts believe that GH-powered vehicles are the future of the Indian automotive sector, mainly for commercial vehicles. It has numerous advantages over electric vehicles, such as higher energy density, weighing lighter than lithium-ion batteries, offering more extended range, and taking less time to refuel. Also, the cost required to build the hydrogen fueling stations is more economical than setting up the EV charging infrastructure across the country. Despite the potential advantages of green hydrogen-powered vehicles, their adoption in India is limited due to various factors. One significant challenge is the high cost of producing and storing hydrogen fuel. The infrastructure for hydrogen production and storage is also currently limited, which makes it challenging to scale up the use of green hydrogen-powered vehicles.
Recent data shows that India’s commercial vehicle (CV) sales will cross 1.02 million by the end of FY 2022-23. The light (L) and heavy (H) commercial vehicle (CV) segment has almost returned to the pre-pandemic levels, with the industry selling over 660,000 LCV units in FY-22 and the remaining in medium (M) and HCV segments.
LCV, M, and HCV segments are expected to grow 10-12 per cent and 6-8 per cent by 2028. This is primarily due to the increase in demand for logistics services in the country, the recovery in the Indian economy, and government spending on infrastructure.
Green hydrogen fuel is currently priced at $4 U.S. dollars per 0.001 MT and is expected to drop to less than $1 U.S. dollar by 2025. As a result, numerous domestic and international original equipment manufacturers (OEMs) are eagerly introducing their vehicles and related technologies in the Indian automotive sector.
Although hydrogen-powered vehicles and associated technologies are still in their infancy in India, this presents export opportunities for U.S. companies that provide solutions in the green hydrogen segment, such as hydrogen-powered vehicles, powertrains, converters, and many others.
For entry into the Indian market, U.S. companies must identify quality partners well-connected with OEMs and their Tier1/2 suppliers. Strategic planning, due diligence, and consistent follow-ups are the prerequisites for doing business successfully in India.
India’s U.S. Commercial Service team can help with your market entry strategies. If you wish to pursue market opportunities in this region, please contact the auto and smart mobility team at the U.S. Commercial Service in India.