Navigating the Roads Ahead: Unraveling the Battery Electric Vehicles (BEV) vs Fuel Cell Electric Vehicles (FCEV) Conundrum
- Abigail Adaramola and Marvin Mahlon
Navigating the Roads Ahead: Unraveling the Battery Electric Vehicles
(BEV) vs Fuel Cells Electric Vehicles (FCEV) Conundrum
The recent United Nations Climate Change Conference (COP 28) the urgency of transitioning away from fossil fuels to mitigate climate change. Within this context, the widespread adoption of electric vehicles (EVs) assumes a pivotal role in curbing emissions from the transportation sector, a major contributor to global greenhouse gas emissions. EVs can either utilize hydrogen fuel cells (FCEVs) or batteries (BEVs), presenting a cleaner alternative to traditional gasoline-powered vehicles. Notably, FCEVs boast a longer driving range, whereas BEVs currently enjoy greater commercial availability and possess a more established charging infrastructure. Therefore, the decision between FCEVs and BEVs hinges on various factors such as local infrastructure, policy incentives, and consumer preferences.
First, looking at the bigger picture in terms of market structure, BEVs have enjoyed an extraordinary surge over the past eight years, with sales exceeding 7 million units and projected to reach 13.47 million by 2028. Notably, 14% of new vehicle sales globally are electric, primarily driven by China, the European Union (EU), and the United States. China, surpassing its 2025 projection, leads with over half of the total EVs sold worldwide. This growth is transformative for emerging BEV markets, especially in Africa.
Lithium-ion (Li-ion) batteries, valued at USD 46.2 billion in 2022, dominate the market, projected to exceed USD 189 billion by 2032. Contemporary Amperex Technology Co., Ltd. (CATL), the largest Li-ion battery producer with a 34% global market share, benefits from the expanding EV market’s demand for batteries.
On the other hand, the FCEV market is also experiencing rapid growth, with a projected compound annual growth rate (CAGR) of 43% from 2023 to 2032, reaching approximately USD 57 billion by 2032. The global fuel cell market is expected to reach USD 35 billion by 2033, growing at a CAGR of 17.1%. FCEVs are gaining traction due to clean energy demand, government support, and technological advancements enhancing reliability and affordability.
The Argument of Preference…
Manufacturers exhibit a strong inclination towards BEVs driven by multifaceted factors contributing to their widespread adoption. First, the robust consumer adoption and high market demand for BEVs create a positive feedback loop, solidifying their dominance in the automotive sector. Government incentives and support on a global scale, including tax credits and subsidies, further enhance the appeal of BEVs as an attractive investment for manufacturers. Advances in battery technology, such as improved energy density and charging speed, have propelled the success of BEVs, encouraging manufacturers to invest in evolving and efficient technologies. The scalability of battery production, in contrast to the complexities of hydrogen production for FCEVs, contributes to economies of scale, reducing costs and increasing profit margins for BEV manufacturers. Consumer education and awareness, an established supply chain for BEV components, environmental considerations favoring sustainability, simplified aftermarket services, and strategic global alliances further fortify BEVs as the preferred choice in the rapidly evolving landscape of electric mobility.
However, while BEVs dominate currently, the FCEV market is poised for substantial growth, especially with increasing environmental concerns and the quest for sustainable energy. The FCEV market in Africa is nascent but shows potential, supported by a growing fuel cell electrolyzer market in the Middle East and Africa, expected to expand at a CAGR of approximately 44% from 2023 to 2028. Factors such as the desire to achieve renewable energy goals and enhancing energy security contribute to the promising future of FCEVs. Thus, both technologies present compelling cases, and consumer preferences may shift as the market evolves.
Abigail Adaramola is the Hydrogen Economy Lead at Clean Technology Hub.
Mahlon Marvin is E-mobility Lead at Clean Technology Hub.
