Three Years and Over 5 Billion: Evaluating the Impact of Hydrogen Fuel Cell Vehicle Demonstrations in China

In three years, over 5 billion! What are the results of hydrogen fuel cell vehicle demonstrations?

China’s hydrogen fuel cell vehicles have achieved a breakthrough from “0 to 1” and are now in a critical phase of scaling up from “1 to 10” to enhance global competitiveness. Recently, the Ministry of Finance allocated the third-year reward funds for fuel cell vehicle demonstration applications, totaling 2.34 billion yuan. Preliminary statistics indicate that the cumulative reward funds in the first three years have exceeded 5.1 billion yuan. So, how effective has this investment been? How can we continue to use this precious funding wisely in the future? What subsequent policies are needed?

Beneficial policies boost market size

According to the amount of reward funding, Hebei Province has emerged as the biggest winner, primarily due to the demonstration applications in Tangshan. Shanghai and Henan follow closely behind, with annual funding rewards steadily increasing. Beijing ranks fourth, with a notable increase of over 85% in the third-year reward funding, particularly commendable is the performance of the Daxing District in demonstrations. Zhang Yanfeng, director of the Shanghai Fuel Cell Vehicle Commercialization Promotion Center, noted that the average annual growth rate of reward funds over the three years reached 43%. “With policy support, the market size for hydrogen fuel cell vehicles has continuously improved.” According to statistics from the China Automobile Policy Research Institute, by March of this year, China has achieved cumulative sales of 29,500 fuel cell vehicles, quadrupling the numbers pre-demonstration, making it the second-largest market globally. The vehicle application scenarios comprehensively cover urban public transportation, commuter passenger services, urban logistics, construction waste transportation, towing and shuttling, mining transport, municipal sanitation, and ride-hailing services.

Li Meimei, chief researcher at the Orange Institute for Fuel Cell Vehicles, stated that based on the policy subsidy details for the five major hydrogen fuel cell demonstration city clusters, a single fuel cell vehicle demonstration city cluster can receive up to 1.87 billion yuan in subsidies during the four-year demonstration period. The total potential subsidy for the five major demonstration city clusters is 9.35 billion yuan. “In the first three years, these five demonstration city clusters received approximately 5.11 billion yuan in central government award funding, accounting for about 54.6% of the maximum subsidy during the four-year demonstration period.”

Sales of fuel cell vehicles expected to exceed 10,000 units this year

This year marks the final year of the demonstration period, with 45.4% of the reward funds yet to be allocated. As of March 2025, the five major demonstration city clusters have cumulatively promoted 15,850 fuel cell vehicles, which constitutes 48.8% of the total promotion target of 32,455 vehicles for the four-year demonstration period. Can the remaining promotional tasks be completed successfully? According to Chai Maorong, chief scientist and hydrogen energy CTO at China Power Investment Corporation, the Beijing-Tianjin-Hebei and Yangtze River Delta regions face minimal issues, while Henan is also likely to meet its goals. However, Guangdong and Hebei may encounter more pressure due to their higher targets.

Wang Jia, head of the China Fuel Cell Vehicle Demonstration Application Support Office, believes that compared to pure electric vehicles, the fuel cell vehicle industry chain is longer and more challenging to develop. In addition to solving issues related to the vehicles themselves, it is essential to streamline the hydrogen supply chain and maintain confidence in development, along with strategic stability. At the end of last year, relevant authorities issued a supplementary notice on the “Fuel Cell Vehicle Demonstration Application Policy,” proposing to refine the implementation plans of demonstration city clusters to ensure tangible results. Six new cities, including Hami, Lvliang, Dalian, Puyang, Jiyuan, and Cangzhou, have been added to the demonstration city clusters.

“With the distribution of the third-year reward funds, industry confidence in development has been further solidified. It is believed that, with joint efforts from the industry, the demonstration city clusters will achieve their established goals and accelerate the demonstration’s effectiveness, with annual fuel cell vehicle promotion likely to exceed 10,000 units,” Wang Jia informed.

Call for quick formulation of subsequent policies at the national level

Since 2021, China has adopted a reward-based approach to support demonstration projects for fuel cell vehicles in city clusters such as Beijing-Tianjin-Hebei, Shanghai, Guangdong, Zhengzhou, and Hebei, aiming to facilitate the hydrogen energy industry’s transition from pilot demonstration to a more structured phase. One of the core objectives of these demonstration city clusters is to support breakthroughs in core technologies and promote self-sufficiency in the industrial chain, rather than merely pursuing market scale,” Wang emphasized.

Thanks to the demonstration policies, China has achieved autonomous breakthroughs and industrial applications in core fuel cell technologies such as stacks, membrane electrodes, bipolar plates, compressors, and hydrogen circulation systems, with an overall autonomy rate exceeding 80%. The autonomy rate for hydrogen fuel cell systems has reached 97%, with costs reduced by over 80% compared to pre-2020 levels, marking significant progress.

Overall, China’s hydrogen fuel cell vehicles have achieved a breakthrough from “0 to 1” and are currently experiencing a critical phase of scaling up from “1 to 10” to enhance global competitiveness. “With the continued disbursement of reward funds, local enterprises participating in demonstrations will effectively alleviate financial pressures and further boost development confidence,” Zhang Yanfeng noted. Compared to the new energy vehicle demonstration policy initiated in 2009, demonstrating hydrogen fuel cell vehicles presents a much greater challenge than pure electric vehicles. Nonetheless, there is optimism that, with the nurturing of new state policies, China’s hydrogen energy transportation sector will accelerate along the “green hydrogen road,” promoting a transition to a low-carbon and sustainable future. “The industry currently lacks a self-driven development capability and urgently needs national policies to instill confidence and sustained support for the hydrogen energy sector to take the next step,” Wang Jia urged, suggesting that relevant departments further summarize experiences from fuel cell vehicle demonstrations and clarify subsequent policies to stabilize industry expectations, thereby laying a solid foundation for hydrogen energy in building future energy systems and achieving green and low-carbon transformation.