11th May 2022
With climate change about a global concern, eco-friendly cars are having more than just a moment. Though electric vehicles (EVs) garner much of the spotlight, vehicles powered by another type of green energy — green hydrogen — are quietly growing, causing hydrogen car stocks to attract investor and environmentalist attention.
Transportation is one of the biggest causes of pollution. In the US, it’s estimated that transportation accounts for approximately 29% of all the country’s greenhouse gas (GHG) emissions1; the EU reports that road transport makes up 19.35% of its emissions load2; and globally, transportation accounts for 21% of the world’s emissions3.
Road transportation is responsible for the lion’s share; some three-quarters of transport emissions are due to road vehicles4.
In addition to its well-known impact on climate, pollution from road transportation also affects public health, causing respiratory problems that shorten lives. The WHO estimates that around 100,000 adults die prematurely due to air pollution in Europe alone, and “Emissions from road traffic account for a significant share of this burden.”5
It’s clear that cleaning up road vehicles will go a long way towards improving our environment and our health.
Hydrogen-powered cars are here
EVs are probably the best-known eco-friendly vehicle, but hydrogen-powered fuel cell elective vehicles (FCEVs) are an alternative. FCEVs use green hydrogen fuel cells, produced using electrolysis from water. The hydrogen molecules are isolated from the compound using electrolyzers and passed into fuel cells, to be released as energy.
Hydro car enthusiasts point out that the fuel cells used by FCEVs are more compact and recharge more quickly than the lithium batteries used by EVs6. “Long recharge time and the frequent need to recharge are two key restrictions on the growth of battery-powered electric vehicles.” writes Motley Fool analyst Rekha Khandelwal.7
There remain two barriers to widespread hydrogen vehicle adoption. One is the cost of hydrogen production, currently €3 to €8 ($3.4-$9), but it’s dropping rapidly8. ETC director Faustine Delasalle predicts that hydrogen fuel could cost as little as $1/kg by 20309, and BloombergNEF suggests that by 2050, green hydrogen could be cheaper than natural gas10.
The other is the need for hydrogen fueling stations and other infrastructure, but that too is on its way. Over 500 were already operational by the end of 2020, with hundreds more in the works11.
Hydrogen-powered vehicles are already in use in locations as far-flung as South Korea, Germany, Poland, Scotland, and California12, and the hydrogen car market is predicted to be worth $46.89 billion by 2028, growing at 68.52% CAGR (compound annual growth rate) from 2021.13
Which hydrogen vehicle stocks should I buy?
Hydrogen powered cars stocks are attracting a lot of investor attention, both from people who see them as a likely way to make a profit, and from those who want to support greener transportation but aren’t in a position to buy their own hydrogen-powered car. For those curious about hydrogen fuel cell cars stocks, we’ve gathered a list of the top 7 hydrogen car stocks to consider investing in this year.14
1. Defiance Hydrogen ETF (HDRO)
As an ETF, Defiance’s HDRO offers investors an opportunity to spread their investment across a broad range of stocks involved in all aspects of the hydrogen FCEV industry, including companies involved in green hydrogen fuel cell production, hydrogen energy infrastructure, and the manufacture of the electrolyzers that produce green hydrogen.
HDRO tracks the rules-based BlueStar Global Hydrogen & Next Gen Fuel Cell Index, which follows equities and companies where 50% or more of their revenue comes from hydrogen-based energy sources, fuel cell technologies, and industrial gases.
HDRO has an expense ratio of 0.30%, and share price is currently $13.4415.
Toyota is not, strictly speaking, among hydrogen vehicle stocks, but it is investing heavily in hydrogen vehicles. Toyota partnered with hydrogen company FuelCell Energy to take advantage of their expertise in producing green hydrogen fuel, and has already produced a hydrogen-powered car for consumer sales, the Toyota Mirai.
Toyota is widely considered a strong investment16, but its involvement in hydrogen-powered vehicles means that it’s embracing innovation and has potential to grow. It has a high market cap, and is currently trading at 2,091JPY ($18.24)17.
PlugPower enters the list of hydrogen powered cars stocks because of its leading role in building the fuel cell engines that power FCEVs. PlugPower recently acquired Applied Cryo Technologies to further expand its hydrogen production capabilities; opened new production facilities in the US and is expanding into Asia; and partnered with French carmaker Renault.
Based in New York, USA, Hyzon is one of the few pure-play hydrogen fuel cell cars stocks, focusing on producing hydrogen-powered trucks, buses, coaches, and other vehicles. It’s a relatively new company with a market cap of over $1.6 billion.
Hyzon recently turned a profit for the first time, and is seen as a leader in commercializing hydrogen fuel cell trucks20. It is currently trading at $5.04.
Nel is a Norway-based hydrogen company that began in 1927 as a hydrogen fertilizer firm. Today, Nel produces hydrogen electrolyzers, hydrogen storage solutions, and hydrogen fueling modules for refueling stations. It has delivered over 3,500 electrolyzer units and 120 hydrogen fueling stations, and reported a record potential order pipeline of over $6 billion in Q3 2021.
Nel ASA has a market cap of $2.21 billion and is currently trading at €1.1121, or $1.25, making it one of the cheaper hydrogen vehicle stocks around.
Founded in 2008 as a spinoff from automaker giants Volvo, PowerCell focuses on producing the hydrogen fuel cells that power FCEVs. PowerCell has forged partnerships with hydrogen plane startup ZeroAvia, Hitachi, and to supply Robert Bosch GmbH’s trucks and trailers.
PowerCell has a market cap of $780 million, reported $11 million in sales by Q3 2021, and is currently trading at 128 SEK ($13.42)22.
Ireland-based Fusion Fuel produces solar-powered electrolyzers that it says can make green hydrogen competitive with gray hydrogen by 2023, and lowering the price of green hydrogen is a key element in encouraging FCEV adoption.
Fusion Fuel also recently announced an agreement with Exolum to build a green hydrogen refueling station in Spain. Fusion Fuel is currently trading at $5.2823.
1 “Carbon Pollution from Transportation” accessed February 23, 2022 https://www.epa.gov/transportation-air-pollution-and-climate-change/carbon-pollution-transportation .
2 “Emissions from planes and ships: facts and figures (infographic)” Last updated April 28, 2021 https://www.europarl.europa.eu/news/en/headlines/society/20191129STO67756/emissions-from-planes-and-ships-facts-and-figures-infographic
3 “Cars, planes, trains: where do CO2 emissions from transport come from?” October 6, 2020 https://ourworldindata.org/co2-emissions-from-transport
4 “Cars, planes, trains: where do CO2 emissions from transport come from?” October 6, 2020 https://ourworldindata.org/co2-emissions-from-transport
5 “Air pollution and climate change” Accessed February 23, 2022 https://www.euro.who.int/en/health-topics/environment-and-health/Transport-and-health/data-and-statistics/air-pollution-and-climate-change2
6 “David Kempton: Hydrogen and EV stocks to supercharge portfolios” March 5, 2021 https://citywire.co.uk/funds-insider/news/david-kempton-hydrogen-and-ev-stocks-to-supercharge-portfolios/a1473925
7 “Should You Buy Fuel Cell Stocks in 2021?” January 4, 2021 https://www.fool.com/investing/2021/01/04/should-you-buy-fuel-cell-stocks-in-2021/
8 “The green hydrogen economy: Predicting the decarbonisation agenda of tomorrow” Accessed December 19, 2021 https://www.pwc.com/gx/en/industries/energy-utilities-resources/future-energy/green-hydrogen-cost.html
9 “‘Green hydrogen will be cost-competitive with grey H2 by 2030 — without a carbon price'” April 27, 2021 https://www.rechargenews.com/energy-transition/green-hydrogen-will-be-cost-competitive-with-grey-h2-by-2030-without-a-carbon-price/2-1-1001867
10 “Hydrogen Economy Outlook Key messages” March 30, 2020 https://data.bloomberglp.com/professional/sites/24/BNEF-Hydrogen-Economy-Outlook-Key-Messages-30-Mar-2020.pdf
11 “Record number of hydrogen refueling stations opened in 2020” February 17, 2021 https://fuelcellsworks.com/news/record-number-of-newly-opened-hydrogen-refuelling-stations-in-2020/
13 “Hydrogen Fuel Cell Vehicle Market worth USD 46.89 Billion by 2028, registering a CAGR of 68.52% – Report by Market Research Future (MRFR)” August 19, 2021 https://www.globenewswire.com/news-release/2021/08/19/2283784/0/en/Hydrogen-Fuel-Cell-Vehicle-Market-worth-USD-46-89-Billion-by-2028-registering-a-CAGR-of-68-52-Report-by-Market-Research-Future-MRFR.html
15 Accessed February 23, 2022 https://www.google.com/search?q=hdro+share+price&ei=QfMUYqgDvICL6A-S87OgCg&ved=0ahUKEwjop4rmwpP2AhU8wAIHHZL5DKQQ4dUDCA4&uact=5&oq=hdro+share+price&gs_lcp=Cgdnd3Mtd2l6EAMyBggAEAcQHjIFCAAQgAQ6BwgAEEcQsANKBAhBGABKBAhGGABQywNYywNg0QVoAnABeACAAXyIAXySAQMwLjGYAQCgAQHIAQjAAQE&sclient=gws-wiz
16 “Is Toyota the Right Auto Stock For You?” December 14, 2021 https://www.fool.com/investing/2021/12/14/is-toyota-the-right-auto-stock-for-you/
“Is Toyota Motor Corporation (TM) a Great Value Stock Right Now?” August 30, 2021 https://www.nasdaq.com/articles/is-toyota-motor-corporation-tm-a-great-value-stock-right-now-2021-08-30
17 Accessed February 23, 2022 https://www.google.com/search?q=toyota+share+price&ei=szUXYrGgBMabgQb60Y6gDw&ved=0ahUKEwjxxY656pf2AhXGTcAKHfqoA_QQ4dUDCA4&uact=5&oq=toyota+share+price&gs_lcp=Cgdnd3Mtd2l6EAMyCggAEIAEEEYQ-gEyBQgAEIAEMgUIABCABDIFCAAQgAQyBQgAEIAEMgUIABCABDIFCAAQgAQyBQgAEIAEMgUIABCABDIFCAAQgAQ6BwgAEEcQsAM6BQgAEJECOgQIABBDOgsIABCABBCxAxCDAToFCAAQsQM6CAgAELEDEIMBOg0ILhCxAxDHARCjAhBDOgQILhBDOgcIABCxAxBDOgsILhCABBDHARCvAToKCAAQkQIQRhD6AUoECEEYAEoECEYYAFD-BlizHWCSHmgDcAF4AYAB_gKIAboWkgEIMC4xNC4xLjGYAQCgAQHIAQjAAQE&sclient=gws-wiz
18 “The 3 Best Hydrogen Stocks to Bet on for the Alt-Fuel Future” December 28, 2021 https://www.nasdaq.com/articles/the-3-best-hydrogen-stocks-to-bet-on-for-the-alt-fuel-future
20 “Top Automakers Are Investing in Fuel Cells. Should You, Too?” November 1, 2021 https://www.fool.com/investing/2021/11/01/top-automakers-are-investing-in-fuel-cells-should/
21 Accessed February 23, 2022 https://www.google.com/search?q=nel+asa+share+price&ei=1j4XYt_3CcPF8gLB0Z_YAg&ved=0ahUKEwjfur2U85f2AhXDolwKHcHoBysQ4dUDCA4&uact=5&oq=nel+asa+share+price&gs_lcp=Cgdnd3Mtd2l6EAMyBggAEAcQHjIFCAAQgAQyBQgAEIAEMgUIABCABDIFCAAQgAQyBAgAEB4yBAgAEB4yBAgAEB4yBAgAEB4yBAgAEB46BwgAEEcQsAM6BwgAELADEENKBAhBGABKBAhGGABQuglY-hBg4BdoA3ABeACAAaEBiAGyCZIBAzAuOJgBAKABAcgBCsABAQ&sclient=gws-wiz
22 Accessed February 23, 2022 https://www.google.com/search?q=powercell+share+price&ei=aUAXYovPLtTB8gLY_qPQBg&ved=0ahUKEwjLp_fU9Jf2AhXUoFwKHVj_CGoQ4dUDCA4&uact=5&oq=powercell+share+price&gs_lcp=Cgdnd3Mtd2l6EAMyCggAEIAEEEYQ-gEyBQgAEIAEMgYIABAWEB4yBggAEBYQHjIGCAAQFhAeMgYIABAWEB46BwgAEEcQsAM6DgguELEDEMcBENEDEJECOggILhDUAhCRAjoECAAQQzoLCC4QgAQQsQMQgwE6CAgAEIAEELEDOggILhCxAxCDAToOCC4QgAQQsQMQxwEQowI6CwguELEDEMcBEKMCOggIABCxAxCDAToLCC4QsQMQ1AIQkQI6BQgAEJECOgcIABCxAxBDOgsILhCxAxDHARCvAToLCAAQgAQQsQMQgwE6CAgAELEDEJECOggILhCABBCxAzoLCC4QgAQQxwEQ0QM6DgguEIAEELEDEIMBENQCOgcIABCABBAKOggIABAWEAoQHkoECEEYAEoECEYYAFDXCVjHGWDiGmgDcAF4AIABsQGIAcwZkgEEMC4yMZgBAKABAcgBBMABAQ&sclient=gws-wiz
23 Accessed on February 23, 2022 https://www.google.com/search?q=fusion+fuel+share+price&ei=0EcXYuPlLYCI9u8P34-UoAM&ved=0ahUKEwjjjcTc-5f2AhUAhP0HHd8HBTQQ4dUDCA4&uact=5&oq=fusion+fuel+share+price&gs_lcp=Cgdnd3Mtd2l6EAMyCggAEIAEEEYQ-gEyBggAEBYQHjoHCAAQRxCwAzoKCAAQRxCwAxDJAzoHCAAQsAMQQzoKCAAQ5AIQsAMYADoSCC4QxwEQowIQyAMQsAMQQxgBOgQIABBDOhAILhCxAxCDARDHARDRAxBDOhEILhCABBCxAxCDARDHARDRAzoLCAAQgAQQsQMQgwE6CwguELEDEMcBEKMCOg4ILhCABBCxAxDHARDRAzoICC4QgAQQsQM6CAgAEIAEELEDOgUIABCABDoFCAAQkQI6CAgAELEDEIMBOgsILhCxAxDHARCvAToOCC4QgAQQsQMQxwEQrwE6CwguEIAEEMcBENEDOgsILhDHARDRAxCRAjoICAAQsQMQkQI6BwgAELEDEEM6CwguEIAEEMcBEK8BOgUILhCABDoHCC4Q1AIQCjoICAAQgAQQyQM6CAgAEBYQChAeSgQIQRgASgQIRhgBUIYLWMkhYNUiaARwAXgBgAH9AYgB-RySAQYwLjE4LjSYAQCgAQHIARHAAQHaAQYIABABGAnaAQYIARABGAg&sclient=gws-wiz