Focus topics

The market for hydrogen is highly contested

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  • Compared to the EU and Japan, China moved slower in promoting the role of hydrogen energy in its future energy mix. ​
  • However, this has changed: The recently released “Long term development plan of hydrogen sector in China 2021-2035” (NDRC, 24 Mar) sets clear guidance and high expectations for the new energy sector. Hydrogen energy is envisioned to become an important part of China’s future energy mix and its carbon neutrality solution.​
  • Currently the domestic market for fuel cell vehicles is still at early development stage, with only around 1,500 vehicles sold in 2022.​
  • Nevertheless, some foreign companies like Toyota, Bosch and Ballard have seen the great market potential of fuel cell applications in China and decided to move early into the sector.​
  • They have tapped into multiple parts of the value chain of fuel cell business, covering key materials (e.g. carbon paper), fuel cell components, fuel cell stacks / systems, and fuel cell vehicles.​
  • With regard to market entry, most foreign companies seek partnerships with domestic players such as Weichai, Sinohytec and Weifu, either in the form of JVs or by reaching strategic cooperation agreements. The chosen Chinese companies usually have established their edge in strong production capacity and/or intensive sales network, facilitating their foreign partners’ China operation in the future.​
  • For other companies who have ambitions in China’s hydrogen sector, designing an optimal market entry strategy and identifying appropriate partners has become even more important considering the already existing ecosystem established by such early-movers.​

Sinolytics is a European consulting and analysis company specializing in China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.


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