Sinolink: Policy reinforcement and urban agglomeration expansion, hydrogen vehicle demonstration aims to fill the gap.

Sinolink released a research report stating that the fuel cell vehicle demonstration city group has welcomed new members, with three cities joining the hydrogen vehicle demonstration city group. In late March, Shaanxi Lvliang, Henan Puyang, and Xinjiang Hami successively announced their intention to join the fuel cell vehicle demonstration city group. With the settlement point of the 14th Five-Year Plan approaching, policies are continuously being strengthened, highlighting opportunities for fuel cell component enterprises. According to the plan, there will be approximately 22,000 fuel cell vehicles in 2025. With the rapid construction of hydrogen energy demonstration projects opening up application scenarios and continuous subsidies being issued, enterprises in high-value links such as fuel cell systems (accounting for approximately 60% of vehicle costs), stacks (accounting for about 60% of system costs), and onboard hydrogen supply systems (accounting for about 20% of vehicle costs) are the first to seize opportunities. Sinolink's main points are as follows: Policy efforts and urban expansion are key drivers, with a surge in sales expected by the end of the year According to the "Mid-to-Long-Term Development Plan for Hydrogen Energy Industry (2021-2035)", the number of fuel cell vehicles by 2025 should not be less than 50,000, with a planned target of around 33,000 for demonstration city groups. As of February 2025, there are about 28,000 hydrogen vehicles, achieving only 55% of the planned target for 2025. The five major demonstration city groups have only promoted about 16,000 vehicles, with a completion rate of less than 50%. Shaanxi Lvliang, Henan Puyang, and Xinjiang Hami joining the fuel cell vehicle demonstration city group have sent a signal of policy continuity, coupled with the support of the five departments' "Notice on the Approval of Adjustment and Implementation Plans for the Demonstration Application of Fuel Cell Vehicles in City Groups". This undoubtedly injects confidence into the industry. Referring to the experience of filling 60% of the gaps in the last year of the "Ten Cities and Thousand Vehicles" program from 2009 to 2012, combined with the targets set by leading cities such as Beijing and Shanghai, the annual sales are expected to exceed 10,000 vehicles, with a fleet of 40,000 to 45,000 vehicles. Local fiscal policy instilling market confidence, speeding up hydrogen infrastructure construction and scenario closure Puyang is seeking 80 million yuan in central and provincial reward funds to leverage 200 million yuan in social capital investment, focusing on hydrogen refueling stations and hydrogen vehicle operations; Hami plans to develop green hydrogen projects based on abundant wind and solar resources, with the potential to reduce hydrogen production costs and form a closed loop in heavy-duty truck logistics scenarios; Lvliang, with hydrogen resources from coking by-products, will promote the large-scale substitution of coal transport scenarios with hydrogen-powered heavy-duty trucks. By combining local fiscal policies with resource endowments, the transition from "policy demonstration" to "economically driven" hydrogen energy will be accelerated, driving the speed of hydrogen energy infrastructure construction and scenario applications. The era of accelerated volume growth for fuel cell vehicles has arrived, with the industry showing commercial potential Policy guidelines and subsidies have already driven the demonstration of fuel cell vehicles, and a year-end surge can boost sales. The current coverage of hydrogen refueling stations (approximately 500) and the overall life cycle cost of hydrogen vehicles are still key constraints for future sustained volume growth. Achieving cost parity on a full life cycle basis and targeted subsidies will be the focus of the next stage. During the Two Sessions, the National Development and Reform Commission proposed to promote the establishment of a "carrier-level" national venture capital fund for investment in hydrogen energy storage and other fields, which, through the "capital + policy" dual-wheel drive, will facilitate the integrated development of the hydrogen production, storage, transportation, and application industry chain, and develop business models and form regional synergy effects. With the continuation of relevant subsidy policies, the construction of hydrogen fast corridors, the gradual expansion of infrastructure, and cost reduction of equipment, the promotion of fuel cell vehicles will continue to accelerate. Risk warning Policy implementation slower than expected, slower than expected construction of hydrogen refueling stations, and slower than expected reduction in the cost of hydrogen gas.