India launches hydrogen bus trials but battery vehicles hold cost advantage

Indian Oil Corporation launched two hydrogen fuel cell buses in late September 2023 as part of a 15-bus trial fleet to operate in Delhi, Haryana and Uttar Pradesh before year end, marking India's first operational hydrogen public transport deployment. However, comparative cost data from European studies shows battery electric buses running at 2.3 to 6 times lower cost per kilometre than hydrogen fuel cell equivalents, raising questions about hydrogen's near-term transport viability.

The IOC launch sits within India's broader decarbonisation programme for transportation, which encompasses vehicle electrification, flexible-fuel vehicles, biofuel blending and FCEV testing. Battery electric vehicles have moved ahead of hydrogen in commercial penetration, recording 5.6% sales penetration in overall automobile sales in FY2022-23. Globally, Toyota, BMW, Hyundai and Honda are producing or testing hydrogen cars, buses and heavy trucks, while domestic companies Reliance Industries and Ashok Leyland are developing heavy-duty FCEVs in partnership with Mercedes-Benz and Toyota respectively.

India faces specific infrastructure constraints that limit hydrogen vehicle deployment. The country's cylinder storage technology currently reaches only 350 bar, while leading international FCEV models require 700 bar to achieve competitive range. The absence of refuelling stations, specialised storage and transportation infrastructure means internationally available models such as Toyota's Mirai and Hyundai's Nexo cannot yet be sold in India. BEVs, by contrast, can draw on existing and rapidly expanding electricity infrastructure, and studies show they are approximately twice as energy efficient as FCEVs due to energy losses in hydrogen production, compression, transport and reconversion via fuel cells.

IEEFA and sector analysts recommend that India prioritise green hydrogen for hard-to-abate industrial applications — steel, fertilisers, chemicals and cement — where battery alternatives are not viable, rather than for light vehicle transport where BEVs are commercially superior and rapidly advancing. Hydrogen may justify investment for specific transport niches including forklifts, long-haul freight and shipping. India is encouraged to maintain technology neutrality for heavy-duty freight decarbonisation, continue research and development for targeted hydrogen transport applications, and develop an internationally aligned regulatory and certification framework covering green hydrogen production, storage, transportation and end-use standards.

Key figure — 5.6% — battery electric vehicle sales penetration in India's overall automobile market in FY2022-23