Automotive fuel cells will have nearly a 4% market share, with 608,000 vehicles by 2010, according to a new study by Allied Business Intelligence. Market penetration can rise as high as 1,215,000 fuel cell vehicles, which will represent 7.6% of the total US Automotive Market, says ABI. Fuel cell power will reach tens of thousands of vehicles by 2003 to 2004.

Proton Exchange Membrane (PEM) fuel cells will dominate the fuel cell market with 80% of all automotive fuel cells by 2010.

"Fuel cell technology is so appealing that it will have an enormous impact across all energy markets. Besides PEM fuel cells, which have received billions of dollars in research and development funding, niche technologies will gain 5% to 10% market share of this multibillion dollar market," says ABI Senior Analyst K. Atakan Ozbek, the author of the report. "We will see dramatic changes sooner than most people think, and that will lead to early mass commercialization," says Ozbek.

One of the major issues with automotive fuel cells is not the status of the technology, but rather bringing down the costs with real manufacturing capacity starting at 100,000 units. A critical challenge facing fuel cell developers is climbing "the learning curve" to achieve high volume production. Currently, none of the fuel cell developers have the production capacity for what is now being designed and built. Mass production will be reached by the end of the decade, when fuel cells will become fully price-competitive with internal combustion engines.

Following market penetration in the US, automotive fuel cells will gain market share in Japan and the European Union, particularly in Germany. Japan may see as high as 4.5% fuel cell market penetration by 2010, compared to 3.7% in Europe.

Allied Business Intelligence Inc is an Oyster Bay, NY-based technology research think tank specializing in communications and emerging technology markets. ABI publishes strategic research on the broadband, wireless, electronics, automation, energy and transportation industries. Details of these studies can be found at www.alliedworld.com or call 516-624-3113 for more info.