From Subsidies to Scrap: The Real Story of Hydrogen Vehicle Fleets

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Aberdeen’s hydrogen double decker buses are being withdrawn, and a German municipality was left with seven hydrogen garbage trucks that could not refuel. Paris saw Hype’s hydrogen taxi fleet collapse after years of public claims about scale. Liverpool is trying to convert its abandoned hydrogen bus fleet. More hydrogen fleets will be abandoned in the coming years as continuing high operating costs, refueling unreliability, lack of actually low carbon hydrogen and ongoing proof that battery electric buses are much cheaper, more reliable and fit for purpose confronts fleet owners.

Every time one of these stories appears, readers ask the same questions. Can the vehicles be converted to battery electric? Is there a resale market for used hydrogen vehicles? Or are taxpayers simply writing off assets that cost two to three times as much as conventional vehicles? The answers are not ideological. They are structural, financial, and grounded in how subsidy programs and procurement rules are designed.

A hydrogen bus is, at its core, an electric bus. It has an electric traction motor, inverter, high voltage distribution, regenerative braking, and a battery pack. What makes it different is the addition of a fuel cell stack and high pressure hydrogen tanks, typically at 350 bar for buses. The battery in a fuel cell bus is small compared to a battery electric bus, often in the range of 30 to 100 kWh, because the fuel cell provides continuous power, with the battery being used delivery of electricity to the motors against fluctuating demand loads. A modern battery electric bus may carry 350 to 500 kWh, sometimes more. In principle, that shared electric architecture means conversion from fuel cell to battery electric is possible. You remove tanks and stack, reinforce the roof or rear compartment, add several hundred kWh of batteries, integrate charging systems, and re-certify the vehicle. Engineering feasibility is not the constraint.

Conversion is attempted, but it’s rare, potentially unique in that I can only find a single example. Liverpool City Region announced the conversion of 20 hydrogen double deckers to battery electric after abandoning their hydrogen bus aspirations in late 2025. Most conversion firms focus on diesel to battery electric repowers, where a standard internal combustion drivetrain is removed and replaced with motors and batteries, because there are a very large number of diesel buses around. Fuel cell buses already have motors and inverters, but they also carry expensive hydrogen systems that must be removed, safely decommissioned, and structurally replaced. If conversion costs $300,000 to $500,000 per bus and a new battery electric bus costs $700,000 to $900,000 with warranty, not to mention governmental fiscal support, many agencies will compare those numbers closely. The residual value of the hydrogen bus before conversion is because the resale market is close to nonexistent. If the conversion leaves the bus with no OEM warranty, agencies face additional risk.

The picture is even less favorable for heavy vehicles such as garbage trucks. Refuse trucks are low volume and heavily customized. They are built to specific axle loads, bin lifters, route profiles, and depot constraints. A fleet of seven hydrogen garbage trucks represents a bespoke configuration. Converting seven unique vehicles requires engineering hours that do not amortize across hundreds of units. If each truck originally cost $1.2 million and conversion costs $400,000 per unit, the total capital exposure remains high. In that context, scrapping and replacing with standard battery electric trucks is more predictable from a risk standpoint.

Passenger cars present a different constraint. Hydrogen taxis such as Toyota Mirai sedans were not designed for modular repowering. The hydrogen tanks are integrated into the body structure. The battery pack is small. Converting one to battery electric would require extensive structural modification, new battery packaging, new cooling systems, and re-certification. The cost would exceed the market value of the vehicle. When Hype’s fleet in Paris struggled, the pathway was not conversion but liquidation and redeployment attempts. At least for hydrogen cars there is a feeble resale market, with used Hyundai Nexos and Toyota Mirais available for next to nothing, usually only the value of any remaining hydrogen subsidy plus a thousand or two.

The subsidy environment reinforces these outcomes. In Canada, the federal Incentives for Medium and Heavy Duty Zero Emission Vehicles program is explicit that eligible vehicles must be new and not previously registered. Conversions are excluded. If a transit agency buys a used hydrogen bus from another city, it cannot access the federal incentive. That incentive can be tens of thousands of dollars per bus. Removing it shifts the economics immediately. In the United States, transit bus funding flows largely through Federal Transit Administration grant programs such as Low-No and Bus and Bus Facilities. These programs are structured around competitive applications for new vehicles and associated infrastructure. Buy America compliance rules apply. The framework is built for planned procurement of new buses, not opportunistic purchase of used hydrogen units from shuttered fleets.

Germany provides one of the most generous hydrogen bus subsidy frameworks in Europe, unsurprisingly. The federal climate friendly bus program supports incremental investment costs relative to diesel buses, and public information from Projektträger Jülich indicates support rates up to 80% of eligible incremental costs in some cases, explaining why Germany has historically bought more hydrogen buses than any other European country although the lack of procurement announcements in 2025 make it clear that’s coming to an end.

If a diesel bus costs $500,000 and a hydrogen bus costs $1.1 million, the incremental cost is $600,000. An 80% support rate could cover $480,000 of that difference. That is a powerful incentive to buy new hydrogen buses under a structured call. The program is project based. Agencies submit proposals before procurement. Infrastructure such as hydrogen refueling can also receive support. None of this is designed for buying used hydrogen buses from a failing fleet in another region. The accounting model depends on comparing a new hydrogen bus to a new diesel baseline, not comparing a used hydrogen bus to anything.

When comparing a new Solaris hydrogen bus in Germany to a used hydrogen bus from a shuttering fleet, the differences become clear. The new Solaris unit is eligible within a federal call. It comes with OEM warranty, parts supply agreements, and the ability to integrate infrastructure funding. The used bus may have five to eight years of service life remaining, but hydrogen tanks have finite certification periods. Fuel cell stacks degrade over time. Without manufacturer support, maintenance risk increases. Insurance premiums may reflect that uncertainty. If the used bus costs $300,000 but requires $200,000 in infrastructure adjustments and cannot access subsidy support, the apparent bargain evaporates. This doesn’t remotely mean buying a new Solaris hydrogen bus is remotely a good idea, but if a transit agency is committed by years of bad decisions to starting or continuing a hydrogen fleet, buying a new bus from Solaris is the least worst option.

My recent analysis indicating that peak hydrogen bus deliveries in the EU occurred in 2025 suggests the technology is not entering a sustained growth phase but instead clearing earlier procurement backlogs. Across the EU, hydrogen buses represented only about 4% of new city bus registrations in 2025, with Germany at roughly 9% and most other countries far lower or already pivoting decisively to battery electric fleets. Germany being the largest bus market by far and having 9% purchases skews the EU percentage upward considerably, with Germany’s registrations representing over 40% all all EU registrations of hydrogen buses. Much of the 2025 total reflects orders placed in 2023 and 2024 working through manufacturing lead times rather than fresh policy momentum. New hydrogen awards in 2025 appear limited, and several early adopter markets have shifted entirely toward battery electric buses. Resale markets depend on expanding fleets, active OEM pipelines, and a growing ecosystem of operators who need compatible vehicles and parts. When deliveries peak and begin to decline, that ecosystem contracts. Fewer agencies are investing in hydrogen infrastructure, fewer technicians are being trained, and fewer operators are willing to assume the risk of a niche drivetrain. A peak followed by retrenchment makes a robust secondary market for used hydrogen buses even less plausible, increasing the likelihood that surplus units will be stripped for parts or retired rather than resold.

Scale matters. According to ACEA’s Vehicles in Use Europe 2023 report, there are over 714,000 buses in the European Union. The number of hydrogen buses globally is in the low thousands. CALSTART reported 575 full size fuel cell transit buses in the United States as of mid 2024. Even if Europe has 1,000 to 1,500 hydrogen buses, they represent well under 1% of the total bus fleet. In North America, there are over 10 million single unit trucks and more than 3 million combination trucks in the United States alone, based on Federal Motor Carrier Safety Administration data. Hydrogen heavy vehicles are statistical noise in comparison. The opportunity to build a large industry around repowering stranded hydrogen fleets is constrained by the small absolute numbers. Where it occurs it will be a local small scale entrepreneur taking advantage of the opportunity to buy a bunch of vehicles for next to nothing with the hope of making a one off profit off of the retrofits, or as in the case of ex-Nikola executives, score more subsidy largess.

The resale market requires matching conditions. A buyer of a used hydrogen bus must already have hydrogen supply, refueling infrastructure, trained technicians, safety procedures, and insurance comfort with 350 bar systems. Aberdeen is exiting hydrogen because costs were mounting, the existing hydrogen refueling operator wasn’t interested in large capital outlays to keep the station operating without significant fiscal guarantees and the new hydrogen refueling system hadn’t broken ground. Another city without hydrogen infrastructure will not buy those buses. A city with hydrogen infrastructure is likely already operating its own fleet and will prefer new vehicles with subsidy support and warranty coverage.

In motion charging is sometimes raised as a rescue pathway. In cities with trolleybus systems or overhead charging corridors, battery electric buses can draw power while driving and recharge onboard batteries. In theory, a hydrogen bus could be converted to add an inexpensive pantograph and operate under such infrastructure with its existing smaller batteries, a cheaper alternative. In practice, cities that have chosen in motion charging have explicitly not chosen hydrogen, so repurposing buses within the fleet isn’t possible and the conversion and used market constraints apply.

What happens in most cases is quieter. Agencies attempt resale. When no buyer appears, vehicles are stripped for whatever useful parts can be reused on battery electric and diesel buses. Fuel cell stacks contain valuable materials. High voltage components can be reused, although not likely by the transit agency. After that, complete scrapping is common. Hydrogen tanks are composite structures with limited reuse value outside certified service. When original purchase prices were $1 million per bus and scrap value is a tiny fraction of that, write downs are large. Cities with hydrogen fleets are facing significant ongoing fiscal burdens due to the bad decisions. Cities just trialing hydrogen buses due to legacy decisions that they can’t escape need to spend serious time on risk mitigation to avoid the same issues, as I noted in a recent workshop guide that I’ve shared with a couple of city managers who are in that boat.

Hydrogen buses and trucks were often procured at two to three times the cost of diesel equivalents. If a diesel bus costs $500,000 and a hydrogen bus costs $1.1 million, the capital premium is $600,000. Even with an 80% subsidy on the incremental cost, taxpayers fund a large portion of the premium. If the vehicle delivers only half its expected service life because infrastructure collapses or operating costs prove high, the effective cost per kilometer rises sharply. A bus designed for 12 years of service that operates for six years doubles its capital cost per year.

The lesson is not that conversion is impossible. Liverpool demonstrates that some agencies will at least attempt it, although the outcomes are unknown at present. The lesson is that subsidy structures, procurement rules, infrastructure dependence, and scale realities shape outcomes. Funding programs are aligned with new procurement and structured transition projects. Used hydrogen buses from collapsing fleets do not fit neatly into those frameworks and the market is shrinking, not growing, leaving no upside for used vehicles. The number of vehicles involved is small relative to total fleets. The economics point toward selective parts recovery and scrapping. The write downs reflect early stage experimentation colliding with infrastructure fragility and policy design.