Back in 2022 we published our first article comparing the cost of hydrogen with that of gasoline. (Read: How does the cost of Hydrogen stack up against gasoline?) But we’ve recently received questions from readers and clients wondering if that analysis holds true today. In answer to those questions, we’re updating this analysis with the latest data.
Background
Hydrogen fuel cell vehicles (FCVs) are one type of zero emission vehicle (ZEV) which complies with California’s ZEV Regulation (stringent requirements which aim to support wide-scale ZEV adoption) and the Advanced Clean Cars II Regulation which aims to phase out the sale of new internal combustion engine vehicles in the state by 2035. But FCVs face numerous challenges including declining vehicle population, stagnating hydrogen fuel station network development, and customer dissatisfaction regarding refueling convenience. Setting these obstacles aside, this article focuses on another challenge facing FCVs: high fuel cost. California’s high gasoline prices (above $4/gallon) have made headlines nationwide; meanwhile, since 2014, hydrogen in California has retailed for approximately $14 per kilogram (kg), which is equivalent to $14/gallon of gasoline, and in 2025 hydrogen has retailed in California above $32/kg! According to hydrogen advocates, FCVs’ 27% and 50% higher fuel economy – compared to hybrids and conventional gasoline vehicles, respectively – helps keep FCV fueling costs competitive with gasoline-fueled vehicles, and hydrogen fuel cost will come down in the future due to higher volumes or greater economies of scale.
Reality Check
Let’s look at the data to see whether FCV fueling costs really fall in line with those of gasoline vehicles. The figure below displays fuel costs per mile for FVCs and gasoline vehicles using California’s historic gasoline and hydrogen retail prices. According to the U.S. Environmental Protection Agency’s (EPA) 2025 Fuel Economy Guide the average fuel economy of a FCV is 60 miles per kg (MPK) while gasoline cars get 30 miles per gallon (MPG) on average and gasoline hybrids come in at an average of 44 MPG. As can be seen in Figure 1, in 2025 FCV fuel cost is four and a half times higher per mile than a gasoline hybrid and three times higher than that of a conventional gasoline vehicle. To be competitive with hybrid gasoline vehicles on a per-mile basis, hydrogen would need to be priced at $5.88/kg; hydrogen has retailed at $32.94/kg in 2025 year-to-date.
Figure 1. Cost Per Mile for Hydrogen Fuel Cell, Hybrid, and Conventional Gasoline Vehicles (2013-2025) 
Sources: Stillwater Associates analysis of U.S. Energy Information Administration (EIA) regular gasoline prices and California Energy Commission Hydrogen Fuel Cell Program data
Retail Pricing Comparison
The California Air Resources Board (CARB) and Washington State Department of Ecology (Ecology) indicate that hydrogen fuel retail prices will be lower in the future. In June of 2020, the California Energy Commission (CEC) published a study that hydrogen advocates have used to claim that hydrogen prices could be as low as gasoline prices in five years.[1] Now, five years on, gasoline prices in California average $4.60 per gallon while hydrogen prices have shot past the $30/kg mark (which would be $15 per gasoline gallon equivalent (GGE) in a conventional gasoline vehicle even with the increased fuel efficiency of the FCV taken into account).
Claims about the declining cost of hydrogen defy historic trends of a similar gaseous fuel – compressed natural gas (CNG) – which has been sold in California for over 30 years. CNG has similar physical properties to hydrogen, albeit at a lower cost to distribute and compress. One can estimate hydrogen retail prices from the last 30 years of utilities’ natural gas purchase costs and compression expenses to retail CNG prices. With small adjustments, hydrogen retail prices can be derived from CNG prices by adjusting for higher hydrogen pressures, 80% methane-to-hydrogen conversion efficiency, and compressing 408 cubic feet (ft3) of hydrogen gas vs 100 ft3 of methane.[2]
Given Stillwater’s 25 years of experience evaluating each cost component required to retail hydrogen for FCVs, and all the inherent uncertainties and assumptions involved, we have created a model to illustrate potential hydrogen retail price trends, absent governmental intervention.
The figure below shows the historic CNG-based hydrogen retail prices past and projected – based on Pacific Gas and Electric (PG&E) CNG price data – contrasted against historic California retail hydrogen prices as well as CARB- and Ecology-forecasted hydrogen retail prices. CARB’s and Ecology’s projections – published in 2020 and 2022, respectively – defy both historic trends as well as current and projected CNG-based hydrogen retail empirical evidence. It is important to note that California’s historic retail hydrogen prices, though high, are actually lower than free market conditions would produce, thanks to CEC grants[3] that pay for hydrogen retail station construction costs (typically $1.0-$1.5 million) and, at times, hydrogen station maintenance.[4]
Figure 2. Historic, Forecasted, and CNG-Reference Retail Prices for Hydrogen 
Sources: Pacific Gas & Electric Tariffs, Washington Department of Ecology Clean Fuel Cost Benefit Analysis Report, and California Air Resources Board Zero-Emission Vehicle Program data
Importantly, most hydrogen research and reporting concerning future declines in hydrogen cost relate to uncompressed hydrogen. As such, these claims correspond to hydrogen production cost only, which makes up less than 20% of the total retail cost of hydrogen; compression and delivery make up the bulk of the retail price. In 2025, hydrogen retailed for $27.11/kg and $24.39/kg higher than gasoline prices matching the same fuel cost per mile for hybrids or conventional gasoline vehicles respectively. Hydrogen has been used commercially for over 80 years, so it is a well-developed technology. Stillwater Associates knows of no research or pending breakthroughs sufficient to bridge hydrogen’s significantly higher fuel cost compared to gasoline vehicles unless a significant treasure trove of natural hydrogen were to be found trapped under the Earth’s crust here in North America.
Hydrogen Hubs to the Rescue?
In 2020, the CEC proposed a strategy to reduce hydrogen fuel costs by increasing the use of renewable, low-carbon energy sources and leveraging carbon offset credits. By integrating more solar, wind, and other clean energy into hydrogen production, the state aimed to enhance efficiency while minimizing emissions. Additionally, securing carbon credits was intended to offset production-related emissions, allowing for cost reductions and improved market competitiveness. To this end California launched its Hydrogen Hub called ARCHES (Alliance for Renewable Clean Hydrogen Energy Systems) in July 2024, securing $12.6 billion in federal support. The Trump Administration’s Department of Energy is, however, considering cutting funding for four hydrogen hubs, including ARCHES, as part of broader budget reductions targeting clean energy projects. Given this funding uncertainty and the Trump administration’s strong oppositional stance toward climate change regulation and renewable fuel investments, the ARCHES Hydrogen Hub is unlikely to become a game-changer for the hydrogen retail market anytime soon; almost certainly not within the next four years.
FCV Population Takes a Turn
The sustained high-priced hydrogen is impacting FCV sales, as is evidenced by the downturn in FCV population in 2024, shown in Figure 3. Given that there is no existing solution for lowering hydrogen prices, this new decline in population should be expected to continue as a trend. Only increased federal and state investments and incentives, especially in fuel production and retailing, may help delay the demise of the hydrogen FCV experiment. In fact, one might say that FCV technology was made obsolete back in 2011 with the introduction of Plug-In Hybrid Electric Vehicles – providing zero-emission operation, fast refueling, and abundant refueling networks compared to battery electric vehicles and FCVs alike.
Figure 3. Fuel Cell Vehicle Population Trend 
Source: ZEV and Infrastructure Stats Data | California Energy Commission
Conclusion
While hydrogen fuel cell vehicles offer impressive efficiency and zero emissions, their per-mile fueling costs in 2025 remain three to four-and-a-half times higher than those of both gasoline and hybrid vehicles. For hydrogen to compete with gasoline vehicles on a cost-per-mile basis, significant reductions in hydrogen retail prices are still needed. As the transportation fuel landscape continues to evolve, staying informed and making strategic decisions is more important than ever. For expert analysis and guidance on fuel costs, vehicle technology, and market trends, reach out to Stillwater Associates for consulting support tailored to your needs.
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