From Austria to California: Why Hydrogen Fuel Stations Aren’t Breaking Even

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Austria’s recent announcement that it would shutter its entire network of hydrogen fueling stations caught many industry observers off guard. But for those closely tracking the economics, Austria’s exit wasn’t surprising at all. The stations faced persistently low vehicle numbers, low throughput, and mounting operating losses. This stark withdrawal illustrates a fundamental economic challenge facing hydrogen fueling infrastructure globally: without substantial, reliable vehicle fleets consuming significant hydrogen, most stations fail to generate enough revenue to cover even basic operational costs.

Building, operating, and maintaining a hydrogen refueling station is an exceptionally capital-intensive undertaking. According to industry analyses, initial capital expenditures typically range from $1.5 million to $3 million per station, depending largely on station size, capacity, storage requirements, and the technology employed. Operational costs are similarly steep, routinely exceeding $300,000 to $500,000 annually per station, driven by maintenance of complex compressors, storage tanks, dispensers, and safety systems required to handle high-pressure hydrogen.

The cost of hydrogen itself further complicates station economics: delivered gaseous hydrogen usually costs between $6 and $12 per kilogram wholesale, rising significantly higher for small-volume stations due to lack of economies of scale. Delivery methods, whether via high-pressure tube trailers, liquid hydrogen trucks, or onsite electrolysis, also profoundly impact costs. Collectively, these expenses typically push the final retail price for consumers in markets from Germany to California to $13 to $36 per kilogram, making hydrogen significantly more expensive per mile than electricity or gasoline.

California, frequently touted as America’s hydrogen leader, presents a telling example. By 2024, the state maintained approximately 74 public hydrogen fueling stations serving around 18,000 hydrogen vehicles, mostly Toyota Mirais and Hyundai Nexos. While vehicle numbers sound substantial, actual hydrogen consumption per station remains disappointingly low. According to the California Air Resources Board, a typical station dispenses roughly 50 kilograms of hydrogen per day, far below the threshold of about 200 kilograms per day generally considered necessary for profitability. That’s why hydrogen costs $36 per kilogram in the state, about 2.7 times more per mile than gasoline, and 13 times more per mile than battery electric.

That’s a big part of the reason there was an 85% decline in hydrogen car sales in the state in 2024. The other big part was that hydrogen refueling stations are out of service or lacking in hydrogen so often that no one can rely on being able to refuel. Even Toyota’s $15,000 of free hydrogen with every car doesn’t make the economics work out when you can’t get hydrogen.

This reality explains why Shell, previously committed to hydrogen retail in California, abandoned most of its hydrogen stations in early 2025, and left the refueling industry entirely. The economic reality is that you can’t make money selling hydrogen.

Germany’s experience mirrors California’s predicament, but at even lower utilization. The country boasts Europe’s largest hydrogen fueling network, with around 113 stations operational by the end of 2024. However, Germany’s hydrogen vehicle fleet remains negligible, totaling fewer than 2,000 vehicles nationwide. With an average German station serving fewer than 20 vehicles, many stations dispense only a handful of kilograms per day. Even generous assumptions of 10 kilograms daily throughput per station, at retail prices around $14 per kilogram, yield annual revenues of roughly $45,000. Every German hydrogen station is almost certainly operating deeply in the red, reliant entirely on government subsidies to avoid closure. This explains Germany’s sharply declining hydrogen vehicle registrations, reflecting consumers’ understandable reluctance to invest in cars that cost more to drive and with a refueling infrastructure that’s sparse and often out of service.

China has aggressively expanded hydrogen infrastructure, primarily targeting fleet applications such as buses and trucks. By late 2024, China operated around 384 hydrogen stations, many located in industrial clusters serving heavy-duty fleets. Here, economics are slightly more favorable, and some Chinese stations reportedly dispense several hundred kilograms daily, driven by intensive fleet use. Assuming a robust 200 kilograms daily throughput per station at approximately $10 per kilogram (reflecting subsidized industrial hydrogen prices), annual revenues could approach $700,000. However, operational expenses in China’s high-throughput stations, including frequent maintenance and costly equipment upkeep, still routinely exceed $500,000 annually. Moreover, this level of usage is confined to select locations; many other stations remain underutilized, significantly diluting overall profitability. Even in China’s relatively successful scenario, profitability is tenuous, often depending on substantial local government support, and stations frequently remain unprofitable or marginally profitable at best.

That’s probably why many of Beijing’s hydrogen stations are now fenced off and have rusting hydrogen buses parked among the sprouting wormwood shrubs a few years after the Olympics push for the molecule. The Olympics Committee appears to love hydrogen a lot more than economists do.

South Korea has the largest fleet, with over 34,000 hydrogen vehicles by 2024, mostly Hyundai Nexos. South Korea operates approximately 198 stations, suggesting a relatively high average of about 170 vehicles per station. If each vehicle consumed around 120 kilograms per year — a reasonable assumption given typical driving patterns — the average station might dispense roughly 20,000 kilograms annually, generating revenue around $160,000 at the prevailing retail price of approximately $7 per kilogram. While significantly better than Germany, this still falls far below typical annual operating expenses. Even South Korea’s relatively busy consumer-focused stations remain deeply reliant on subsidies and government funding, despite having one of the highest per-station vehicle counts in the world.

Japan, an early advocate of hydrogen vehicles, invested heavily in infrastructure, anticipating rapid consumer adoption that never materialized. By late 2024, Japan’s roughly 161 hydrogen stations served fewer than 9,000 hydrogen vehicles nationwide. With each station averaging around 55 vehicles — many of which see limited annual mileage — utilization remains stubbornly low. Assuming a plausible average of about 10 kilograms per day at approximately $7 per kilogram, annual station revenues are roughly $30,000. Japan’s stations thus face some of the largest per-station annual operating losses globally, requiring perpetual public support merely to keep doors open. This stark mismatch between revenue and cost is a core reason why hydrogen vehicle growth in Japan has stagnated.

When examined collectively, the global hydrogen fueling landscape reveals a uniform pattern: station revenues consistently fail to meet even basic operational expenses. That matches my recent revenue estimate for British Columbia’s HTEC stations, which are likely making less than $30,000 a year each, making the recent opening of a new one a remarkable choice.

My hydrogen for transportation deathwatch list — not entirely schadenfreude, as one of my 2024 Redefining Energy predictions was a bloodbath in the space, and I have to bring receipts — has 24 refueling firms in it, with two already defunct and two, Shell and Austria’s OMV, having dropped out of the space.

Stations across Canada, California, Germany, Japan, South Korea, and China uniformly lose money, and the level of subsidy required for economic viability remains high. It will remain high as hydrogen and hydrogen distribution will stay costly and no one will be putting millions of hydrogen vehicles on the road. Operators must either rely on sustained government intervention or face bankruptcy.

While enthusiasm for hydrogen persists politically, market realities cannot be ignored indefinitely. Austria’s and Shell’s complete market withdrawal represents merely the first clear acknowledgment of an inevitable broader retreat from hydrogen fueling infrastructure. It won’t be the last.