China is doing to hydrogen electrolysers what they did to solar cells and batteries

## China is Doing to Hydrogen Electrolysers What They Did to Solar Cells and Batteries

Jens Schmidt, the Chief Technology Officer (CTO) of Tree Energy Solutions (TES), recently sounded an alarm that Western manufacturers might have already lost the race in the green hydrogen sector to their Chinese counterparts. This development mirrors China’s previous strategies in achieving dominance in solar cells and lithium batteries, where they leveraged their manufacturing prowess to outcompete Western producers on both cost and quality.

### Chinese Electrolysers: High Quality at Low Costs

Schmidt’s observations followed an intensive 15-day tour of various Chinese electrolyser factories and operational sites. His assessments reveal that Chinese manufacturers such as Sungrow Power Supply Co., Ltd., Peric, and LONGi Hydrogen are producing high-quality electrolysers at a fraction of the cost of their Western counterparts. This significant cost difference is not merely due to cheaper labor but is attributed to **the massive scale, standardization, and advanced automation in Chinese factories.**

Schmidt highlighted that the Chinese approach allows them to minimize engineering and construction costs, significantly reducing the total system CAPEX compared to Western products. He noted that the Chinese factories he visited were working on multiple large-scale projects simultaneously, underscoring their capacity and efficiency.

### Lessons from Solar and Batteries

China’s strategy in the hydrogen electrolyser market bears a striking resemblance to its approach in the solar and lithium battery industries. In solar energy, China quickly scaled up production, invested in automation, and drove down costs, capturing a significant share of the global market. Similarly, in the lithium battery sector, Chinese companies like CATL and BYD leveraged their manufacturing capabilities to become leading suppliers, again outcompeting many Western firms.

In both cases, China’s dominance was facilitated by strong domestic demand, substantial government support, and a focus on building extensive supply chains. These factors allowed Chinese companies to innovate rapidly and scale production, resulting in lower prices and improved product quality.

### Western Manufacturers at a Crossroads

Schmidt’s assessment serves as a wake-up call for Western policymakers and manufacturers. He expressed concern over the European Union’s slow progress and bureaucratic hurdles, which have delayed the development of hydrogen infrastructure. The EU’s hydrogen backbone is projected to take until 2037 to reach 10,000km, a stark contrast to China’s rapid advancements.

Industry insiders echoed Schmidt’s concerns, emphasizing the need for Europe to streamline regulations and accelerate innovation to remain competitive. They pointed out that while Western manufacturers have strong products, their slower pace and higher costs could lead to them being outpaced by more agile Chinese companies.

### The Path Forward

To counter China’s growing influence in the hydrogen sector, Western countries must adopt strategies that encourage rapid innovation and scale. This involves fostering public-private partnerships, enhancing research and development, and creating a regulatory environment that supports swift implementation of green technologies.

Jens Schmidt’s insights highlight a pivotal moment for the global green hydrogen market. The West must learn from China’s playbook in solar and batteries, prioritizing speed, cost-efficiency, and quality to ensure they can compete on the global stage. Without such measures, the dominance China achieved in solar cells and batteries could very well be replicated in the hydrogen electrolyser industry, with far-reaching implications for the future of green energy.

I’m not really surprised by this. China is definitely a leader in material sciences for sure.. at least by everything I’ve seen in red.