Charging Ahead or Gasping for Air? The Real State of EVs, Hydrogen Cars, and What Comes Next

The race to decarbonise transport has long promised a two-horse contest: battery-electric vehicles (EVs) and hydrogen fuel cell vehicles. A few years ago, you’d be forgiven for thinking the future was clear. Tesla’s meteoric rise, global net zero pledges, and tightening emissions regulations made it feel like EVs had already won. But fast forward to 2025, and the picture is murkier.

EV sales are growing, yes—but cracks are starting to show. Charging infrastructure lags behind consumer demand, grid pressures are mounting, and battery supply chains remain geopolitically fragile. Meanwhile, hydrogen, often dismissed as too expensive or impractical for cars, is quietly gathering momentum—especially in commercial transport and heavy-duty applications.

In other words: it’s not over yet.

And for entrepreneurs and investors alike, this ambiguity spells one thing—opportunity.

EVs: The Market Giant That’s Hitting Growing Pains

Let’s start with the basics. Globally, EVs made up about 18% of new car sales in 2024, according to the IEA, up from 14% in 2023. China leads the charge with over 30% EV penetration, followed by Europe at around 25%. The U.S. is catching up but remains below 10%.

In the UK, nearly 20% of new cars sold in 2024 were electric, with the government aiming for 100% zero-emission vehicles by 2035. But the road ahead isn’t without potholes:

• Range anxiety remains a sticking point.
• Charging infrastructure is uneven, especially outside major cities.
• EVs remain 10-20% more expensive than their combustion engine counterparts.

And then there’s battery production—dominated by China and reliant on lithium, cobalt, and nickel, all of which are subject to volatile pricing and environmental scrutiny.

Yet despite the friction, VC and private equity funding for EV-related startups continues to surge, particularly in areas like battery innovation, software for fleet optimisation, second-life battery use, and smart charging tech.

Hydrogen: The Underdog Making a Comeback

Hydrogen has been the “fuel of the future” for decades—but now, it’s actually happening. While the idea of a hydrogen-powered family car remains unlikely, hydrogen’s real advantage lies in heavy-duty, long-distance, and high-uptime applications: trucks, buses, trains, ships, and even aviation.

Governments are pouring money into hydrogen:

• The EU has pledged €45 billion for hydrogen projects through 2030.
• The UK’s Hydrogen Strategy includes £240 million for hydrogen production and aims for 10GW of hydrogen capacity by 2030.
• Japan and South Korea have been investing for years, with Hyundai and Toyota continuing to build fuel cell vehicles for niche markets.

The opportunities for entrepreneurs are often overlooked:

• Green hydrogen production (electrolysis startups)
• Storage and transportation innovations
• Hydrogen refuelling infrastructure
• Fuel cell tech for industrial and logistics use

There’s also an open runway for software and data companies building around hydrogen ecosystems—from usage analytics to carbon accounting.

Where the Smart Money’s Looking

Private capital is no longer just chasing the headline-grabbing EV unicorns. Investors are actively seeking less crowded niches where innovation still yields big upside:

• Battery recycling: A growing issue as the first generation of EVs reaches end-of-life
• Thermal management systems: Key to extending battery life and performance
• Alternative chemistries: Sodium-ion and solid-state batteries may leapfrog lithium tech
• Fleet electrification platforms: Especially for commercial transport and delivery networks

In the hydrogen space, early movers can still carve out major defensible territory in infrastructure and logistics. Hydrogen-as-a-service models and localised green hydrogen hubs are gaining attention. The capital expenditure is high, but so is the strategic value.

For Entrepreneurs: The Window Is Wide Open

The net zero transition is no longer a question of if—it’s how fast, and through which channels. Founders entering this space have the benefit of momentum, urgency, and policy support.

But it’s not just about hardware anymore. Software layers, user experience, predictive analytics, and supply chain resilience are now mission-critical in transport tech. Whether you’re building the next-gen charging network for remote communities or a hydrogen storage tech that beats current capacity norms, the opportunity is there.

Investors want to see:

• Scalable unit economics
• Strong IP
• Partnerships with OEMs or logistics firms
• A clear narrative that fits into the larger energy transition

What Comes Next?

EVs aren’t going anywhere—they’ll likely dominate light passenger transport for the next 20 years. But hydrogen will have a significant role in areas where batteries simply can’t compete. The market is splitting, not consolidating.

This is a moment where the infrastructure has not yet caught up with the ambition. That mismatch creates opportunity. It’s why we’re seeing sustained investment despite the macro headwinds—and why the next few years will be defining for founders and backers alike.

One thing is certain: If you’re waiting for the market to settle before getting involved, you’re already late.