[Exclusive] First Overseas Hydrogen Fuel Cell Base to Be Established in Guangzhou, China

[Asia Economy Reporter Kim Hyewon] As the Chinese economy, hit hard by the novel coronavirus infection (COVID-19), shows a rapid recovery centered on manufacturing, Hyundai Motor Group is targeting the domestic market of 1.4 billion by considering the establishment of a hydrogen fuel cell system factory in Guangzhou, Guangdong Province, China. This is the first time Hyundai Motor Group is building a hydrogen fuel cell system production base overseas rather than domestically. ▶Related article on page 4

According to the industry on the 8th, Hyundai Motor Group submitted an export approval report to the Ministry of Trade, Industry and Energy, the competent authority, to promote the establishment of a hydrogen fuel cell system factory in Guangzhou. Since hydrogen fuel cell system technology is a national core technology developed with research and development (R&D) costs supported by the government, approval from the Minister of Trade, Industry and Energy is required for technology export under the "Act on Prevention and Protection of Industrial Technology Leakage (the Act)."

The hydrogen fuel cell system that Hyundai Motor Group intends to establish a production system for locally in China corresponds to the "hydrogen electric vehicle fuel cell system (hydrogen storage and supply, stack, and BOP) design and manufacturing technology," which is designated as a national core technology in the automobile and railway sectors under Article 9 of the Act. A government official said, "It is difficult to disclose details due to confidentiality obligations when handling national core technology export approval or reporting at the request of the relevant institution," adding, "The decision-making process under Article 11 of the Act is underway."

The most recent similar case was LG Display’s establishment of an organic light-emitting diode (OLED) panel production factory in Guangzhou. It took about five months to receive approval after submitting the export approval report to our government and undergoing review by the expert committee and the Industrial Technology Protection Committee. Afterward, it took more than six months to obtain approval from Chinese authorities.

An informed source said, "At the end of last year, when establishing the management plan, the goal was to start construction around May to June this year, but due to the COVID-19 variable, there is a possibility of delay in the investment plan." However, the source added, "The group’s determination to diversify future businesses is firm, such as starting global sales of hydrogen fuel cell systems from this year, so although there may be some adjustment in pace, investment execution within this year is expected as planned." Hyundai Motor Group has already completed the composition of dispatched resident personnel locally.

The hydrogen fuel cell system line that Hyundai Motor Group is building in Guangzhou, China, is called the "heart" of hydrogen electric vehicles. It consists of the fuel cell stack, which generates electric energy as the power source of the vehicle through a chemical reaction between hydrogen and oxygen, devices that supply hydrogen and air to the fuel cell stack, and thermal management devices that control the temperature of the coolant supplied inside the fuel cell stack, collectively called Balance Of Plant (BOP). In particular, the fuel cell stack independently developed by Hyundai Motor Group is a core component of hydrogen electric vehicles, playing the role of the "engine" in internal combustion engine vehicles. A Hyundai Motor Group official said, "Various options are being reviewed, but nothing has been finalized yet."