[Upcoming Hydrogen Economy] Hyundai Opens Doors to Hydrogen Cars... Expanding the Ecosystem

South Korea's Hydrogen Vehicle Market Share 38%... Higher Than US and China
Hyundai Motor World's First Mass Production of Passenger and Commercial Models
"Commercial Vehicle Carbon Emissions Rising... Protecting Environment with Hydrogen Vehicles"
Guangzhou Fuel Cell System Factory to Operate This Year

South Korea is the country where hydrogen fuel cell vehicles are sold the most. According to data from the International Energy Agency, 38% of the fuel cell vehicles sold worldwide are in South Korea. This is more than in the United States (24%) or China (16%), the world's largest automobile markets.

The influence of Hyundai Motor Company, which was the first global automaker to start mass production of hydrogen vehicles, is significant. The company has been developing hydrogen fuel cell technology since the 1990s by establishing dedicated teams. In 2013, it launched a hydrogen vehicle based on the mid-size sport utility vehicle (SUV) Tucson, and in 2018, it released the dedicated model Nexo. The Xcient, introduced in 2020, is also the world's first mass-produced large hydrogen truck.

Hyundai's large truck Xcient equipped with a hydrogen fuel cell system. It was exported to Europe in 2020 as the world's first mass-produced hydrogen truck.

Hydrogen vehicles are considered the ultimate eco-friendly cars because they use smaller batteries than pure electric vehicles and are easier to refuel. However, since the market is still in its early stages, large-scale mass production systems have not been established, making them expensive. The refueling infrastructure is also insufficient. This is why not many companies have fully entered the market yet. According to data from market research firm SNE Research, 2,131 hydrogen vehicles were sold worldwide from January to February this year. Among them, Hyundai sold 1,296 units, accounting for more than 60% of the market share.

Toyota, which leads with the sedan-type hydrogen vehicle Mirai, holds 28%, while Chinese companies such as Foton, a subsidiary of Beijing Automotive that manufactures hydrogen buses, and Wanshang have less than 2% market share. As of last month, there are 31,476 registered hydrogen vehicles in South Korea, mainly passenger cars. Following passenger cars, large hydrogen trucks were introduced at the end of last year, and high-speed hydrogen buses began domestic sales this year.

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If the core components of electric vehicle drivetrains are motors and batteries, hydrogen vehicles rely on fuel cell systems. High-pressure hydrogen reacts chemically with oxygen in the air to generate electrical energy, which is then used to power the motor. Hyundai Motor Company has branded its hydrogen fuel cell system as HTWO. The main hubs for this technology are South Korea, the United States, China, and Europe, all of which highly value hydrogen as a next-generation energy source. The company has set a goal to increase its fuel cell system production capacity to 700,000 units by 2030.

Additionally, Hyundai expects the market to be activated mainly by commercial vehicles such as buses and trucks and plans to apply hydrogen fuel cells to all commercial vehicle lineups by 2028. The company is developing various products, including small commercial vehicles widely used in urban areas, autonomous driving technology-applied 'trailer drones' for logistics sites, and 'rescue drones' applicable in disaster zones. Considering the difficulty of building refueling infrastructure immediately, Hyundai also introduced a mobile refueling service last year. This service equips large trucks with hydrogen compressors, storage tanks, coolers, and refueling devices to function entirely as refueling stations.

The company explained, "Since commercial vehicles typically have much longer average driving distances and times, the amount of carbon emissions per vehicle is higher than that of passenger cars. By proactively equipping fuel cells, we can reduce emissions and contribute to environmental protection."

Hydrogen fuel cell system developed by Hyundai Motor Company

The China-specific Nexo was recently unveiled at the Shanghai International Motor Show. It is a model based on Hyundai's existing hydrogen fuel cell dedicated model, Nexo, and is virtually the same model except for the fuel tank pressure.

At the recently held Shanghai International Motor Show, Hyundai showcased a China-specific version of the Nexo. It is almost identical to the Nexo sold domestically and internationally, but the fuel tank pressure has been reduced by about half to comply with local regulations. The vehicle's interior and exterior are virtually the same, with some differences in driving range. Hyundai selected Guangzhou, China, as the site for its first overseas hydrogen fuel cell factory in 2021 and has essentially completed construction. This is also the first large-scale dedicated hydrogen fuel cell system factory in China.

China also views hydrogen vehicles as a key to carbon neutrality in the transportation sector and has set goals to build 300 refueling stations and have 50,000 hydrogen vehicles by 2025. The number of hydrogen vehicles sold in China last year was 3,367, more than double the 1,586 units sold the previous year. This growth rate is the highest among major global markets, including South Korea. Hyundai, which leads the hydrogen vehicle market, cannot help but pay close attention to the Chinese market.

Industry insiders expect that Hyundai's next-generation hydrogen fuel cell system (3rd generation), targeted for release this year, will be delayed by about 2 to 3 years from the original schedule. The development focuses on reducing size while improving output and durability, but cost issues are a major obstacle. Hyundai aims to reduce the price of the 3rd generation hydrogen fuel cell system to less than half of the current cost.

A diorama aerial view of HTWO Guangzhou in China. It is Hyundai Motor's first overseas hydrogen fuel cell system factory and was recently exhibited at the Hyundai Motor booth at the Shanghai International Motor Show in China.