Korean Automaker Hyundai Invests in Hydrogen-Powered Cars Despite EV Dominance – Bloomberg
Hyundai Motor Group Chairman Euisun Chung has made a number of bold moves since he took the company’s reins late last year. He’s put more money into electric vehicles and orchestrated a deeper shift into the world of robotics. But another important part of his effort to transform the company from conventional carmaker to mobility giant involves embracing hydrogen-based technology. And on that front, the jury’s still out.
The experience of Song Young-jin shows just how tough it will be for Hyundai to succeed in a world increasingly embracing electric-battery-powered motors. The 38-year-old sales manager in Euiwang city bought a Hyundai Nexo, whose hydrogen-fuel-cell engine emits only water vapor, in March 2020. Wooed by Hyundai’s advertising, he felt a hydrogen car would be good for long commutes and better for the environment.
The hydrogen-fuel-cell-powered Hyundai Xcient truck and Nexo crossover SUV at the AutoMobility show in Los Angeles on Nov. 18.
Photographer: Bing Guan/Bloomberg
By August though, fed up with having to drive 50 kilometers (40 miles) every week to the nearest hydrogen refueling station, he was looking to sell. In a double blow, Song watched in dismay as the value of a second-hand Nexo crashed on a used-car site by around $1,000 a month.
“I liked the hydrogen car itself—it’s quiet, and charging takes just 5 minutes, faster than an electric car,” Song says. “But refueling stations are lacking, and the maintenance costs [for parts such as hydrogen tanks] are huge, which is probably why they’re so cheap in the used-car market. Next time, I’ll buy electric.”
South Korea’s biggest automaker is the only global car company besides Japan’s Toyota Motor Corp. to make such a big bet on hydrogen, pledging to have all of its new commercial vehicles, including buses and heavy-duty trucks, run on either batteries or hydrogen fuel cells by 2028. Its goal is to introduce a “wide range of hydrogen-based mobility solutions by 2040,” Chung said in September, from passenger cars and trains to ships and even things that fly.
That puts Hyundai Motor Co. at odds with most of the world’s other large automakers. Volkswagen AG, an EV bull, has said it will have a global carbon-neutral fleet by 2050. Mercedes-maker Daimler AG has promised it will only sell EVs from 2030 on, while Honda Motor Co. is aiming for 100% EVs by 2040. Yet, like Toyota, Hyundai doesn’t see electric batteries as the only answer. Saehoon Kim, head of Hyundai Motor’s Fuel Cell Center, said in a YouTube video in September that “for the perfect realization of net-zero, we need electric and hydrogen. It’s good to have two cards in your hand.”
Consumers in Korea, however, haven’t warmed to hydrogen cars the way Hyundai might have hoped. The vehicles account for less than 0.1% of total sales in the country. (Even Kim has said he feels sorry for hydrogen car owners, acknowledging many were “having troubles refueling” but saying they should “endure this pain.”)
Yet Hyundai has gone “too far and invested too much money on hydrogen cars to stop now,” says former Hanwha Investment & Securities Co. analyst Ryu Yeon-wha, who works as a green-energy mobility consultant. The automaker seems to have underestimated the possibility of success for battery-powered EVs, Ryu says. “Just two years ago, an official at Hyundai told analysts that ‘we do not make a toy like Tesla.’ They told people battery-powered electric cars wouldn’t be able to travel for more than 150 kilometers, while …….