Euisun Chung has made a number of bold moves since taking the helm of the company. He put more money into electric vehicles and made a deeper shift into the world of robotics. He is trying to transform the company from a conventional carmaker to a mobility giant by embracing hydrogen-based technology. The jury is still out.
The experience of Song Young-jin shows how difficult it will be for the company to succeed. A sales manager in Euiwang city bought a hydrogen-fuel-cell engined car in March 2020. He thought a hydrogen car would be better for the environment than a regular car.
At the AutoMobility show in Los Angeles, the hydrogen-fuel-cell-powered Xcient truck and Nexo SUV were on display.
He was looking to sell because he was fed up with having to drive 50 kilometers every week to the nearest hydrogen station. Song watched in shock as the value of a second-handNexo crashed on a used-car site, costing him $1,000 a month.
The hydrogen car is quiet, and it takes just 5 minutes to charge it. Maintenance costs for parts such as hydrogen tanks are huge, which is why they are so cheap in the used-car market. Next time, I will buy electric.
South Korea's biggest car company is the only one that doesn't use Toyota Motor Corp.'s hydrogen fuel cells. In September, Chung said that the goal was to have a wide range of hydrogen-based mobility solutions by the year 2040.
Most of the world's other large automakers are at odds with the company. Volkswagen said it will have a global carbon-neutral fleet by the year 2050. Honda is aiming for 100% EV by the year 2040, while Daimler promises to only sell EVs from the year 2030. Toyota doesn't see electric batteries as the only answer. The head of the Fuel Cell Center at Hyundai Motor said in a video that electric and hydrogen were needed for the perfect realization of net-zero. It is good to have two cards in your hand.
Consumers in Korea haven't warmed to hydrogen cars the way they might have hoped. The vehicles make up less than 1% of total sales. Kim acknowledged that many hydrogen car owners were having trouble with their refueling, but he said they should endure this pain.
Ryu Yeon-wha, who works as a green-energy mobility consultant, says thatHyundai has gone too far and invested too much money on hydrogen cars to stop now. Ryu says that the automaker seems to have underestimated the potential for success. Two years ago, an official atHyundai told analysts that they did not make toys likeTesla. They told people that hydrogen cars are better because they can travel for more than 150 kilometers. The driving range of electric cars has improved.
Some hydrogen-powered vehicles have advantages. They charge faster and are more practical for commercial use because they are heavier and take longer to charge than hydrogen vehicles.
Korea has more hydrogen cars on the road than any other country, with 18,500 passenger hydrogen-fuel-cell cars sold since 2016 trumping even Japan, a far larger market where rival technologies are also trying to gain ground. The lack of refueling infrastructure is a sticking point.
An anonymous petition with 2,277 signatures was posted on the Korean presidential office website in January complaining about the cost of hydrogen cars and the high maintenance costs associated with the fuel-cell stack.
As global demand for fuel-cell vehicles increases, it is expected that sales of fuel-cell vehicles will increase. In South Korea, the company sold about 6,400Nexos and exported an additional 875. The company sold about 87,000 battery-powered electric cars around the world over the same period.
The group said that it was backing hydrogen to play a significant role in building a sustainable future and reducing society's dependence on fossil fuels. After two decades at the forefront of fuel-cell technology development, the group will expand its fuel-cell technologies for wider application in its vehicles.
The hydrogen-fuel-cell energy testing facility is in Ulsan.
The hydrogen focus of the automaker has two roots. The personal interest shown in the technology by Chung's billionaire father is the first thing. Chung used to commute to the office in the company's Tucson ix hydrogen car. South Korea has long supported hydrogen vehicles. The number of refueling stations has been increased by the administration of President Moon. The government gives buyers almost 50% subsidies on the cars themselves, while also giving large subsidies to commercial bus operators and owners of refueling stations. The 500,000 hydrogen cars that will be produced annually by the beginning of the 20th century are a result of support from Moon.
The government will have to spend about $800 million this year to build ahydrogen economy, which is just 0.04% of South Korea's 2020 gross domestic product. Government subsidies reduce the cost of aNexo by almost half. In Korea, the Model 3 retails for around $50,000.
Ulsan, a coastal hub about 300 kilometers south of Seoul, is being created as a "H2 Pilot City". The unemployment rate in Ulsan last year was the highest in the nation, as the shipbuilding and petrochemicals industries decline as young people move away.
Half of the country's current supply is produced by Ulsan. A plant with an annual capacity of 13,000 tons of hydrogen will be built in the city by the year 2030. Installation of hydrogen fuel cells in apartment blocks, hospitals, and even at the manufacturing plant is the ultimate goal.
The H2World in Ulsan has a hydrogen-fuel-cell tram concept.
Other companies in Ulsan are getting on board. The hyosung Corp. is building hydrogen refueling stations and the Lotte Fine Chemical Co. is trying to distribute green hydrogen. The hydrogen produced in Ulsan is derived from natural gas and is the least renewable form of the gas.
Ulsan may be bubbling, but its enthusiasm hasn't been felt throughout the country. According to the data obtained by Noh Woong-rae, a lawmaker from the ruling party, the number of hydrogen refueling dispensers nationwide stood at 117. There is one EV charging point for every two battery-powered cars.
Two people died and six were injured when a hydrogen tank exploded in Gangwon province, and the location of hydrogen refueling stations is a challenge because of public concerns. A single fuel station in the city cost the local authorities about 2.5 million dollars, while a gas station with four pumps cost about $84,000.
Electric cars are more energy efficient than hydrogen cars because of their losses from heat and friction. Kim says that hydrogen cars aren't economical for consumers yet. It is a losing business for the company. They are selling a hydrogen car for $60,000, but it costs about $84,000 to produce.
The Ulsan facility is for hydrogen-fuel-cell energy testing.
A BNEF report in August found that Korea's current government funding for hydrogen is too focused on supporting the use of gray hydrogen in less promising areas such as fuel-cell vehicles, instead of development of green hydrogen for use in industries such as steel production. The head of Asia Pacific research at BNEF said that most passenger car manufacturers have scaled down their fuel-cell programs over the last five years.
According to the Korea Automobile Manufacturers Association, an advocate for automobile suppliers there,Hyundai may be enamored of hydrogen cars because they have more components than EVs, which is expected to put many auto-parts suppliers out of business. That could cause labor problems for the carmakers who build fewer vehicles.
KAMA representative Kwon Eun-kyoung said that Korean auto-parts makers aren't prepared for hydrogen or electric cars. The union in Korea criticized the decision of the company to invest in the U.S. There is a dilemma between developing a new technology and keeping the workforce.
Others think the hydrogen bet is a smart strategy. In places such as Southeast Asia and Africa where affordability and infrastructure issues could limit demand for EV, hybrid cars will play a crucial role in decarbonizing transportation.
The chief investment officer at J&J Investments Co. says that a battery could move a car just a decade ago. Who knows? There could be another electric car in the future that will change the energy industry. If that happens, it would be a big deal for the company.
The future of hydrogen solutions is bright.