Hyundai Motor Group announced Tuesday that it would invest US$6.7 billion in hydrogen fuel-cell electric vehicle (FCEV) production facilities in a bid to seize the first-mover advantage in the sector.
The group, which encompasses South Korea’s two biggest carmakers, Hyundai Motor and Kia Motors, plans to create production capacity of 500,000 FCEVs annually through 2030, according to a press release by the company. According to the release, there will be global demand for some two million FCEVs within that time frame.
“Hyundai Motor Group, the global pioneer of the commercial production of FCEV, is taking a bold step forward to expedite the realization of a hydrogen society,” Chung Eui-sun, the group’s executive vice-chairman and grandson of Hyundai founder Chung Ju-young, said at a ground-breaking ceremony for its second fuel-stack factory in South Korea yesterday.
“We will expand our role beyond the automotive transportation sector and play a pivotal role in global society’s transition to clean energy by helping make hydrogen an economically viable energy source.”
Hydrogen can reduce comprehensive ownership costs by about 10% for all means of transportation, including rolling stock, vessels and forklifts, according a 2017 study by McKinsey & Company. The study forecast hydrogen being responsible for 18% of final energy demand by 2050.
“We are confident that hydrogen power will transcend the transportation sector and become a leading global economic success,” Chung said, noting that excess fuel cells not used in Hyundai and Kia FCEVs could be sold to other players in other sectors.
In the 1980s and early ’90s, Hyundai, and sister company Kia, were bywords for cheap vehicles and shoddy construction, but both have massively elevated their quality in recent years, becoming global tier-2 brands with major presences in key global markets including North America, Western Europe and China.
However, as nations worldwide upgrade environmental regulations for cars and carmakers, the firms have been criticized for failing to invest in hybrid, electric vehicles and other clean energy research.
They have, however, been leading in FCEVs. Hyundai launched the first mass-production FCEV in 2013, and rolled out an HC SUV early this year. According to the press release, the group is the only company in the world to have established a dedicated plant for commercial production of fuel cell systems.