Hyundai Motor Group’s long-term goal of establishing a full-fledged hydrogen value chain, from fuel cell manufacture to hydrogen-powered logistics and mobility services, has taken shape, with Hyundai Mobis Co. at the helm.
Hyundai Mobis said that its board of directors had approved an investment of 1.32 trillion won ($1.11 billion) to build hydrogen fuel cell production facilities in the cities of Incheon and Ulsan. The agreed amount represents the Hyundai Motor Group’s single greatest investment in the hydrogen sector.
Hyundai Mobis’ Incheon facility will produce hydrogen fuel cell stacks including hundreds of fuel cells, which will be converted into fuel cell systems at Hyundai Mobis’ Ulsan plant. These fuel cell systems will be delivered to Hyundai Motor Co. for use in its Nexo fuel cell electric vehicle (FCEV) and XCIENT hydrogen fuel cell trucks.
Hyundai Mobis stated that the new funding will greatly increase its hydrogen fuel cell production capacity, which is now sufficient to produce approximately 6,000 vehicles per year.
Hyundai Motor Group’s strategic strategy is to invest a total of 7.6 trillion won ($6.4 billion) in the hydrogen sector by 2030 in order to ensure an annual manufacturing capacity of 500,000 hydrogen vehicles. Hyundai Motor, the group’s auto unit, has sold a total of 16,767 Nexo vehicles to date and aims to export 1,600 XCIENT trucks by 2025.
Experts point out that the trillion-won investment places Hyundai Mobis in charge of the complete functioning of the group’s hydrogen fuel cell supply chain. In other words, the cost effectiveness, production capacity, and technological capabilities of Hyundai Mobis in manufacturing hydrogen fuel cells will have a direct impact on the cost structure and mileage performance of Hyundai Motor’s hydrogen vehicles.
Hydrogen fuel cell stacks, which create power for the vehicles, account for up to 40% of the cost of manufacturing hydrogen FCEVs.
The Hyundai Motor Group stated that global demand for hydrogen fuel cell systems is expected to rise dramatically as the fuel cells are widely used by ships, drones, railways, and commercial and residential buildings. According to the management consulting firm McKinsey & Co., annual global demand for hydrogen fuel cells would increase to 5.5-6.5 million units by 2030.
“With this investment, we will broaden the group’s hydrogen ecosystem by establishing a more efficient supply network of fuel cell systems,” a Hyundai Motor Group official stated.