Hyundai Motor Group Launches Hydrogen Business in China... Hydrogen Fuel Cell Production Scheduled for Second Half of Next Year

First Overseas Production Base for Hydrogen Fuel Cell Systems in Guangdong Province
Global Annual Supply Target of 700,000 Units by 2030

Hyundai Motor Company’s Nexo hydrogen fuel cell system exported to a European energy solution startup (Photo by Hyundai Motor Company) [Image source=Yonhap News]

[Asia Economy Reporter Kim Ji-hee] Hyundai Motor Group is expanding its hydrogen fuel cell system business in China, following Europe and the United States.

On the 15th, Hyundai Motor Group announced that it signed an investment agreement with the Guangzhou Development Zone government in Guangzhou, Guangdong Province, China, to establish a corporation for the production and sales of hydrogen fuel cell systems. The event was attended by Guangdong Province officials including Lin Keqing, Vice Governor of the Guangdong Provincial Department of Commerce, and Zhang Jin-song, Director of the Guangdong Provincial Department of Commerce, as well as Hyundai Motor Group’s China Business Head Lee Kwang-guk and Executive Vice President Lee Hyuk-jun of Hyundai Motor Group China Limited (HMGC).

A Hyundai Motor Group official explained, "This investment agreement is significant as Hyundai Motor Group is establishing its first overseas production base for hydrogen fuel cell systems in China, which is promoting a ‘hydrogen rise,’ thereby solidifying its position as a leading company in the hydrogen sector."

"Supplying 700,000 Hydrogen Fuel Cell Systems Worldwide Annually by 2030"

With the establishment of the production base in China, Hyundai Motor Group plans to supply approximately 700,000 hydrogen fuel cell systems annually worldwide by 2030. Previously, Hyundai Motor Group began its fuel cell technology partnership with Audi in 2018 and signed a joint development agreement for eco-friendly powertrains with Cummins in the United States in 2019. Last year, it also started exporting to European hydrogen storage technology companies and energy solution startups.

The newly established corporation will be 100% owned by Hyundai Motor Group. In December 2019, Hyundai Motor Group signed an MOU with the Guangdong provincial government regarding the establishment of the corporation. Since then, it has conducted preliminary market research for entering the Chinese hydrogen fuel cell system market and site selection for production facilities, and has been negotiating detailed plans with Guangdong Province and Guangzhou City until recently.

Hyundai Motor Group’s China base is scheduled to begin construction at the end of next month and plans to produce 6,500 units annually starting from the second half of 2022. The main production will focus on hydrogen fuel cell systems installed in the hydrogen electric vehicle Nexo, and supply capacity will be expanded in accordance with the policies of the Chinese central government and market conditions in the future.

China’s Hydrogen Rise... Expected Synergy from Utilizing Guangdong Province’s Infrastructure

Hyundai Motor Group plans to secure a leading position in the Chinese hydrogen market by leveraging its mass production technology for hydrogen fuel cell systems, including eco-friendly vehicles, hydrogen electric vehicles, and hydrogen commercial vehicles. The Chinese hydrogen market is accelerating its growth, as evidenced by the China Automotive Engineering Society, an advisory body to the Ministry of Industry and Information Technology, releasing the ‘Energy Saving and New Energy Vehicle Technology Roadmap 2.0’ last October. This roadmap includes a goal to cumulatively deploy one million hydrogen electric vehicles, mainly commercial vehicles, by around 2035.

The Chinese government is actively attracting foreign companies to promote the development of hydrogen electric vehicle technology and market cultivation. Accordingly, Toyota built a hydrogen refueling station in Jiangsu Province in 2017 and last June formed a research and development joint venture in Beijing with China Yihuatong Hydrogen Fuel Cell System Group, Di Yi Automobile Group, Guangzhou Automobile Group, Beijing Automotive Group, and Dongfeng Motor Group. Global companies such as Canada’s Ballard Power Systems, Germany’s Bosch and SFC Energy, and the UK’s Ceres Power are also rapidly entering the Chinese hydrogen fuel cell system business.

Guangdong Province, where Hyundai Motor Group’s first overseas hydrogen fuel cell system production base will be established, is the top economic center in China by gross domestic product (GDP). In addition, last November, Guangdong Province announced the ‘Guangdong Province Hydrogen Fuel Cell Vehicle Industry Development Implementation Promotion Plan,’ continuing policy efforts at the local government level to foster the hydrogen industry. The plan also sets a goal to strengthen hydrogen industry competitiveness by utilizing industrial complexes, research and development facilities, and related value chain industrial infrastructure within Guangdong Province.

Hyundai Motor Group expects to secure a stable sales base from the early stages of the local corporation’s establishment by directly participating in various hydrogen industry promotion pilot projects led by Guangdong Province through mutual cooperation with major Chinese companies.

Furthermore, Hyundai Motor Group is preparing mass production capabilities in anticipation of the hydrogen fuel cell system expansion project transitioning from a government-led pilot project to a self-competitive system. It plans to maintain market dominance in China by leveraging strategic partnerships with upstream and downstream companies related to the hydrogen industry within China.

This content was produced with the assistance of AI translation services.