Hyundai Motor Co. on Wednesday unveiled its vision for fuel cell electric vehicles (FCEV), vowing to invest a total of 7.6 trillion won (6.7 billion U.S. dollars) in FCEVs to produce 500,000 hydrogen cars per year and create 51,000 new jobs. The plan is Hyundai’s commitment to break through the domestic auto industry’s escalating crisis by investing in new technologies.
At a time when Korea has no solid future growth engine other than semiconductors, Hyundai’s latest announcement is welcome news. As hydrogen vehicles have similar design structures to internal combustion cars, automakers can make use of the existing parts ecosystem. This is why Hyundai Motor Group can attempt to develop hydrogen car technologies jointly with its suppliers by providing them with 44 billion won (39 million dollars) in funds. If the investment is made as planned, it is expected to produce some 25 trillion won (22.1 billion dollars) worth of economic effects and create some 220,000 jobs both directly and indirectly. If a parts ecosystem is created for FECVs, which require some 24,000 components a unit, the local auto industry can have an opportunity for a new leap forward.
Although Hyundai developed the world’s first commercial hydrogen vehicle in 2013, it still has a long way to go to become the top automaker. As many countries around the world have been stepping up efforts to shift to eco-friendly vehicles since the 2013 diesel emissions scandal, Chinese and Japanese carmakers have become competitors. Hydrogen vehicles can run 100 kilometers more than electric vehicles on a single charge and clean up fine particles. Therefore, the Chinese government plans to supply one million units by 2030 and set up 1,000 charging stations by 2030. Japan, which announced a “Hydrogen Society” roadmap in 2014, has also presented a plan to supply 40,000 hydrogen cars by 2020, when the Tokyo Olympic Games will be held. Backed by government subsidies, Toyota Motor Corp. has already sold 5,000 units. Despite possessing leading technologies, Hyundai has sold just 1,700 hydrogen cars because there are just nine charging stations across Korea.
The expansion of the global hydrogen car market is a great opportunity. Fortunately, the Korean government has also announced the “Hydrogen Economy” roadmap, vowing to set up 310 charging stations by 2022. At this opportunity, we expect the government and businesses to make an example of cooperating to develop a new economic growth engine.