Hyundai Plans $6.7 Billion Investment to Boost Fuel-Cell Output

(Bloomberg) -- Hyundai Motor Group and its suppliers plan to spend of 7.6 trillion won ($6.7 billion) through 2030 to raise production of fuel cells by more than 200-fold as the South Korean automaker targets to become a key player in the new-energy vehicle technology.

• The world’s fifth-largest auto group -- with Hyundai Motor Co. and Kia Motors Corp. under its umbrella -- said Tuesday it will boost annual production capacity of fuel-cell systems to 700,000 units from 3,000 now and create 51,000 jobs over the next 12 years.

Key Insights

• The spending proposal reaffirms Hyundai’s faith in the future of a technology that’s been derided as “mind-bogglingly stupid” by Elon Musk, chief executive officer of Tesla Inc., which makes battery-powered cars.
• Fuel-cell technology, which has been championed by Toyota Motor Corp. as an alternative to the conventional internal combustion engines, involves hydrogen-powered vehicles that emit only water vapor.
• Hyundai has South Korea’s backing in its bets. The government plans to roll out 4,000 fuel-cell electric vehicles on the road next year, a fivefold increase, with an aim to establish 310 hydrogen stations in South Korea by 2022.
• The automaker has been wanting to bring its FCEVs to China and exploring options to utilize hydrogen-powered cars for a mobility service, although specific plans have not been announced yet.

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• Hyundai aims to produce 500,000 units for fuel-cell powered passenger and commercial vehicles, while 200,000 units will be produced for other industries such as drones, vessels and rolling stocks.
• Hyundai Motor Group held a groundbreaking ceremony on Tuesday to build its second fuel-cell system factory in Chungju, South Korea, which will increase fuel-cell system output to 40,000 units a year by 2022.
• The carmaker, in collaboration with Aurora, a startup formed by former executives from Google, Tesla, Uber Technologies Inc., is currently testing its fuel-cell sport utility vehicle NEXO, which has a maximum range of 370 miles for autonomous driving.
• “We are confident that hydrogen power will transcend the transportation sector and become a leading global economic success,” Hyundai executive vice chairman Euisun Chung said in a statement.
• The company said in September that it will sell 1,000 fuel-cell electric trucks between 2019 and 2023 in Switzerland and announced a collaboration with Volkswagen AG’s Audi in June.

To contact the reporter on this story: Sohee Kim in Seoul at skim847@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, ;Anand Krishnamoorthy at anandk@bloomberg.net, Sam Nagarajan, Lena Lee

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