Recently, Hyundai Motor Group announced “FCEV Vision 2030” plan to extend its support for the development of a hydrogen society. As part of the plan, Hyundai and Kia would increase their annual production capacity for fuel cell systems from 3,000 units at present to 700,000 units by 2030. The increased production would include 500,000 units for passenger cars and commercial vehicles, while the remaining 200,000 units are planned for other applications. The automaker also plans to supply its fuel cell systems to manufacturers of automobiles, drones, vessels, rolling stocks, and forklifts.
MarketsandMarkets™ View Point:
According to the Point Of View of Srinath Manda – Associate Director : Automotive & Transportation, at MarketsandMarkets™, Hyundai is a leading automotive manufacturer and distributor. The company was incorporated in 1967 and is headquartered in Seoul, South Korea. The company manufactures ICE and electric vehicles such as battery electric, fuel cell, plug-in, and fuel cell. Hyundai ix35, Nexo, Ioniq, and Tucson are fuel cell electric vehicle models. With the production expansion, Hyundai will continue to hold a strong position in the industry in the development of fuel cell systems. Factors such as the rising demand for zero-emission vehicles, stringent emission norms, and government initiatives about fuel cell technology are driving the growth of the automotive fuel cell market. According to MarketsandMarkets™ analysis, the Asia Pacific region is expected to dominate the automotive fuel cell market during the forecast period, followed by North America and Europe. The ecosystem of the automotive fuel cell market consists of manufacturers such as Ballard, Plug Power, Hydrogenics, ITM Power, Nedstack, AFCC, and others.
Impact of Expansion
The expansion of the production capacity by Hyundai will have a positive impact on the fuel cell industry. Developments can be seen with respect to the growing network of fuel cell systems, components, and infrastructure. The expansion can help the South Korean government to achieve its target of deploying 4,000 FCEVs on the road in 2019, almost a fivefold increase. In addition, it aims to establish 310 hydrogen stations in South Korea by 2022. With the expansion of the production capacity, Hyundai can create various job opportunities in the market. Moreover, the company can get multiple contracts to manufacture FCEVs. The company can capitalize on business opportunities for passenger cars, commercial vehicles, and other applications such as drones, vessels, rolling stocks, and forklifts. Post the announcement of the expansion, the company’s shares uplifted with a 6.28% increase in the share price. The share price of Hyundai Mobis, which is a major part supplier for Hyundai Motor Group, also uplifted with a 9.01% increase. In December 2018, the company held a groundbreaking ceremony for its second fuel cell systems plant in Chungju in North Chungcheong province of South Korea. The plant is expected to be operational by the end of next year and increase the production capacity of fuel cell systems to 40,000 units per year by 2022. Through these expansions, Hyundai Motor Group aims to strengthen its position further in the fuel cell market.
Impact of Hyundai’s Expansion on Top Competitors
The production expansion will not only have an impact on the competition but also on the environment. Hyundai will be able to cater more demand worldwide with the expansion of its production capacities. This expansion will give Hyundai an advantage over its competitors such as Toyota, Honda, and others. Moreover, in June 2018, Hyundai collaborated with Audi to make joint efforts for developing fuel cell electric vehicles. In September 2018, Hyundai entered into an agreement with Swiss hydrogen company H2 Energy to provide 1,000 heavy-duty fuel-cell electric trucks to Swiss commercial vehicle market between 2019 and 2023.
With increasing research and development in the field of fuel cell technology, the cost of a fuel cell stack is decreasing continuously, which in turn gives better opportunities for Hyundai to increase the production of fuel cell vehicles. However, the fuel cell infrastructure should be sufficient to support the rising demand for FCEVs. Developments can be mapped with respect to the growing network of hydrogen stations. The South Korean government plans to increase subsidies and tax incentives for FCEVs and has set a goal of 100 hydrogen stations in operation by 2020.