Hyundai Motor Company’s hydrogen fuel-cell vehicle, the Hyundai Nexo, surpasses 50,000 sales in South Korea; subsidies and charging network are key

Hyundai Motor Company’s cumulative domestic sales of hydrogen fuel-cell vehicles have topped 50,000. The industry says vehicle adoption is driving growth among materials, parts and equipment companies, but notes that sustaining this growth will require more effective policy implementation, including matching national and local funding and expanding charging infrastructure.

According to the automaker industry on the 26th, Hyundai Motor Company had sold a total of 50,262 hydrogen fuel-cell vehicles in South Korea through last month. This follows the expansion of the passenger-car market since the Nexo launched in 2018 and the broadening of supply to commercial vehicles such as hydrogen buses and trucks. Market research firm SNE Research found that Hyundai Motor Company accounted for about 70% of global hydrogen fuel-cell vehicle sales in the first half of this year.

The adoption of hydrogen vehicles is also affecting the parts supply chain. At least 90% of the Nexo’s key components are localized, and Hyundai Motor Company has built a supply chain with about 60 partner companies. According to the Korea Hydrogen Alliance, South Korea had about 3,000 hydrogen businesses and approximately 37,000 employees in the sector in 2024.

A key challenge to expanding adoption is matching subsidies between the central government and local governments. Even when the central government secures national funding, support can be delayed if local governments do not allocate enough funding of their own. Of the 6,000 hydrogen passenger cars eligible for national subsidies this year, local funding had been secured for 5,093, or 84.9%, by the end of September. For commercial vehicles such as hydrogen buses, local funding had been secured for only about 1,270 of the 1,800 vehicles, leaving the rate at 70.6%.

The industry is concerned that poor implementation due to a shortfall in local funding could lead to budget cuts the following year. Subsidies for hydrogen fuel-cell vehicles in the 2027 budget proposal total 445.7 billion won, about 23% less than this year’s 576.2 billion won. There are concerns that a reduced capacity to expand vehicle adoption could also affect investment by related companies and the growth of the supply chain.

Expanding the charging network is another challenge. If the construction of stations is delayed by difficulties securing sites and ensuring commercial viability, it will be hard to support demand for vehicle purchases and use. The industry believes that adoption of buses and trucks, which consume large amounts of hydrogen, should be expanded alongside passenger cars, as should charging infrastructure.

An industry official said, “Sales of 50,000 hydrogen fuel-cell vehicles in South Korea are an achievement made possible by the combination of innovation in the industry and government policy, which has helped grow the hydrogen ecosystem,” adding, “All three—passenger cars, commercial vehicles and the charging network—need to develop in balance.” The official added, “It is important to create an effective policy environment so that growth in the hydrogen ecosystem can lead to the development of domestic small and medium-sized companies with strong capabilities and to job creation.”

This article has been translated by GripLabs Mingo AI.