The future of hydrogen cars, can it stand without subsidies or Hyundai Motor?

At the ‘International Hydrogen&Fuel Cell Expo 2026’ held in Tokyo, Japan, this past March, Hyundai Motor Group demonstrated technology to refuel the All-New Nexo with hydrogen using Robotics Lab’s ‘automatic hydrogen EV charging robot’. Courtesy of Hyundai Motor Group

Hyundai Motor’s cumulative domestic sales of hydrogen cars have surpassed 50,000 units. Yet it remains an open question whether this market can stand on its own as an industry. When government subsidies shrink, sales falter, and stations continue to rely on government support and Hyundai’s funding. Analysts say the future of hydrogen cars depends not on new models or the size of subsidies, but on how cheaply and reliably hydrogen can be supplied.

On the 4th at KINTEX in Goyang, Gyeonggi Province, the ‘World Hydrogen Expo (WHE) 2026’ and the 5th Hydrogen Day ceremony were held. Around the same time, next year’s budget proposal for the Ministry of Climate, Energy and Environment submitted to the National Assembly included lowering the national subsidy per hydrogen passenger car from 22.5 million won to 20 million won. It is the first plan to reduce national subsidies in nine years since 2018. The budget for hydrogen car purchase support was also cut by 22.6%, from 576.2 billion won to 445.7 billion won.

The ministry says this is an adjustment aligned with execution performance. Over the past five years, the actual execution rate of hydrogen car subsidies remained at 2050%. As of the end of September this year, volumes secured with local funds amounted to 84.9% of the national allocation for passenger cars and 70.6% for commercial vehicles. Industry points to insufficient local funding, while the ministry cites weak demand. There are also concerns that shrinking subsidies could increase the purchase burden and further dampen demand.

Hyundai’s cumulative domestic sales of hydrogen cars stood at 50,262 as of the end of September. According to market researcher SNE Research, of 4,643 hydrogen cars sold worldwide in the first half of this year, 3,337 were Hyundai. However, combined sales in the United States and Europe in the first quarter this year were under 100 units. The ‘world’s No. 1’ is effectively propped up by the Korean domestic market.

That domestic market is supported by subsidies. The sticker price of the new Nexo is 76.4483.45 million won, and only with the maximum subsidy does it drop into the 30 million won range. Fuel costs are also a burden. The annual average hydrogen price per station rose 22% from 8,484 won per ㎏ in 2022 to 10,391 won this year. Applying the nationwide average selling price on the 2nd (10,519 won per ㎏), it costs about 9,800 won to drive 100㎞ in a Nexo. That is more than 40% higher than an Ioniq 5 using a public fast charger (about 6,800 won).

At the ‘World Hydrogen Expo (WHE) 2026’ held at KINTEX in Goyang, Gyeonggi Province, on the 4th, Hyundai Motor’s automatic charging robot demonstrated the process of charging a hydrogen-electric cleaning truck. By Park Hong-Du

Stations are even more vulnerable. According to the office of Rep. Kim Wi-sang of the National Assembly’s Climate, Energy, Environment and Labor Committee, of 258 commercially operating stations in the first half, 208 (80.6%) received government support for hydrogen fuel purchases. This shows that many businesses cannot cover fuel costs with hydrogen sales alone. The increase in the number of commercial chargers shrank from 115 in 2024 to 67 last year, and to 65 through September this year. Even so, next year’s budget for building stations will be cut by 36.9%, from 189.7 billion won to 119.7 billion won.

Hyundai is filling the gap. Last month, Hyundai decided to purchase 18.622 billion won worth of convertible bonds from Kohygen, a commercial-vehicle station operator. As of the end of June, Kohygen’s capital impairment ratio was 53.2%.

Interpretations differ. Some argue that in an industry’s early stage, it is inevitable for the government and companies to absorb infrastructure losses. An industry insider said, “The EV charging network also ran at a loss in the beginning. If we pull out now, all the investments so far become sunk costs.” On the other hand, critics say that if, after nearly a decade of support, stations still are not profitable and vehicles are not economical, the business model needs to be revisited.

Overseas automakers have already become cautious about passenger hydrogen cars. General Motors (GM) halted development of its next-generation fuel cell in October last year, and Honda will end production of current fuel cells at the U.S. joint plant it has operated with GM by the end of this year. That said, Honda is independently developing next-generation fuel cells. Toyota is also shifting the center of gravity of its hydrogen business toward commercial vehicles rather than passenger cars.

There is still room for hope. This year’s target for the rollout of hydrogen buses is 1,800 units. With the expansion of low-floor metropolitan buses slated for 2027, low-floor hydrogen buses may also find opportunities. Kia is also pushing to produce a Carnival hydrogen model from 2029. However, simply increasing the number of models and maintaining subsidies will not make the market self-sustaining.

In the end, the keyis the economics and stability of hydrogen supply. It must be demonstrated how cheaply hydrogen can be produced, how reliably volumes can be secured, and how many vehicles must be deployed for stations to break even. Without these conditions, even if Hyundai expands its lineup and invests in stations and electrolysis facilities, it will be hard to escape dependence on government and corporate support. An industry insider said, “Lowering the hydrogen price per ㎏ comes before selling more cars.”