Hyundai Motor’s hydrogen fuel cell vehicles have passed the 50,000-unit cumulative domestic sales milestone in South Korea. The achievement comes eight years after the Nexo’s launch in 2018, and is the result of expanding beyond passenger cars into commercial vehicles such as buses and trucks. However, industry observers believe the effectiveness of policy execution—including the imbalance in subsidy matching between the central government and local governments and delays in expanding charging infrastructure—will determine future growth.
According to the automaking industry on the 26th, Hyundai Motor had sold a total of 50,262 hydrogen fuel cell vehicles in South Korea through last month. It marks 28 years since Hyundai began research on hydrogen fuel cell vehicles in 1998, and 13 years since it introduced the Tucson, the world’s first mass-produced hydrogen fuel cell vehicle, in 2013. The company grew the passenger car market with the launch of the Nexo in 2018, and expanded into the commercial segment in 2019 in step with the South Korean government’s policy to convert local government buses to eco-friendly vehicles. In 2020, it diversified its lineup by mass-producing the Xcient hydrogen truck.
Its position in the global market is also solid. According to market research firm SNE Research, Hyundai Motor accounted for about 70% of global hydrogen fuel cell vehicle sales in the first half of this year. As each hydrogen vehicle uses about 20,000 parts, wider adoption is seen as driving growth and employment in the materials, parts and equipment industries. The Nexo’s core parts localization rate exceeds 90%, and Hyundai Motor has built a supply chain with some 60 partners. According to the Korea Hydrogen Alliance, as of 2024 South Korea had about 3,000 hydrogen businesses employing about 37,000 people.
The new Nexo features a 150kW electric motor and 6.69 kg of hydrogen storage capacity. It can travel up to 720 km on a five-minute refill, a substantial increase in per-charge range over the previous model (609 km).
The problem is policy execution to support the pace of adoption. Hydrogen fuel cell vehicle subsidies are structured so that even if the central government secures state funding, support is delayed unless local governments allocate sufficient local funding. In regions with low local funding matching rates, state funding execution rates fall as well, creating a chain effect.
| Category | State-funded units | Units with local funding secured (as of end-September) | Secured rate |
|---|---|---|---|
| Hydrogen passenger cars | 6,000 | 5,093 | 84.9% |
| Hydrogen buses and other commercial vehicles | 1,800 | About 1,270 | 70.6% |
Note: 2026 basis, industry tally
Sluggish execution is leading to budget cuts the following year. The 2027 budget proposal sets hydrogen fuel cell vehicle subsidies at 445.7 billion won (approximately $336.6 million), down about 23% from this year’s 576.2 billion won (approximately $435.1 million). Critics note that reduced deployment capacity could also weigh on investment and supply chain expansion by related companies, including partners.
Charging infrastructure is another drag. According to Hyundai Motor, 86% of Nexo buyers have a hydrogen charging station within an average 7.5 km of their residence, making charging accessibility a key precondition for the user experience. However, South Korea had only about 250 hydrogen charging stations nationwide this year. Construction is falling short of original plans due to difficulties in securing sites combined with challenges in ensuring business viability.
“The 50,000 domestic sales of hydrogen fuel cell vehicles is an achievement in which industry innovation and government policy combined to grow the hydrogen ecosystem,” an industry official said. “To carry this momentum into the next stage of market leap, passenger cars, commercial vehicles and the charging network must all develop in balance.” The official added, “It is most important to create a policy environment in which the allocated budget can be executed without on-site constraints so that the growth of the hydrogen ecosystem can lead to fostering South Korean small but strong companies and creating jobs.”
Because hydrogen vehicles use more parts than battery-centered electric vehicles, wider adoption also helps cushion the electrification transition for existing internal combustion engine parts companies with precision machining, assembly and materials technologies. Analysts say whether the quantitative milestone of 50,000 cumulative units translates into qualitative growth of the actual industrial ecosystem ultimately depends on the consistency of subsidy execution and the pace of charging network expansion.
