Hyundai Motor Group will become the first in the world to establish a mass-production system for hydrogen fuel cell systems in Korea, strengthening its global leadership in the hydrogen economy. Together with its suppliers, the group plans to invest 7.6 trillion won in R&D and expanded facilities by 2030, enabling annual production capacity of 500,000 hydrogen fuel cell vehicles and creating 51,000 new jobs.
The initiative is expected to lay the foundation for a new ecosystem in the future automotive industry, revive South Korea’s stagnant auto industry and become a new national growth engine.
Last year, Hyundai Motor Group announced “FCEV Vision 2030,” its mid- to long-term roadmap for hydrogen and fuel cell electric vehicles (FCEVs), at a Hyundai Mobis plant in Chungju, North Chungcheong Province. It also held a groundbreaking ceremony for a second hydrogen fuel cell system plant. A hydrogen fuel cell system combines hydrogen with oxygen in the air to generate electricity and is a key component that serves as the engine of a hydrogen vehicle.
In addition to conventional gasoline, diesel, natural gas and electric vehicles, hydrogen vehicles are now entering the market, raising questions among consumers. Which type of car will dominate highways as the vehicle of the future 10 or 20 years from now?
Most consumers are still accustomed to internal combustion vehicles powered by gasoline or diesel, so many aspects of hydrogen fuel cell vehicles remain unfamiliar: how they work, where their hydrogen comes from and how they differ from electric vehicles. Consumers also want to know whether they really produce no harmful emissions and when prices might come down.
The commonly used term “hydrogen car” refers more precisely to a fuel cell electric vehicle (FCEV). It is often shortened to “hydrogen electric vehicle.” As the word “electric” in its English name suggests, an FCEV is a type of electric vehicle. Battery electric vehicles (BEVs) draw power from a battery, while hydrogen electric vehicles use electricity generated by a chemical reaction between hydrogen and oxygen to drive a motor. Early development efforts also explored making “hydrogen-fueled cars” that were not electric vehicles.
In a hydrogen-fueled car, hydrogen is burned directly in an engine, and the resulting heat drives the motor. But the problem of low efficiency when converting heat into mechanical energy proved difficult to solve. Development therefore shifted toward equipping cars with fuel cells, which generate electricity from hydrogen and oxygen.
The key component of a hydrogen electric vehicle is the fuel cell stack. It consists of multiple fuel cells combined to generate enough electricity to power a car. The stack, hydrogen supply system, air supply system and thermal management system are integrated into a fuel cell system that functions like a compact power generator.
The way a hydrogen electric vehicle works is not as complicated as it may seem. First, it takes in air, which passes through an air filter that removes impurities. As a result, hydrogen electric vehicles are said to also act like air purifiers. The hydrogen from the tank then meets oxygen in the fuel cell and undergoes a chemical reaction. Platinum catalysts separate hydrogen (H2) and oxygen (O2) into ions, and the movement of the separated electrons generates electricity. The electricity powers the motor, while water is released outside the vehicle.
For now, electric vehicles have a clear advantage over hydrogen vehicles in fuel cost per kilometer. A report titled “The Present and Future of the Hydrogen Vehicle Industry,” by analysts Lee Hyun-jun and Kim Young-jun of KTB Investment & Securities, puts the Hyundai Nexo’s fuel cost at 73 won per kilometer. By comparison, the Tesla Model 3 costs 25 won per kilometer to power. Both are cheaper than internal combustion vehicles, which cost 107 won per kilometer for gasoline and 93 won for diesel, assuming fuel economy of 15 kilometers per liter, gasoline at 1,600 won per liter and diesel at 1,400 won per liter.
Hydrogen electric vehicles, however, have an advantage in driving range and refueling time. Refueling the Hyundai Nexo’s 6.33-kilogram hydrogen tank takes three to five minutes and gives it a range of 609 kilometers. A Tesla Model 3 can travel 350 kilometers after a 20-minute fast charge of its 50-kWh battery. After South Korean government and local subsidies, the Hyundai Nexo is priced at 33 million to 39 million won, while the Tesla Model 3 is expected to cost in the 20-million-won range.
In short, price is the biggest drawback of hydrogen vehicles, while range and other performance factors are key challenges for electric vehicles.
Electric vehicle range is said to drop by 20% to 30% when heating or air conditioning is used. And as autonomous driving systems become commercially available, electricity consumption is likely to increase, giving hydrogen vehicles an advantage over electric vehicles. However, battery technology and prices continue to improve, extending electric vehicle range. Electric vehicles are already in mass production and benefiting from economies of scale.
For hydrogen electric vehicles to become more widespread, they need to be price-competitive with electric vehicles.
A key factor is how quickly the price of fuel cell stacks falls, since they account for the largest share—about 40%—of hydrogen vehicle production costs. Market research firm Strategic Analysis estimated that in 2017, fuel cell stacks cost $180 per kilowatt when 1,000 units were sold. Hyundai’s Nexo has a 95-kW fuel cell, putting the total cost at $17,100, or about 19 million won. If annual stack production rises to 500,000 units, the price is projected to fall to $45 per kilowatt even without further technological advances.
In other words, prices will fall if manufacturers make and sell more vehicles, making it essential to accelerate the establishment of mass-production systems. Hyundai said it aims to build capacity to mass-produce 100,000 hydrogen vehicles a year by 2025, bringing prices down by half so consumers can buy one for around 30 million won. In theory, this scenario is not out of reach.
But lower hydrogen fuel costs and a stable supply chain are also essential. One challenge is the energy lost in the two conversion steps: using electricity to produce hydrogen, then using that hydrogen to generate electricity to power a motor.
Tesla CEO Elon Musk has criticized the energy losses, saying, “Fuel cell vehicles are incredibly dumb.” What’s more, according to South Korea’s Ministry of Trade, Industry and Energy, much of the byproduct hydrogen produced in Korea—1.64 million tons in 2016, generated during petrochemical processes—is reused as feedstock by refining and petrochemical companies. Only about 50,000 tons, enough to power 250,000 vehicles for a year, is available for hydrogen vehicles, so supply is not yet abundant.
Initially, the plan is to increase the use of byproduct and reformed hydrogen. As renewable energy capacity grows, surplus electricity could be used to produce hydrogen through water electrolysis, or large volumes of hydrogen could be imported from overseas production hubs.
As technology advances, environmentally friendly vehicles powered by electricity and hydrogen, as well as self-driving cars, are becoming more sophisticated. At the same time, ride-sharing services such as Uber are spreading as part of the sharing economy.
It is hard to say exactly what highways will look like in the future, but significant changes are certain. Advances in automotive AI and shared cars, for example, may mean people drive less and may not need to own a car at all.
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Attorney Sang Lee
· Registered patent attorney with the U.S. Patent and Trademark Office
· J.D., Loyola University School of Law
· Senior researcher, Landauer
· Researcher, Panasonic
· M.S. in Computer Science, University of Illinois
· B.S. in Computer Science, University of Illinois
Contact:
Email: sang@dream-law.com
Phone: 847-357-1358 ext 301
Fax: 847-357-1359
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