Hyundai Mobis Co., the auto parts unit of Hyundai Motor Group, on Thursday broke ground on a hydrogen fuel cell plant, part of its 1.32 trillion won ($1.1 billion) project aimed at embracing the fast-growing hydrogen economy.
The construction of the plant that manufactures hydrogen fuel cell stacks at an industrial complex in Incheon, west of Seoul, will be completed in the second half of next year.
The company is building another plant that assembles fuel cell stacks made at the Incheon factory into systems to be installed on fuel cell electric vehicles (FCEVs) in Ulsan, where Hyundai Motor Co.'s main plant is located.
In mid-August, Hyundai Mobis’ board of directors approved the company’s plan to spend 1.32 trillion won to build the two fuel cell factories with an aim to begin mass production from the second half of 2023.
The investment marks Hyundai Motor Group’s single largest spending on a hydrogen project.
“The large-scale investment shows Hyundai’s determination to lead the global fuel cell market. We will continue to make efforts to contribute to the hydrogen industry and expand the hydrogen ecosystem in the country,” said Hyundai Mobis Chief Executive Cho Sung-hwan at the Incheon plant’s groundbreaking ceremony.
Once completed, the two plants will have a combined annual production capacity of 100,000 fuel cell systems.
The company currently operates a fuel cell production facility in Chungju, North Chungcheong Province, and the three plants will have a combined annual capacity of 123,000 systems, it said.
Hyundai Mobis will build a fuel cell stack plant in Incheon by 2022. HYUNDAI GROUP’S HYDROGEN VISION
Hyundai Mobis is at the core of the automotive group’s long-term goal to transform into a provider of a full-fledged hydrogen value chain, from fuel cell production to hydrogen-powered logistics and mobility services.
In September, the group set out its vision for a hydrogen society, in which the clean energy source is harnessed not just for transportation but for wider sectors across industries.
Under its long-term hydrogen strategy, the group said it will provide fuel cell versions for all its commercial vehicles by 2028, making it the first global automaker to realize such ambitions for the commercial vehicle lineup.
Hyundai currently uses fuel cell systems largely for its hydrogen-powered SUV, the NEXO, and its heavy-duty truck, the XCIENT.
Hyundai's next-generation fuel cell system The group said in September it will introduce its third-generation fuel cell system by 2023 with its production cost cut by half, the package volume reduced by 30% and power output doubled, to widen its use to other mobility, including drones and construction vehicles such as excavators and forklifts.
Hydrogen fuel cell stacks account for about 40% of the manufacturing cost of hydrogen FCEVs.
According to management consulting firm McKinsey & Co., the annual global demand for hydrogen fuel cells is forecast to grow to 5.5 million-6.5 million units by 2030.
Write to Hyung-kyu Kim at khk@hankyung.com In-Soo Nam edited this article.
