Will new Nexo revive shrinking hydrogen mobility push?
Hyundai Motor is set to launch the fully revamped Nexo as early as this month in Korea, seven years after introducing its sole fuel-cell-powered sport utility vehicle currently on the market.
With improved performance and fuel efficiency over its predecessor, the new Nexo is positioned to lead Hyundai's initiative to drive the global transition to hydrogen mobility — a vision first outlined in 1998 by Chung Mong-koo, honorary chair and father of current Chair Chung Euisun.
'Nexo represents the essence of sustainable mobility proposed by Hyundai Motor,' said Chung Yoo-seok, executive vice president of Hyundai Motor, during the vehicle's unveiling at the Seoul Mobility Show in April.
'We will accelerate the expansion of the global hydrogen ecosystem beyond Korea's borders and aim to achieve our annual sales target of 11,000 units.'
However, recent market conditions cast uncertainty over the ambitions of the world's leading hydrogen vehicle maker.
Declining demand for fuel cells
In recent years, Korea's fuel-cell electric vehicle market has declined.
According to SNE Research, sales dropped from 10,336 vehicles in 2022 to 3,688 in 2024, marking a 65 percent decrease.
This downturn reflects deeper structural challenges for FCEVs, rather than a temporary pause, as the transition to eco-friendly mobility is increasingly driven by battery electric vehicles, experts said.
'Many consumers are still hesitant even about EVs, which are far more familiar,' said an industry source who requested anonymity. 'So it's no surprise that skepticism runs even deeper when it comes to hydrogen.'
Limited charging access and high hydrogen fuel prices also remain major hurdles for fuel cell mobility.
Korea has around 221 hydrogen stations — more than Japan, the US or Germany — but drivers still face inconvenience when refueling.
'Due to amplified safety concerns, strict regulations have resulted in limited station hours and the placement of stations far from residential areas, even though such risks can be mitigated through multiple layers of safety measures,' said Lee Ho-geun, professor of automotive engineering at Daeduk University.
Amid these ongoing challenges, the launch of the new model is expected to have a limited impact on the market. Hyundai sold around 750 FCEVs domestically in the first quarter of 2025, and projections suggest that total annual sales may remain close to last year's levels despite the new launch.
The global market also shows limited reason for optimism, with only Hyundai and Toyota currently active in the passenger hydrogen vehicle segment.
Worldwide sales of FCEVs dropped from 20,704 sales in 2022 to 12,866 in 2024.
The decline appears sharper in the passenger segment because China, which has grown to account for 55 percent of global FCEV sales, remains focused mainly on commercial rather than private vehicles.
'Globally, the eco-friendly vehicle market is still largely driven by government policies, such as subsidies, since automakers have yet to achieve the cost and performance competitiveness needed to rival internal combustion engine models,' said Lee.
'Because many countries want to protect their local industries and lack proprietary hydrogen vehicle technology, they are not actively pursuing policies to adopt these vehicles.'
Staunch commitment, but long road ahead
Despite the discouraging outlook for hydrogen, Hyundai Motor Group has strengthened its momentum in hydrogen mobility efforts since last year, aiming to retain its leading position in the hydrogen mobility era expected to follow EVs.
In 2024, it integrated the fuel cell business of its parts-making unit, Hyundai Mobis, into Hyundai Motor Co. to boost synergy between hydrogen technology and vehicle manufacturing. Separately, the group established an overseeing team to complete the hydrogen business value chain, moving beyond a sole focus on fuel cell production.
The group also forged partnerships with rivals Toyota and General Motors to collaborate on hydrogen strategies.
'We will work with global partners and harness our full capabilities across the hydrogen value chain to accelerate the adoption of a hydrogen-powered society,' emphasized the group's Vice Chair Chang Jae-hoon at the World Hydrogen Summit 2025 in Rotterdam, Netherlands, in May.
Lee also echoed Hyundai's expansion of cooperation with other companies, saying, 'Hyundai needs to expand the overall market by licensing some basic technologies to other automakers at minimal royalty fees.'
However, Kim Pil-su, a car engineering professor at Daelim University, said yearslong efforts are still needed before fuel cell vehicles can become a profitable business.
'The hydrogen mobility sector still faces numerous challenges, including high costs and issues related to hydrogen generation, delivery and storage,' he said, noting that automakers in the US and Europe have abandoned plans to launch fuel-cell passenger cars.
'For hydrogen to be truly eco-friendly (to be widely accepted by countries), it must move beyond heavy reliance on fossil fuels for production. However, mass production through water electrolysis is expected to take over a decade.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Korea Herald
2 days ago
- Korea Herald
Hyundai, GM to build pickups, EVs in new sweeping alliance
Automakers to develop 5 models across Americas, with production starting in 2028 Hyundai Motor Company and General Motors are joining forces in one of the biggest global automotive tie-ups to date. The two companies aim to co-develop five new vehicles — including hybrids, gas-powered models and electric vans — to expand their presence across the entire American market and better navigate US tariff pressures. Hyundai Motor said Thursday it will jointly develop five vehicles with GM. Four, including pickups, a compact car and a small SUV with internal combustion and hybrid options, will be for Central and South America, and one electric commercial van for North America. Production is set to begin in 2028 with an annual capacity of over 800,000 units. Hyundai will lead development of the compact models and electric van, while GM will take charge of the midsize pickup platform. This joint venture, which was first announced in September last year, marks a significant milestone in the strategic partnership between Hyundai, the world's No. 3 automaker by sales, and GM, ranked No. 5. 'Through our strategic partnership with GM … we can provide customers with exceptional design, superior quality, a strong commitment to safety and cutting-edge technology more efficiently than ever before,' said Hyundai Motor Company CEO Jose Munoz. According to a Hyundai Motor Company spokesperson, 'the two companies will work together to jointly create new vehicle platforms.' 'However, specific details regarding the production facilities and the models to be manufactured have yet to be finalized.' Although Hyundai and GM will share common vehicle platforms, 'each company will sell these vehicles under their own brands with unique interior and exterior designs,' stated Shilpan Amin, chief procurement and supply chain officer of General Motors, in a separate press release. A source familiar with the matter, speaking on condition of anonymity, noted, 'While the two companies will each retain the sales revenue from the jointly developed vehicles independently, they will jointly bear the costs and responsibilities of technology development.' Industry watchers indicate that Hyundai and GM are expected to maximize each other's strengths and offset weaknesses to create a win-win partnership. 'On Hyundai's part, it could capitalize on GM's expertise in pickup trucks and car parts sourcing in the US, and GM could benefit from Hyundai's advanced electric, hybrid and compact vehicle technologies,' said Lee Ho-geun, an automotive engineering professor at Daeduk University. Kim Pil-su, a car engineering professor at Daelim University, noted, 'It may look like Hyundai could be giving more than what GM has to offer, considering that the Korean carmaker is poised to target the Latin American pickup market, which is smaller than the US market dominated by GM.' The US is the world's largest pickup truck market. As of last year, it was valued at $77.6 billion and is projected to grow at a compound annual growth rate of 2.3 percent from 2025 to 2034, according to a report by Global Market Insights. Kim explained that by manufacturing jointly developed pickup trucks in GM's automotive plants outside the US, the US auto giant can mitigate the impact of reduced operating rates due to US tariffs. GM currently operates four car manufacturing and assembly plants in Mexico and Canada. 'Hyundai Motor, however, can partly ease US tariff pressures, utilizing GM's well-established auto parts supply chain in the US. This could lower costs in vetting and securing local parts suppliers,' Kim said. Due to 15 percent tariffs on Korean-made cars, the Korean auto manufacturer has been accelerating its plan to expand car parts sourcing in the region. Combining Hyundai's hybrid technology with GM's pickup platform can also strengthen both companies' footing in the global market. The global hybrid pickup market is projected to grow from an estimated $11.5 billion in 2024 to about $25.3 billion by 2033, according to Verified Market Reports.
Korea Herald
3 days ago
- Korea Herald
Hyundai, GM to co-build pickups, EVs in sweeping new alliance
Automakers to develop 5 models across Americas, with production starting in 2028 Hyundai Motor Group and General Motors are joining forces in one of the biggest global automotive tie-ups to date. The two companies aim to co-develop five new vehicles — including hybrids, gas-powered models and electric vans — to expand their presence across the entire American market and better navigate US tariff pressures. Hyundai Motor said Thursday it will jointly develop five vehicles with GM. Four, including pickups, a compact car and a small SUV with internal combustion and hybrid options, will be for Central and South America, and one electric commercial van for North America. Production is set to begin in 2028 with an annual capacity of over 800,000 units. Hyundai will lead development of the compact models and electric van, while GM will take charge of the midsize pickup platform. This joint venture, which was first announced in September last year, marks a significant milestone in the strategic partnership between Hyundai, the world's No. 3 automaker by sales, and GM, ranked No. 5. 'Through our strategic partnership with GM … we can provide customers with exceptional design, superior quality, a strong commitment to safety and cutting-edge technology more efficiently than ever before,' said Hyundai Motor Company CEO Jose Munoz. According to a Hyundai Motor Group spokesperson, 'the two companies will work together by exchanging development personnel to jointly create a new vehicle platform.' 'However, specific details regarding the production facilities and the models to be manufactured have yet to be finalized.' Although Hyundai and GM will share common vehicle platforms, 'each company will sell these vehicles under their own brands with unique interior and exterior designs,' stated Shilpan Amin, chief procurement and supply chain officer of General Motors, in a separate press release. A source familiar with the matter, speaking on condition of anonymity, noted, 'While the two companies will each retain the sales revenue from the jointly developed vehicles independently, they will jointly bear the costs and responsibilities of technology development.' Industry watchers indicate that Hyundai and GM are expected to maximize each other's strengths and offset weaknesses to create a win-win partnership. 'On Hyundai's part, it could capitalize on GM's expertise in pickup trucks and car parts sourcing in the US, and GM could benefit from Hyundai's advanced electric, hybrid and compact vehicle technologies,' said Lee Ho-geun, an automotive engineering professor at Daeduk University. Kim Pil-su, a car engineering professor at Daelim University, noted, 'It may look like Hyundai could be giving more than what GM has to offer, considering that the Korean carmaker is poised to target the Latin American pickup market, which is smaller than the US market dominated by GM.' The US is the world's largest pickup truck market. As of last year, it was valued at $77.6 billion and is projected to grow at a compound annual growth rate of 2.3 percent from 2025 to 2034, according to a report by Global Market Insights. Kim explained that by manufacturing jointly developed pickup trucks in GM's automotive plants outside the US, the US auto giant can mitigate the impact of reduced operating rates due to US tariffs. GM currently operates four car manufacturing and assembly plants in Mexico and Canada. 'Hyundai Motor, however, can partly ease US tariff pressures, utilizing GM's well-established auto parts supply chain in the US. This could lower costs in vetting and securing local parts suppliers,' Kim said. Due to 15 percent tariffs on Korean-made cars, the Korean auto manufacturer has been accelerating its plan to expand car parts sourcing in the region. Combining Hyundai's hybrid technology with GM's pickup platform can also strengthen both companies' footing in the global market. The global hybrid pickup market is projected to grow from an estimated $11.5 billion in 2024 to about $25.3 billion by 2033, according to Verified Market Reports.
Korea Herald
3 days ago
- Korea Herald
BOK chief: US tariff deal eases rate pressure
Bank of Korea Governor Rhee Chang-yong said Thursday that the recent Korea-US tariff agreement has eased pressure on the central bank's policy outlook ahead of its next rate-setting meeting later this month. 'If the tariff talks had gone poorly, we would have faced a difficult situation going into the next monetary policy meeting,' Rhee told reporters after a closed-door meeting with Deputy Prime Minister and Finance Minister Koo Yun-cheol. 'The outcome is meaningful for Korea during a challenging time.' The agreement, struck last week with Koo as one of the lead negotiators, reduced a threatened 25 percent US tariff on Korean exports to a 15 percent blanket rate. In return, Seoul committed to $350 billion in US investments and $100 billion in energy purchases. The BOK has delivered two rate cuts this year in February and May, each by 25 basis points, as it shifts its focus toward supporting growth amid weakening domestic demand and external uncertainty. The current benchmark rate stands at 2.5 percent, down from 3.0 percent at the beginning of the year. Some analysts say the bilateral trade deal makes a rate hold more likely at the Aug. 28 meeting, as it helped Korea avoid a deeper slowdown. Stronger chip exports, government stimulus cash handouts and a stock market rebound are also reducing pressure for an immediate rate cut. Rhee's remarks came during Koo's first official visit to the BOK since taking office on July 21, signaling efforts to strengthen policy coordination. Koo called for a 'one-team' approach to guide the economy through structural reform and recovery.
