Pouring Money in Hydrogen Businesses
As demand for clean energy is expected to soar in the post-COVID-19 era, Korean business groups are investing massively in hydrogen-related businesses.
Hyundai Motor, Hanwha, GS, Doosan and Hyosung Groups are leading corporate investment in hydrogen. The Korean government also plans to foster 500 specialized companies within 10 years to rev up the hydrogen economy.
Hyundai Motor Group is by far the frontrunner in the hydrogen sector. Its hydrogen car development dates back to 20 years ago. It started developing hydrogen cars in 1998 and succeeded in mass-producing the world's first hydrogen car in 2013.
In July, Hyundai Motor Co. decided to build the world's first hydrogen truck mass-production line to export 1,600 units to Switzerland. In particular, the automaker surpassed 10,000 units in cumulative global sales of hydrogen cars in July.
Hyundai Motor Co. plans to boost its hydrogen car production capacity to 500,000 units per year by 2030 by investing a total of 7.6 trillion won. In addition, Hyundai Mobis, which makes hydrogen fuel cells, the core of hydrogen cars, will have an annual production capacity of 40,000 units by 2022, while Hyundai Steel will expand its hydrogen production capacity 10-fold from now. Hyundai Rotem will begin to produce hydrogen trams and invest in building a hydrogen charging station network.
Hanwha is also increasing its corporate value by expanding its hydrogen business. Hanwha invested US$100 million in Nikola, a U.S. producer of hydrogen trucks, triggering hydrogen-related stocks in the local stock market. Nikola's share price was cut to one third due to a fraud controversy, but still holds a market capitalization of 10 trillion won, so the value of Hanwha's stake exceeds 600 billion won.
In addition, Hanwha Energy has decided to supply electric power to 160,000 households after completing the construction of the world’s largest fuel cell power plant that uses by-product hydrogen with an investment of 255 billion won in Seosan, South Chungcheong Province, in July.
GS Caltex has joined the government's efforts to expand hydrogen charging stations. Hyundai Oilbank has decided to enter the hydrogen charging station business and build about 80 units within five years.
Doosan Fuel Cell which has become the first ranker in the power generation fuel cell market reached a market capitalization of 2.7 trillion won in just one year since its listing in 2019. Doosan is also planning to carry out hydrogen drone business through Doosan Mobility Innovation (DMI).
Hyosung has joined hands with global chemical giant Linde to invest 300 billion won to build the world's largest liquefied hydrogen plant in Ulsan, Korea, by 2022. Liquefied hydrogen is applied to various mobility areas, including drones, ships, and forklifts. The three major Korean shipbuilding companies -- Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding and Marine Engineering (DSME) -- also considering developing liquefied hydrogen-powered vessels as a future growth engine.
The Korean government will allocate some of its budget to the diffusion of 850,000 hydrogen cars and build 660 hydrogen charging stations by 2030, paving the way for companies to expand their hydrogen business.