In an industry dominated by ambitions to go all-electric using battery power, Hyundai (HYMTF) is opting to go all-in on hydrogen.
The South Korean company unveiled its ambitions at CES 2024 in Las Vegas with a vow to own the entire hydrogen stack, from production and storage to transportation and utilization. It aims to do that by first using animal waste and plastics to produce clean-burning fuel.
"We are going [toward] zero emission, and renewable energy needs a buffer system because the sun doesn't shine at night," Martin Zeilinger, head of Hyundai's commercial vehicle tech unit, told Yahoo Finance Live. "We sometimes have snow, wind. We have to store the energy we produce, and we believe that hydrogen can play a major role in that."
Hyundai is among a handful of carmakers that have embraced hydrogen, including Toyota (TM) and General Motors (GM). The company first unveiled its hydrogen-powered fuel cell vehicle Nexo at CES in 2018 and now claims the largest market share in the space.
But Zeilinger stressed that the company’s announcement this time goes well beyond vehicles alone.
"We are talking about the hydrogen society," he said. "Cars, trucks, buses, mobility will be one of the off-takers of that hydrogen. The other can be producing steel with low carbon or zero carbon and other opportunities as well."
The global hydrogen fuel cell vehicle market is expected to grow more than 40% over the next decade to $57.9 billion, according to data from Allied Market Research. Hydrogen vehicles utilize fuel cells that convert hydrogen gas into electricity.
While battery electric vehicles require hours to fully charge without a fast charger, fuel cell vehicles can be topped off in minutes, similar to fueling up for a gas-powered vehicle, and carmakers have touted that convenience as a key benefit to the technology.
But hydrogen has been slow to take off, in part because of a lack of infrastructure. There are just 65 existing recharging stations in North America, according to the Department of Energy. High pressures and low temperatures required to store and transport hydrogen also make the fuel more expensive.
Hyundai said hydrogen fuel will now play a “crucial role” in its “sustainability roadmap.” The company plans to ferment organic waste, including food and livestock manure, to produce biogas. It also plans to use plastic waste that cannot be recycled by melting the plastic and stripping away unnecessary elements to produce hydrogen.
The company set out to eliminate 3 million tons of carbon emissions per year by 2035, an aim critical to reaching its goal of becoming carbon neutral by 2050.
In a statement, Hyundai said it will play a role in the Biden administration's hydrogen hub program. Aimed at spurring the hydrogen sector in the US, President Biden authorized over $7 billion to set up seven regional hydrogen hubs, funded through the Bipartisan Infrastructure Law.
The program is intended to bolster green hydrogen producers and catalyze private investment in the highly capital-intensive sector.
“With the growing volume, we will have a scale effect, and the cost will come down with more modern production sites, manufacturing sites, materials and so forth,” Zeilinger said. "Cost will decrease, but in this initial phase governmental subsidies will help a lot."
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Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AkikoFujita.
