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Korea's Hydrogen Car Dreams Hit Roadblock as Sales Plummet and Skepticism Grows

1 Jul 2024

Hyundai's Hydrogen ambition takes a halt.

A few years ago, Korea seemed set to lead the charge in hydrogen-powered vehicles. Hyundai Motor Co., the nation's automotive giant, made headlines as the first to mass-produce fuel cell electric vehicles (FCEVs) with its flagship model, the NEXO, quickly dominating the global market. Bolstered by government subsidies and incentives, Korea's hydrogen car ambitions looked unstoppable. However, recent trends tell a different story.

Decline in Hydrogen Vehicle Sales

The global hydrogen vehicle market is experiencing a steep decline. According to SNE Research, FCEV sales dropped by 36.4% in the first quarter of 2024, with only 2,382 units sold worldwide. Hyundai, Korea’s sole producer of hydrogen vehicles, saw a dramatic 66.2% drop in sales, with only 691 units sold, slashing Korea’s global market share from 51.1% to 26.5%. China now leads with 34.6%, and Europe is rapidly closing in at 18.1%.

Hyundai’s FCEV exports hit a low in May, with the total expected to barely reach 100 units for the year. Meanwhile, the number of registered hydrogen vehicles in Korea increased by a modest 15% to 34,258 in 2023, compared to a 39.5% rise in registered electric vehicles (EVs) to 543,900.

Infrastructure and Safety Concerns

Experts attribute the slump to several factors: inadequate refueling infrastructure, high vehicle costs, limited model availability, and safety concerns. "The limited supply of hydrogen gas, especially the shortage of hydrogen charging stations, is the primary problem," said Yang Jae-wan of the Korea Automotive Technology Institute.

Currently, Korea has only 324 hydrogen gas stations compared to 350,204 EV charging stations. The government plans to add 85 more hydrogen stations by 2025, but this may not be enough to revive the market.

Rising Costs and Safety Issues

The cost of hydrogen fuel has risen by 12% since late 2022, averaging 9,864 won per kilogram. The NEXO, Hyundai's primary FCEV model, runs about 96.2 kilometers per kilogram, costing around 102 won per kilometer—nearly double the fuel cost of EVs. Safety concerns also loom large, with several high-profile accidents eroding public confidence. Defective hydrogen gas exceeding carbon monoxide standards and incidents like the 2019 explosion in Gangwon Province and the 2022 leak in Seoul have cast a long shadow over the industry.

Shifting Focus to Commercial Vehicles

Despite these challenges, Hyundai remains committed to hydrogen technology. On June 9, Hyundai announced it took over the hydrogen fuel cell business from its affiliate, Hyundai Mobis. "We will reinforce collaboration among our group companies to secure leadership in the hydrogen ecosystem," stated Hyundai Motor CEO Chang Jae-hoon.

Government Support and Future Prospects

The Korean government's support for hydrogen mobility faces hurdles. While the budget to promote hydrogen passenger cars increased from 130.4 billion won in 2019 to 633.4 billion won in 2023, much of it remains unused. Last year, only 50.9% of the allocated budget was spent, down from 63.5% in 2022. By April 2024, just 21.8% of this year's 571.4 billion won budget had been utilized. Experts suggest redirecting funds to hydrogen commercial vehicles like trucks and buses could be more effective.


Korea's hydrogen car ambitions have hit a roadblock with declining sales, rising costs, and safety concerns. While Hyundai continues to invest in hydrogen technology, the future may see a shift in focus towards commercial applications. The journey towards a hydrogen-powered future is fraught with challenges, but Korea’s commitment to innovation and sustainability keeps the dream alive.

Korea’s ambitious hydrogen journey may have hit a rough patch, but with continued innovation and strategic investments, it remains a key player in the global race towards a sustainable future.

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