Hyundai Motor is set to reshape South Korea's eco-friendly bus market by significantly bolstering its hydrogen bus business. The automaker plans to make a substantial investment in Kohygen, a company specializing in hydrogen bus charging stations, to establish over 300 charging stations nationwide.
According to sources cited by The Korea Economic Daily, Hyundai Motor will participate in Kohygen's upcoming capital increase of KRW 20 billion (US$14.47 million) in early August 2024. The automaker is poised to acquire 3.5 million of the 4 million newly issued shares for KRW 17.5 billion, increasing its stake from 9% to 48%. The board of directors is expected to vote on the acquisition on July 25.
Kohygen, founded in 2021, initially received investments totaling KRW 24.1 billion from nine companies, including Korea District Heating Corporation (KDHC), Hyundai Motor, GS Caltex, and SK Energy. KDHC, currently the largest shareholder, holds a 28% stake, with other investors each holding 9%. Post-acquisition, KDHC's stake will decrease to around 10%, while other investors' holdings will drop to approximately 5%.
Currently, Kohygen operates six charging stations across South Korea. However, high investment costs and slow hydrogen bus adoption have resulted in a KRW 3.6 billion loss in 2023. Establishing a single hydrogen charging station costs roughly KRW 3 billion, and Kohygen's medium- to long-term objective of establishing 300 stations requires an estimated KRW 900 billion investment.
Local governments' reluctance to invest in hydrogen buses stems from inadequate charging infrastructure. Industry insiders suggest that Hyundai Motor's leadership in building charging stations could spur ecosystem development and drive profitability for Kohygen and associated enterprises.
As the sole producer of hydrogen buses in South Korea, Hyundai Motor is positioned to dominate the market. Following its acquisition of Hyundai Mobis' hydrogen fuel cell business in 2024, Hyundai will control the full spectrum of technology from battery R&D to vehicle manufacturing, reinforcing its market leadership.
Hyundai Motor has recently expanded its Jeonju plant in Jeollabuk-do, South Korea, with plans to increase annual hydrogen bus production from 500 to 3,100 units. This increase aims to make Hyundai's hydrogen buses price-competitive with Chinese electric buses. Furthermore, in June 2023, Hyundai completed its HTWO fuel cell system plant in Guangdong, China, which boasts an annual production capacity of 6,500 units of 100kW-class fuel cell systems.
This strategic move by Hyundai Motor demonstrates its commitment to advancing hydrogen technology in the transportation sector and its ambition to lead the eco-friendly bus market in South Korea and beyond.
