Transport

Half-price hydrogen cars | Cities across South Korea unveil subsidies that will slash the cost of a new Hyundai Nexo

A total of 6,800 units of the model are set to be subsidised this year, after sales fell by 54% in 2023

A Hyundai Nexo hydrogen fuel-cell car being refuelled at a South Korean filling station.
A Hyundai Nexo hydrogen fuel-cell car being refuelled at a South Korean filling station.Photo: Hyundai
Editor, Hydrogen Insight

Over the past two weeks, cities across South Korea have been unveiling subsidies for hydrogen cars that will effectively halve the cost of a new model for citizens and local businesses.

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The entirety of this funding is set to go to the Korean-made Hyundai Nexo, the only hydrogen car currently on sale in the country.

In January, the central government said it would provide subsidies of 22.5m won ($16,875) per car for up to 6,800 units across the country in 2024 — down from 16,000 last year — with the incentives being distributed by local authorities.

But many cities are topping up that funding with an extra 10-12m won per car, enabling citizens and local businesses to buy a new Hyundai Nexo — on sale from 69.5m won — for almost half price.

Only 4,254 units of the Nexo were sold last year, despite the government offering subsidies of 22.5m won for 16,000 cars in 2023 too, which was also topped up to 32.5m-34.5m won by many cities and provinces. In 2022, 10,067 hydrogen cars were registered in 2022 — 57% more than last year.

The Korean hydrogen car market has struggled in the face of rising fuel costs, as well as a devastating fuel-supply crisis at the end of last year, which forced three quarters of the country’s filling stations to temporarily close for several weeks, causing severe problems for existing fuel-cell car drivers.
Hydrogen Insight has identified ten cities and two counties across South Korea that have announced hydrogen vehicle subsidies for 2024 over the past two weeks, with some offering further incentives on top of that.
Incheon — the neighbouring city to Seoul that hosts the capital’s main airport — is offering the most subsidies, with 162.7bn won ($121.9m) being made available for FCEVs, namely 780 cars, 505 buses and four trucks.
The city is offering 32.5m won for hydrogen cars, 300m won for low-floor buses, 350, won for high-floor buses (ie, coaches), and 450m won for trucks. It also aims to double the number of H2 refuelling stations, from eight to 16, this year.
The Seoul city government is offering 32.5m won for 102 cars, with added tax-reduction benefits of up to 6.6m won, as well as a 50% discount at city-owned car parks, and exemption from the Namsan Tunnel tolls in the city centre. The city will also subsidise 42 buses.

Announced subsidies for other cities are as follows:

Daejon: 300 cars (32.5m won each)
Gwangyang: 185 cars (32.5m won), two local buses (390m won), and 11 coaches (370m won)
Paju: 120 cars (32.5m won) and 10 coaches
Donghae: 70 cars (34.5m won)
Gangneung: also 70 cars at 34.5m won each
Gwangju: 50 cars (32.5m won)
Ansan: 30 cars (32.5m won)
Gwacheon: 14 cars (32.5m won)
The rural counties of Seongju and Buan have also announced subsidies for hydrogen cars, with the latter offering cash for 104 vehicles (although the exact sum has not yet been revealed), and the former providing 32.5m won for only three cars.

In all, this adds up to 1,828 cars, but many other cities and provinces are expected to unveil further subsidies in the coming weeks and months, including of Busan, Daegu, Ulsan, which had similar subsidy levels available for hydrogen cars in 2023.

(Copyright)
SubsidiesCarsHyundaiSouth Koreafuel-cell vehicles
Published 14 February 2024, 14:13Updated 14 February 2024, 14:17