Hydrogen fuel cell cars (FCEVs) are facing an uphill battle to compete with battery-electric equivalents, even in formerly buoyant markets such as South Korea, due to the improvements in electric cars and lagging H2 infrastructure in the country, the head of Korea’s main mobility industry association has told Hydrogen Insight.

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Nam-hoon Kang, chairman of the Korea Automobile Mobility Industry Association (KAMA), warned that South Korea’s target to deploy 300,000 FCEVs is still some way off — and acknowledged that sales are falling.

“The first problem is that fuel cell cars are competing with better electric vehicles,” Kang told Hydrogen Insight in an interview on the sidelines of the recent H2 Meet conference in Seoul. “Electric vehicles are getting better, more efficient, economically. So most of the buyers of eco-friendly cars preferred the electric vehicle rather than the fuel cell cars.”

“Secondly, they are very inconvenient to use because electric vehicle charging stations are more [abundant] than the fuel cell charging [filling] stations.”

Sales of passenger FCEVs are declining globally but the fall has been especially acute in Korea, the world’s largest hydrogen car market.

In July, South Korean analysts SNE Research found that sales of passenger FCEVs in Korea had crashed by 38% year-on-year between January and July 2023, a significant fall compared to a global decline of around 9.6%.

Nam-hoon Kang, being interviewed by Rachel Parkes on the sidelines of the H2 Meet conference in Seoul. Photo: AVING NEWS

Seoul's 300,000 FCEV target is envisaged for 2030, with the stipulation that 10% of it should be met by commercial vehicles such as buses and trucks.

However, Kang warned that Korea still has some way to go, achieving just a tenth of the 300,000 so far.

He pointed out that although Korea has successfully incentivised the development and market for hydrogen cars, it has not mirrored the incentives for hydrogen infrastructure such as filling stations, called charging stations in Korea, or a supply of H2 — most of which is currently made from fossil gas and highly polluting.

“At this point the government has realised that developing good fuel cell cars, that’s not enough,” he said. “We have to construct all the infrastructure as well, including charging stations. And if you have all the charging stations, where can you get the hydrogen gas? Right now, it is made from natural gas, fossil fuels, but to really make a contribution to the carbon-free society we have to get this hydrogen from a carbon-free energy source, renewable energy. But it is very expensive.”

South Korea’s FCEV market has been built around massive government subsidies for H2 cars — and to a lesser extent hydrogen filling stations —and the efforts of Korean carmaker Hyundai to promote its hydrogen-only Nexo model.

However, Seoul recently took the decision to cut the budget for hydrogen car subsidies by around 43%, most likely because of poor uptake.

The government now appears reluctant to pour even more money into expensive infrastructure and green hydrogen supply purely to incentivise a market for hydrogen cars.

“To construct all this fuel cell car infrastructure is much more expensive for business,” Kang told Hydrogen Insight. “The government funds are limited. They want to allocate more money for promoting electric vehicles rather than fuel cell cars.”

The KAMA president believes that instead the government wants to focus on the uptake of commercial vehicles, which could bring about the investment in the necessary infrastructure needed for the car market.

“Nowadays, government and business and the Hyundai company want to make an effort to promote more commercial fuel cell vehicles rather than the fuel cell cars,” he said.

He added: “But for Korea the government as well as business has a very strong commitment to the development of fuel cell cars, so we have a very clear target. Right now there are 35,000, so [we need] ten times more. So we have to make a lot of effort.”

Kang’s comments come as reports surfaced that some users of H2 vehicles are ditching their hydrogen cars in frustration at not being able to find or use hydrogen filling stations, many of which are government subsidised.

South Korean consumer website Consumer News reported that some users were waiting up to two hours to fill up, while other drivers noted that charging stations were often broken or closed.

This in turn follows a furious backlash from owners of passenger FCEVs at the decision by Hynet — owned in part by the government and Hyundai — to hike prices by up to a third earlier this year.