Hyundai Motor's Nexo fuel cell electric vehicle / Courtesy of Hyundai Motor



Automaker plans to introduce FCEVs under Genesis brand



By Nam Hyun-woo



Hyundai Motor is betting high on the hydrogen fuel cell electric vehicle (FCEV) as its next-generation, eco-friendly car, despite its huge development and research costs, according to the head of the firm's eco-tech research division.



Korea's largest automaker's first FCEV, the Nexo, which has been on sale since March, has been attracting keen attention from industry analysts and motorists for its "superior" powertrain, compared to those of conventional electric vehicles (EVs).



"Millions of won in losses are incurred when we manufacture one Nexo, due to its huge overhead expenses and development costs compared to its small production volume," said Hyundai Motor Senior Vice President Lee Ki-sang who is heading Hyundai Motor's Eco-Technology Development Center. "Our financial division even calls it a money pit."



Despite being costly, Hyundai Motor is pinning big hopes on the Nexo, according to Lee who is better known as "the father of the Nexo," because the company has a strong belief that FCEVs will be one of two main pillars of automobile powertrains in the near future and eventually be the means of "optimal mobility" not long after that.



"To be honest, we were hesitating in developing the Nexo, because of its high consumer price and huge costs," Lee said during an interview with The Korea Times on Aug. 14. "But top management said 'why are you worrying about the cost?' and 'think of the Nexo as the least we can do for the public who have brought us to our current status' and now there is the Nexo."



Though styled in a fancy cause, Hyundai's description of FCEV as "gratitude to the future generation" is based on its recognition that the FCEV powertrain will be the most efficient way of moving an eco-friendly car in the currently available technological base.



Carmakers categorize eco-friendly cars into four segments _ hybrid, plug-in hybrid, EV and FCEV. While hybrid and plug-in hybrid vehicles are mainly powered by gasoline engines and supported by electric motors, EV and FCEV are powered only by electric motors and are distinguished by where the electricity comes from.



EVs obtain electricity from external sources _ charging stations _ and put them into rechargeable batteries. On the other hand, FCEV generates electricity on its own with fuel cells using oxygen from the air and compressed hydrogen supplied from charging stations.



Since FCEV uses compressed hydrogen, charging times are similar to that of fueling internal-combustion cars, which is a huge advantage compared to EVs, which can take as much as 30 minutes in rapid charging mode or multiple hours for slow charging.



Another advantage of FCEV is its long traveling range. For example, the Nexo can travel 600 kilometers on a single charge, while that of the Hyundai Kona Electric is closer to 400 kilometers. This is largely because of the weight of the battery stack in an EV, with that of the Kona Electric reaching 600 kilograms.



Due to such advantages Hyundai Motor has been making efforts to lead the FCEV market in the infant stage of the technology and released the ix35 FCEV in 2015 and the Nexo in March of this year. Lee said Hyundai Motor is thinking of expanding its FCEV portfolio to its Genesis brand, without providing a detailed timeline.



Despite FCEVs having advantages over EVs, FCEVs are not as popular as EVs because FCEVs are "more technically challenging" then making EVs, and they require costlier key materials including platinum and palladium.



Due to these costs, FCEVs are more expensive than vehicles of a similar size. The Nexo is priced between 68.9 million won ($61,000) to 72.2 million won depending on its trim levels, while the price of the Hyundai Tucson is between 23.51 million won and 31.61 million won. When the central and municipal governments' subsidies for eco-friendly cars are taken into account, the price for the Nexo drops to the 40 million won level.



"This is why we don't expect many sales out of the government's subsidy quota," Lee said. "Would you pay 70 million won for a car when you can purchase one for 40 million won?"



Since the government's subsidies are directly affecting actual purchases, the carmaker builds about 2,000 FCEVs for a year after counting global sales, which will end up creating a loss to Hyundai which must idle the production line capable of manufacturing tens of thousands of vehicles a year and take care of other expenses just to manufacture the Nexo.



Also, the charging networks for FCEVs have not been expanded, while it has become common to see EV charging stations downtown. Currently there are only eight FCEV charging station in Korea.



"This is why I believe FCEV and EV will be the two main powertrains for a while, but ultimately, FCEV will prevail," Lee said. "And this is because I sometimes feel doubt about EVs, especially about its worn-out batteries, even though I'm leading Hyundai's eco-friendly segments including EVs."





Hyundai Motor Senior Vice President Lee Ki-sang introduces the cross section of the Nexo fuel cell electric vehicle during an interview with The Korea Times at the company's headquarters in Seocho-gu, Seoul, Aug. 14. / Courtesy of Hyundai Motor