South Korea has been offering generous subsidies to promote eco-friendly transportation, cutting the cost of hydrogen cars by half. However, recent data from the Ministry of Trade, Industry, and Energy reveals a disheartening reality: just two hydrogen cars were sold across the country last month, marking a drastic 99.4% drop from the same period in 2023.
Despite setting ambitious goals of having 300,000 hydrogen vehicles on the roads by 2030, South Korea must catch up with less than 35,000 vehicles in operation today.
Hydrogen Car Sales Decline
While hydrogen car sales plummeted, the demand for battery-electric vehicles surged. January witnessed a significant increase, with 1,597 battery-electric cars and 588 plug-in hybrids sold.
Various challenges have hampered the hydrogen car market, including rising fuel costs and a recent fuel supply crisis leading to the temporary closure of many filling stations. These difficulties have posed significant hurdles for existing fuel-cell car drivers and discouraged potential buyers.
Hyundai’s Struggles and Future Plans
Hyundai, the primary manufacturer of hydrogen cars in South Korea, has seen a decline in Nexo sales since its peak in 2022. Despite efforts to boost profitability by reducing Nexo’s cost, sales remain below the desired level.
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According to automotive experts, Hyundai needs to sell 100,000 Nexo units annually to turn a profit. However, current sales figures need to catch up to this target.
untry | January-July 2022 | January-July 2023 | Percentage Change | 2022 Market Share | 2023 Market Share |
---|---|---|---|---|---|
South Korea | 5,534 | 13,390 | -38.7% | 52.0% | 35.2% |
China | 1,842 | 3,073 | 66.8% | 17.3% | 31.9% |
US | 1,926 | 2,333 | 21.1% | 18.1% | 24.3% |
Europe | 634 | 566 | -10.7% | 6.0% | 5.9% |
Japan | 642 | 235 | -63.4% | 6.0% | 2.4% |
Others | 63 | 22 | -65.1% | 0.6% | 0.2% |
Total | 10,641 | 9,619 | -9.6% | 100% | 100% |
Global Trends and South Korea’s Position
The global hydrogen vehicle market also experienced a downturn, with sales declining by over 30% in 2023. South Korea, a leader in hydrogen vehicle adoption, has been overtaken by China in terms of market dominance.
While the South Korean government continues to provide subsidies for hydrogen cars, the allocated budget for this year has been significantly reduced. Despite these efforts, achieving the 6,800 subsidized hydrogen cars target seems unlikely.
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Hyundai’s upcoming release of a new version of the Nexo in 2025 holds promise for revitalizing the market. With technological advancements and renewed marketing strategies, the company aims to regain momentum in the hydrogen vehicle sector.
The low sales of hydrogen cars in South Korea highlight the challenges in transitioning to sustainable transportation. Despite government incentives and industry initiatives, achieving ambitious targets remains challenging. Collaboration and innovation will be crucial as stakeholders work towards a greener automotive future.