'People want to pick a winner': Why Hyundai continues to forge ahead with hydrogen fuel cell technology along with Toyota and BMW in spite of strong opposition

In the global push to decarbonise the automotive industry, there are often two opposing camps, those who believe solely in battery electric power, and those who embrace a mixture of technologies, including hydrogen.

Those from the much larger, more established battery electric vehicle (BEV) camp often argue that hydrogen fuel is redundant. It requires additional energy-intensive processes, primarily from unrenewable sources, to produce it, while battery power is sourced straight from the grid.

But Hyundai Australia's Senior Manager of Future Mobility and Government Relations, Scott Nargar, argues that's where ‘green’ hydrogen comes to play.

“I don’t buy into the whole one or the other, it's a range of complimentary technologies to meet our targets in the future,” said Nargar.

Hyundai has one of the widest ranges of BEVs but is also a strong supporter of hydrogen fuel cell vehicles.

Unlike conventional ‘grey’ or ‘blue’ hydrogen that is produced from fossil fuels, green hydrogen is made from purely renewable sources through electrolysis, the process of splitting oxygen from water.

As one of the world’s biggest global automakers, Hyundai has invested heavily in the technology as it rapidly diversifies its powertrain offerings before going carbon neutral by 2045.

In 2014, Hyundai unveiled its first hydrogen powered car, the Nexo SUV, which is currently available on special leasing arrangements in Australia. In 2021, it invested $1.62b into two hydrogen fuel cell production plants in South Korea.

Later this year, Hyundai will unveil its first hydrogen production, storage and refuelling plant at its Australian head office in Sydney, which will replace the existing refuelling station that has been in place since 2014.  

Though they aren’t the only automaker investing big in hydrogen fuel cell technology.

Toyota introduced its first hydrogen powered vehicle, the Mirai, to Australia on a similar leasing scheme back in 2021. German automaker BMW toured Australia earlier this year with its iX5 hydrogen prototype.

They’re moves that Australian governments, both federal and state, have largely supported.

Australia’s Future Made in Australia proposal provides $4 billion worth of funding for renewable hydrogen projects, while the ACT and Queensland Governments are two of Hyundai’s biggest hydrogen clients, each leasing a fleet of Nexos in 2021. Both governments have since renewed their leases.

In Europe, where the hydrogen fuel network is far more sophisticated, Hyundai heavy vehicles have just ticked over 10 million km driving purely on green hydrogen, saving an estimated 6300 tonnes of carbon from being dumped into the atmosphere.

Nargar said the feat is a glimpse into the future of how Hyundai expects the move to zero automotive emissions to occur, at least to begin with.

“EVs will replace petrol and hydrogen will replace diesel,” he said.

Even though they are far less ubiquitous than BEVs, hydrogen vehicles have shown they can provide considerably better range, making them more suitable for commercial freight.

Hyundai’s Nexo, for example, can be refuelled in three to five minutes and boasts an official range of 666 km, 6 km more than Australia’s longest range BEV, the Mercedes EQS450 4MATIC.

Both of those figures are dwarfed by the record setting 887.6km journey the Nexo recorded from Melbourne to Broken hill in 2021.

Combined with the relative ease of hydrogen to be stored and moved around, Nargar said the technology presents huge opportunities for rural Australia, where EVs may struggle to match the range of hydrogen vehicles and hydrogen infrastructure may be easier to establish.

But the move to hydrogen hasn't been met without fierce opposition.

Australia’s public policy think tank, the Grattan Institute, has been outspoken in its criticism of the use of hydrogen technologies in the automotive sector out of concern it could dilute valuable funding away from BEVs.

High costs of infrastructure rollout and difficulties upscaling are particular concerns.

The CSIRO’s green hydrogen plant in Clayton, Victoria, for example, cost $2.5 million, but only has capacity to produce 20 kg of hydrogen fuel a day, enough for more than 10 vehicles. Hyundai’s plant in Sydney, which is capable of producing the same amount, cost $2 million.

In total there are just 12 hydrogen stations in Australia, far fewer than what is required for hydrogen to be rolled out on a commercial scale. Germany, which is often considered the benchmark for hydrogen fuel tech infrastructure, currently boasts 86 stations.

A research paper published in December 2023 by the Grattan Institute argued the Australian government “should rule out further investment in hydrogen uses unlikely to be viable, including for replacing natural gas in homes and commercial buildings, and replacing petrol and diesel in cars and utes.”

They’re issues that Nargar is acutely aware of, but with plans to deliver a hydrogen passenger car for commercial sale in Australia within the next decade, they're ones he remains confident will be solved as the Australian market becomes more competitive.

“The more competitors there are for both EV and hydrogen fuel cell, the more awareness there is from governments, which means more policy and more funding for infrastructure, which means Mum and Dads then consider that technology as their next purchase choice.”