Hyundai Motor ramps up hydrogen bus production in 2024

[Courtesy of Hyundai Motor Co.]

South Korea’s sole hydrogen bus manufacturer Hyundai Motor Co. is set to boost its hydrogen bus production capacity sixfold in 2024 after sales of electric buses made in China surpassed those for domestically made ones for the first time.

According to industry sources on Sunday, Hyundai Motor‘s Jeonju plant recently ramped up its annual production capacity for hydrogen buses to 3,000 units, up from 2023’s 500 units. This expansion comes on the heels of a recent facility upgrade dedicated to hydrogen bus production at the company’s Bus 1 plant.

The Jeonju plant serves as a specialized production hub for buses and other large commercial vehicles. Hydrogen buses were primarily mass-produced at Bus 2 Plant until 2023, following trial operations at the Bus 1 plant.

With this increase in annual production capacity, Hyundai Motor is forecast to produce and sell over four times the number of hydrogen buses compared to 2023, amounting to about 1,500 units. According to data from the Ministry of Land, Infrastructure, and Transport, Hyundai Motor sold around 370 hydrogen buses that year.

The increase in production is largely attributable to robust government support, with the Ministry of Environment elevating the purchase subsidy volume for hydrogen buses to 1,720 units, more than double 2023’s target of 700 units.

Hydrogen buses are high-value products, priced between 700 million to 800 million won ($505,415 to $577,617) per unit and manufactured once orders are received. If the government‘s target is met, Hyundai Motor’s hydrogen bus business could see sales exceed 1 trillion won in 2024.

Typically, transportation companies procure hydrogen buses with subsidies from both the central and local governments. A Seoul-based transporter could receive 210 million won from the national subsidy and an additional 90 million won from the Seoul city subsidy, for example, totaling 300 million won in subsidies for a 700 million won hydrogen bus.

With substantial government support in play, there is a growing consensus to foster hydrogen buses as a sector where Korean companies can lead the market, in contrast to electric buses, which have been dominated by Chinese manufacturers.

According to reports from the transport ministry and the Korea Automobile & Mobility Association, Chinese products surpassed Korean offerings for the first time in new electric bus sales in Korea in 2023. Chinese buses are priced over 100 million won cheaper than their Korean counterparts and benefit from government subsidies for eco-friendly vehicles as well.