1. Print Friendly
  2. Commentary Archive
  3. Bio

Hyundai - The Silent Revolution In Fuel Cell Technology

Thursday November 21, 2013 11:46

Much hype, and very large marketing budgets, are still dominating the discussion on alternative energy technologies. Hype that often didn’t meet expectations in the past, leaving consumers and investors behind in confusion, and not addressing questions about the future demand for technology metals.

Inthe past two years, battery-powered electric vehicles (BEVs) seemed to gain the upper hand; fuel cell technology appeared to be the eternal R&D project with no success to show for itself. Just recently, however, fuel cells gained traction through very specific announcements made by Toyota, Mercedes Benz and Honda, who announced they will have production cars ready by 2014/15. A closer look reveals that all of these projects are still “beta” stages. These cars aren’t ready to drive or even look at in their final design.

While all of these things were happening, Hyundai entered the stage without similar fanfare, but with a lot more tangible results. Not only are they starting to deliver roadworthy prototypes based on their ix35 crossover SUV, the company is also readying a new plant capable of making at least 10,000 units of the ix35 FCEV’s successor annually. To learn more about Hyundai’s technology and their market approach we spoke with Frank Meijer, team leader of FCEV & infrastructure development at the company’s European headquarters in Germany.

Meijer explained that it was Hyundai’s strategy from the start to have complete ownership of the entire system with all of its components. The vehicles are currently built exclusively in Korea where efforts were made to acquire the know-how to build it completely in-house, down to the last screw. This process may have taken longer than forging a strategic alliance but Hyundai considers FCEVs a core technology and therefore wishes to possess the entire product in house.

On the marketing side, Hyundai recognizes the fact that a large group of consumers aren’t yet ready to accept the technology. Main consumer concerns to be addressed are:

  1. Lack of infrastructure. Many consumers are worried there aren’t enough filling stations available, a disadvantage at this stage of the game even compared to BEVs which can be charged from any power outlet (theoretically). However, Meijer quoted a study conducted by a group of petrochemical companies indicating that most consumers visit the exact same gas station for 85% of their refueling. Different stations are only used when traveling long distances, which is relatively rare (15%). Supported by government incentives in many countries around the world, filling units will go up by the 100’s over the next couple of years, providing a sufficient infrastructure to remove this concern.


  2. Perception of safety. Recent events with Tesla vehicles demonstrate how sensitive – sometimes outright scared – consumers are when it comes to new technologies. Meijers pointed out that the filling systems of all FCEVs are equipped with many safety features making fueling and operation as harmless as driving a gasoline powered car. FCEVs were also tested over many years without an incident of comparable magnitude and publicity as the Tesla fires. Further, the H2 filling process is no different than the filling process for natural gas which is already used as a fuel for vehicles all over the world.

Hyundai developed a multi-stage strategy to counter these concerns. The plan is to first increase the footprint of FCEVs through fleet sales rather than sales to individual consumers. Large companies (intended participants are named in the attached presentation – see below) utilize their vehicles frequently enough to see the benefits even if the cost of the cars is somewhat higher in the beginning. Many of them also operate out of hubs, making it easy to provide the filling infrastructure. Today’s ix35 FCEW has a range of over 500km so the cars can go quite far during the day. Fans of German Autobahns will also appreciate that they are faster than most BEVs – during my test drive I was unable to verify it but I was assured the FCEV ix35 will reach travel speeds of 160km/h (~ 100mph). The consumer market will be targeted later, once the technology has become more mainstream.

To manage cost, and to make the vehicle more acceptable to mainstream customers over time, Hyundai is utilizing an approach other manufacturers (like VW or Mercedes Benz) are taking as well: offer a variety of different powertrains for the same models. Apart from a somewhat different driving experience, consumers will hardly notice the difference between a conventional car and one equipped with a fuel cell.

Asked about timelines, Meijer – like several other TechMetals Insider guests before – cautioned that this will be a very slow process. As indicated in his charts, Hyundai does not expect the consumer market to be open for larger scale adoption prior to 2020.

You can download the detailed presentation on Hyundai’s FCEV plans here.

By Bodo Albrecht
tminsider@eniqma.com

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
kitco news

Precious Metal Charts

Click to see this Precious Metal chart
  1. 24h
  2. 30D
  3. 60D
  4. 6M
  5. 1Y
 

Interactive Chart