Hyundai’s hydrogen-fuelled bus ELEC CITY at Kohygen’s charging station (Courtesy of Kohygen)
South Korea’s Hyundai Motor Co. is set to become the largest shareholder of a local hydrogen-powered vehicle charging station operator to increase its share of the country’s eco-friendly bus market, which has been dominated by Chinese electric buses.
The top automaker in Korea will have a board meeting on July 25 to determine a 17.5 billion won ($12.7 million) investment in 3.5 million new shares of Kohygen, a domestic hydrogen vehicle charging service provider, industry insiders said on Sunday. Kohygen will issue a total of 4 million new shares for 20 billion won.
Hyundai Motor’s holding in Kohygen will jump to 48% from 9%. The current No. 1 shareholder Korea District Heating Corp.’s ownership will drop to a 10% level from the current 27.6%, and the shares held by the other seven investors – GS Caltex Corp., SK Energy Co., S-Oil Corp., HD Hyundai Oilbank Co., SK Gas Ltd., E1 Corp. and Air Liquide Korea Co., will fall to around 5% from the current 9.1%.
Market insiders see Chinese electric buses are increasingly dominant in the Korean clean energy bus industry that lacks hydrogen-powered bus charging stations.
“One of the reasons that many local governments in Korea don’t buy hydrogen-fuelled buses is lack of charging infrastructure. The ecosystem of hydrogen buses will revive if Hyundai Motor leads increasing the number of charging stations,” a clean energy vehicle industry official said.
Hyundai’s hydrogen-powered bus ELEC CITY (Courtesy of Hyundai)
SYNERGY WITH BUS PRODUCTION
Hyundai Motor has recently increased the production capacity of its hydrogen bus ELEC CITY to 3,100 per year, sixfold the previous capacity, at its plant in Jeonju of North Jeolla Province.
The automaker aims for a synergy effect between the bus production and charging infrastructure, while strengthening the price competitiveness of the buses to outperform Chinese electric buses.
Hyundai Motor established Kohygen jointly with state-run Korea District Heating and eight companies in February 2021 with a combined 24.1 billion won investment.
The charging service operator for hydrogen-powered commercial vehicles is expected to fall into complete capital erosion within five years. The company posted 3.6 billion won in operating loss last year.
Kohygen plans to increase the number of charging stations across Korea from the current six to 17 in the short-term and to 300 in the long term.
Given that it takes around 3 billion won to launch a charging station, the company’s plan needs around 51 billion won in the short term and 900 billion won in the long term.
Kohygen expects its business operation to stabilize after expanding the charging infrastructure. The company forecasts about 10% of revenue as profit if 100 hydrogen buses use charging services at a station on a daily basis.
Hynet’s hydrogen charging station near the Incheon International Airport in Korea (Courtesy of Hynet)
HYDROGEN-FUELLED PASSENGER CARS
Hyundai Motor is also considering additional investment in Hydrogen Energy Network Co. (Hynet), a hydrogen charging service provider for passenger cars including NEXO, the automaker’s hydrogen fuel cell sport utility vehicle (SUV).
Hyundai, the second-largest shareholder of Hynet with a 28% stake, may become the top shareholder via rights offering as the current No. 1 stakeholder Korea Gas Corp. has decided not to participate in the new share issue.
Hynet, which runs 45 hydrogen fuel cell vehicle charging stations in Korea, saw its liquid debt of 9.2 billion won exceed liquid assets worth 6.9 billion won last year.
The company plans rights offering for existing shareholders as some 3.7 billion won of its debt matures this year.
By Jin-Won Kim
jin1@hankyung.com
Jihyun Kim edited this article.
