THE KOREA ECONOMIC DAILY, GLOBAL EDITION

South Korea’s Hyundai Motor Co. is set to become the largest shareholder of a local hydrogen-powered-vehicle charging station operator to boost its share of the nation's eco-friendly bus market, which has thus far been dominated by Chinese electric buses.

Korea's top automaker will hold 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 sources said on Sunday. Kohygen will issue 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 the 10% level from the current 27.6%, and the shares held by the seven other 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 about 5% from the current 9%.

Market insiders view Chinese electric buses as increasingly dominant in the Korean clean energy bus sector, which lacks hydrogen-powered bus charging stations.

“One of the reasons that many local governments in Korea don’t buy hydrogen-fueled buses is the lack of charging infrastructure. The ecosystem of hydrogen buses will be revived if Hyundai Motor spearheads the increase in the number of charging stations,” a clean energy vehicle industry official said.

SYNERGY WITH BUS PRODUCTION
 
Hyundai Motor has recently increased the production capacity of its ELEC CITY hydrogen bus to 3,100 per year, six times the previous capacity, at its plant in Jeonju, North Jeolla Province.

The automaker aims for a synergy effect between the bus production and charging infrastructure, while also strengthening the buses' price competitiveness to outperform Chinese electric buses.

Hyundai Motor established Kohygen together with state-run Korea District Heating and eight other 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 a 3.6 billion won operating loss last year.

Kohygen plans to up the number of charging stations across Korea from the current six to 17 over the short-term and to as many as 300 over the long term.

Given that it takes about 3 billion won to launch a single charging station, the company's plan calls for about 51 billion won over the short term and 900 billion won over the long term.

Kohygen expects its business to stabilize after the charging infrastructure is expanded. The company forecasts a profit level of 10% of revenue if 100 hydrogen buses use charging services at a station per day.

HYDROGEN-FUELED PASSENGER CARS

Hyundai Motor is also mulling 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.

Hyundai, the second-largest shareholder of Hynet with a 28% stake, may become the top shareholder through a rights offering given that the current No. 1 stakeholder Korea Gas Corp. has decided not to take part in the new share issue.

Hynet, which runs 45 hydrogen fuel cell vehicle charging stations across Korea, saw its liquid debt of 9.2 billion won exceed liquid assets of 6.9 billion won last year.

The company plans a rights offering for existing shareholders as some 3.7 billion won of its debt matures this year.

Write to Jin-Won Kim at jin1@hankyung.com
Jihyun Kim edited this article.