The global market for hydrogen fuel cell electric vehicles (FCEV) has slowed in recent years, with overall sales declining and many multinational automakers scaling back their hydrogen investments. However, Hyundai Motor has been bucking the trend, driven by its industry-leading EV technology, proprietary technological heritage, and confidence in the long-term potential of hydrogen.
According to data from market research firm SNE Research, global FCEV sales in the first half of 2025 totaled only 4,102 units, dropping by 27.2% year-on-year. Hyundai and Toyota Motor took the top two spots, although both saw drops in sales.
Moreover, Stellantis NV has recently announced its complete exit from the hydrogen business, canceling planned production of hydrogen vans at factories in France and Poland, while HYVIA—a joint venture under Renault Group—chose to liquidate due to weak demand and financial pressures. In addition, Honda Motor has postponed production at its next-generation hydrogen fuel cell module factory and reduced output.
FCEV developments in Europe and Japan have been facing setbacks due to financial constraints and market uncertainties. Since electric vehicles currently dominate the green vehicle market, most countries have prioritized carbon neutrality budgets toward electric vehicles. By contrast, FCEVs lack breakthrough advantages and are 50% more expensive than comparable EVs due to the high costs for hydrogen fuel cells and storage tanks, making them unviable without subsidies.
Even so, Hyundai remains committed to its hydrogen investments, not only maintaining a leading position in the global FCEV market through its Nexo series, but also expanding into sectors such as marine vessels, trams, and hydrogen fuel cells for buildings, to build a comprehensive ecosystem.
Hyundai's rationale for pursuing hydrogen energy
According to the Chosun Daily, Hyundai's approach is informed by the following three factors.
Firstly, Hyundai has achieved stellar results in its EV business to provide the financial flexibility in developing the still-maturing FCEV segment. In the first half of 2025, Hyundai and Kia combined saw operating profits of KRW 13 trillion (US$9.3 billion), leapfrogging Volkswagen to rank second globally. This profitability was due to their technical edge in the rapidly growing hybrid electric vehicle (HEV) market, which has helped mitigate uncertainties related to US tariff policies.
Secondly, hydrogen energy is an important legacy for Hyundai, as it is one of the few manufacturers that can steadily mass-produce hydrogen fuel cell vehicles after nearly three decades of research and development. Compared to long-established automakers in Germany, the US, and Japan, Hyundai's shorter company history means hydrogen technology has become one of its core proprietary assets.
Finally, Hyundai is more optimistic about the future growth potential of FCEVs than other players. This is especially true in commercial vehicle markets in the US and China, with high demand for long-distance transport and robust government support. FCEVs can travel over 700 kilometers on a single fill-up, with distinct advantages including short refueling times and lower weight penalties.
Hydrogen energy is crucial for South Korea as it aims for carbon neutrality, due to the lack of sufficient renewable energy development sites in a densely populated country. In the medium to long term, converting renewable energy into hydrogen for storage and transportation could reduce grid infrastructure needs and cut long-distance electricity transmission costs. However, technological breakthroughs will be needed to achieve this vision, as efficiency and cost remain challenges in the hydrogen conversion, storage, and transportation processes.
Article edited by Jack Wu