Hyundai Motor Eui-Seon POSCO Choi Jeong-Woo Hydrogen Alliance

On the 16th, Hyundai Motor Group Chairman Eui-sun Eui-sun and POSCO Group Chairman Choi Jeong-woo agreed to cooperate in all directions to build a hydrogen industry ecosystem. It is the first example of a Korean sign company joining hands to capture the global hydrogen market.

On the 16th, Hyundai Motor Group and POSCO Group signed a’business agreement on hydrogen business cooperation’ at Cheongsong University, a POSCO guesthouse in Pohang, Gyeongbuk. The two companies decided to replace 1,500 commercial vehicles used at POSCO Pohang and Gwangyang Works with hydrogen electric vehicles and build a hydrogen charging station in the steelworks.

In addition, it plans to develop eco-friendly’green hydrogen’ production technology that is extracted by electrolyzing water based on renewable energy. It has decided to expand the scope of cooperation by jointly promoting the hydrogen fuel cell power generation business and exploring opportunities for overseas hydrogen business.

It is analyzed that if Hyundai Motor Group, which has world-class technology in the field of hydrogen fuel cells and hydrogen electric vehicles, and POSCO Group, a leader in materials, will join hands, it will be able to dominate the global hydrogen market. The global hydrogen economy is expected to grow to 2.5 trillion dollars (about 2800 trillion won) in 2050 (McKinsey). Along with the observation that POSCO and other domestic companies will begin cooperation with Hyundai Motor Group, there is also a prospect that a’hydrogen dream team’ will be formed.

Chairman Chung said, “The paradigm shift to the hydrogen economy to achieve’carbon neutral’ is a challenge facing all industries and companies. We will contribute to creating a robust hydrogen industry ecosystem in cooperation with POSCO Group.”

Chairman Choi said, “The POSCO Group will produce hydrogen and the Hyundai Motor Group will create various opportunities for cooperation in a way that uses it.”

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For more than 20 years, the Hyundai Motor Group had to be asked, “Why are you obsessed with hydrogen?” This was the case when it started developing hydrogen electric vehicles in 1998 and when it launched the world’s first mass-produced hydrogen electric vehicle (Tucson FCEV) in 2013. This perception remained the same until the launch of the next-generation hydrogen electric vehicle Nexo in 2018.

The atmosphere has completely changed since last year. There have been observations that hydrogen will play a key role in future energy, and many global automakers are preparing to launch hydrogen electric vehicles. Global consulting firm McKinsey has made an observation that the global hydrogen economy will grow to 2.5 trillion dollars (about 2800 trillion won) in 2050. There are also observations that a’hydrogen dream team’ will be formed, led by Korean companies, as an opportunity to collaborate with Hyundai Motor Group and POSCO Group.

The reason hydrogen leaders joined hands

On the 16th, Hyundai Motor Group and POSCO Group signed a business agreement on cooperation in hydrogen business. Hyundai Motor Group Chairman Eui-sun Eui-sun and POSCO Group Chairman Choi Jeong-woo stepped up. The two companies agreed to △convert 1,500 vehicles in Pohang and Gwangyang Works to hydrogen electric vehicles △Establish hydrogen charging stations in steelworks △Joint development of green hydrogen production technology △Joint development of next-generation materials for hydrogen electric vehicles △Joint participation in overseas hydrogen projects.

Both companies have made major investments in the hydrogen industry. The Hyundai Motor Group has set a goal to produce 500,000 hydrogen electric vehicles and 700,000 hydrogen fuel cell systems by 2030. To this end, it plans to invest 8 trillion won in the hydrogen electric vehicle field and hire 50,000 new employees by 2030. In December of last year, the POSCO Group announced that it will become a leading green hydrogen company leading the hydrogen economy. It also revealed plans to establish a 5 million ton hydrogen production system by 2050 and generate 30 trillion won in annual sales in the hydrogen industry.

This cooperation is to build a hydrogen ecosystem. If POSCO is in charge of producing and supplying hydrogen and the Hyundai Motor Group develops a fuel cell system, the company believes that it will be able to quickly transform into a hydrogen society. POSCO currently has the capacity to produce 7000 tons of hydrogen per year. POSCO has set a goal to create a system that can produce green hydrogen (the ultimate eco-friendly hydrogen based on renewable energy) in large quantities (2 million tons in 2040).

Chairman Jeong expands the scope of collaboration

In the business world, an analysis also revealed that Chairman Chung is expanding the pace of collaboration. Last year, Chairman Chung met with Samsung Electronics Vice Chairman Lee Jae-yong, SK Group Chairman Choi Tae-won, and LG Group Chairman Koo Kwang-mo. The intention is to join forces for the development of next-generation electric vehicle batteries. There were also several meetings for the heads of four groups. In particular, it was evaluated as’unconventional’ for being two times exclusive with Samsung’s long rivals.

The analysis is that this collaboration is also a move that exceeds expectations. The Hyundai Motor Group and POSCO Group also did not exchange for a while. This is because Hyundai Motor Group created Hyundai Steel and entered the steelmaking business and became a competitive relationship with POSCO. Hyundai Motor Company and Kia have steadily reduced the proportion of POSCO steel plate use, and POSCO has also focused on collaboration with other automakers such as Ssangyong Motor.

The atmosphere began to change in 2018, when Chung took over the management. In 2019, Hyundai Motor Group hired Ahn Dong-il, former director of POSCO Pohang Works, as the CEO of Hyundai Steel. At the time, it is known that a senior official of Hyundai Motor Group directly sought out understanding from POSCO.

In this atmosphere, Chairman Chung directly attended an agreement ceremony held at the Pohang Works in Pohang, Gyeongsangbuk-do. Prior to the ceremony, he toured the Pohang 2 blast furnace, one of POSCO’s smart blast furnaces. In the industry, it is predicted that SK, GS, and Hanwha will also form a hydrogen alliance with the Hyundai Motor Group. A business official said, “Chairman Chung is becoming the industrial center in the future mobility field.”

Byungwook Do/Mansu Choi, reporter [email protected]