Hyundai Motor to cut price of hydrogen fuel cell vehicle

Hyundai Motor Co., the nation’s largest carmaker, has decided to lower the price of its Tucson fuel cell sport utility vehicle to compete with rising Japanese rival Toyota Motor in the segment, industry sources said.

“Hyundai Motor recently informed Gwangju City, a major local buyer of the Tucson FCV, of its internal decision to cut the car price,” an industry insider close to the matter said on condition of anonymity last week.

Gwangju City, which purchased five Hyundai FCVs last year, has a plan to buy 10 more Tucson FCVs this year for use during the Gwangju Summer Universiade in July.

“Hyundai Motor made the move, pressed by Toyota’s fast move to create a market for its first fuel cell car Mirai, armed with bargain-price,’’ the insider said. 

Toyota debuted the FCV Mirai, a mid-size four-door sedan, at the 2014 Los Angeles Auto Show in November with a price tag of 7.24 million yen ($62,000). The price is almost half that of a Tucson FCV priced at 150 million won ($139,000). Both prices exclude the government rebates.

However, Hyundai seems to need more time to decide how much it will reduce the price of its strategic eco-car, he added.

“It is a possible scenario for Hyundai to choose a bold price-cutting option, considering a wide price gap between the Tucson FCV and Mirai,’’ said Kim Phil-soo, an automotive engineering professor at Daelim University.

Hyundai Motor jumpstarted the “ultimate’’ eco-car market last February, completing the assembly line for the mass production of its FCV for the first time in the world last February, but the carmaker sold only 200 units mainly because of the expensive car price.

The carmaker sold only 10 units at home last year. In Korea, the government subsides $55,700 per Tucson FCV unit, meaning that individual Korean consumers still have to pay $83,500 to buy Hyundai’s hydrogen-powered car.

In contrast, Toyota announced last Thursday that the Mirai fuel cell sedans racked up approximately 1,500 orders in Japan, a month after sales began on Dec. 15, 2014.

The Japanese carmaker said about 60 percent of the orders came from government offices and corporate fleets, and 40 percent from individual consumers.

“Without the new price policy, Hyundai Motor in the hydrogen-powered car sector could lose its market leadership role to Toyota,” the professor said.

Since the launch of Mirai last November, Toyota has moved faster than expected to create demand for the model. At the 2015 International Consumer Electronics Show, the Japanese carmaker announced it would release its 5,680 patents related to fuel cell technology by 2020 to become a game-changer in the sector.

Another thing holding back sales in Korea of the Tucson FCV is the lack of hydrogen fueling stations, which is key for creating a market environment for the car. Korea has only around 10 stations nationwide. The Ministry of Environment, which is in charge of building the fueling infrastructure, plans to increase the number of stations to 200 by 2025.

Japan is moving faster than Korea in this sector as well. According to the Japanese government’s long-term road map for a “hydrogen society,” about 100 hydrogen fueling stations will be installed this year in major Japanese cities.

“It is time for Hyundai Motor and the government to sit down together to discuss a strategic approach toward rising completion for fuel cell cars,’’ Kim said.

Besides Toyota, Honda Motor is planning to market its FCVs in 2015, and Nissan Motor will follow the move in 2017.

German car giants are jumping on the bandwagon as well. Mercedes-Benz, for instance, has signed off on a B-class hydrogen car, which is expected to be produced in small scale and sold in 2017.

By Seo Jee-yeon and Claire Lee
(jyseo@heraldcorp.com) (dyc@heraldcorp.com)