Hyundai receives millions from the government to buy its own hydrogen-powered cars

promoting hydrogen mobility hydrogen cars: this hyundai deal raises questions

The nexo has already been on the market since 2018; hyundai has sold just 150 of them in germany in the whole of 2021, and there have been fewer than 1000 across europe since its launch.

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14.300 euros per car transferred by the state to a leasing company from the hyundai group to promote hydrogen mobility. The invests the money – in hyundai cars.

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Hydrogen is not yet a success story in passenger cars, even though this form of propulsion has existed since 1966: annual sales figures have been in the three-digit range for years. According to the federal motor transport authority, just 40 of the approximately 228.000 new passenger cars in germany in december 2021 powered by hydrogen.

last tuesday’s announcement makes us sit up and take notice: leasing provider allane SE, formerly sixt leasing, will take over 800 hyundai nexo fuel cell cars in its fleet. The nexo has already been on the market since 2018; hyundai has sold just 150 of them in germany in the whole of 2021, and according to its own figures, there have been fewer than 1,000 across europe since the market launch. So now 800 at once to just one leasing provider?

14.300 euro tax money per car

This is made possible by a surprisingly generous grant from the federal ministry of transport: allane will receive up to 11.4 million euros from the state agency NOW, which reports to the federal ministry of transport and the federal ministry of environment. That’s up to 14.299 euros government subsidy per car – more than double the government subsidy for electric cars.

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Specifically, the money comes from the "national innovation program for hydrogen and fuel cell technology (NIP)," which runs until 2026. The NIP is implemented by NOW as an interdepartmental program of the federal government under the leadership of the Federal Ministry of Digital Affairs and Transport, BMDV. The goal is "research and development as well as market preparation of hydrogen and fuel cell technology in the transport sector."

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A bitter dispute has been raging for years about whether fuel cells and hydrogen have any future at all in cars. Recently, more and more manufacturers had stopped their hydrogen car plans and only continued to develop pure e-cars. Only hyundai and toyota currently have hydrogen models on the market, but there are hardly any customers for them because of their high price; in addition, the hydrogen filling station network is still very thin. Most recently, federal Transport Minister volker wissing (FDP) also emphasized that the battery had clearly won out in the passenger car sector. The managing director of the state-owned NOW, kurt-christoph von knobelsdorff, sees things differently. "there are several paths to climate neutrality in the transport sector. If a company like allane now markets 800 examples of the hyundai nexo, that’s a strong signal to the market and shows that the fuel cell also has prospects in passenger cars," he said.

donglim shin, CEO of allane, also emphasizes his green ambitions: "we are pleased that the federal government is supporting our ambitions in the area of sustainable mobility with such a large sum of money. Together with hyundai (…) we want to make a contribution to establishing alternative drive technologies and making individual mobility significantly more environmentally friendly," NOW quotes the allane boss as saying on its website.

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But there is one interesting detail that all parties involved are not mentioning: allane is a 92 percent subsidiary of hyundai capital bank europe, which acquired the majority of shares from sixt in 2020. "to put it bluntly, you could say that hyundai is selling its own cars to itself with government subsidies," says an allane competitor. NOW head von knobelsdorff said in response to a question that the criteria for funding under the NIP program are "the same for all applicants"." allane was neither favored nor disadvantaged in the approval process because of its affiliation with hyundai, he said. A total of 2164 applications for fuel cell cars were approved in the funding call in question, even though "the 800 for allane was by far the largest single application to date".

The fact is: the 11.4 million euros for allane is by far the highest sum ever awarded to a single project under the NIP for passenger cars. Normally, NOW subsidizes special vehicles such as hydrogen-powered garbage trucks from the pot. So much money for hydrogen cars is unusual, to say the least. In addition, allane leasing, which belongs to hyundai capital bank europe, should not only have applied for hyundai fuel cell cars; there is also a competing model from toyota. The federal ministry of digital affairs and transport has so far declined to comment further on the matter.

According to allane, the money will be used to provide hyundai’s hydrogen cars to leasing customers "at particularly attractive conditions. The leasing rates start at 718 euros net per month, including value-added tax at 856 euros. allane does not want to put an exact figure on how much the same cars would cost under comparable leasing conditions without the lavish injection of government money: "the list price of the vehicle of 69.327 euros (excluding value-added tax) is generated by the subsidy of 14.299," says the company in response to a query. "it can be roughly said that the leasing rate is reduced in approximately the same proportion as the purchase price."but on the market the nexo is sometimes offered cheaper at similar leasing conditions. Allane says: "the exact lease rate depends on a lot of factors, like term, mileage, etc"."

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By the way, the money given to allane is not to be confused with the so-called environmental bonus: in addition to pure e-cars and plug-in hybrids, fuel cell cars that run on hydrogen are also subsidized. But only up to a maximum nettolist price of 65.000 euros; on the reporting date, the nexo was just too expensive for this, hyundai announced.