Hyundai to Lease Fuel-Cell SUV for $499 as Hydrogen Race Widens

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Hyundai Motor Co. (005380), eager to move
ahead of Honda Motor Co. and Toyota Motor Corp. (7203) in hydrogen-powered vehicles, plans a $499-a-month U.S. lease for its zero-emission Tucson crossover version that arrives in 2014.

Hyundai, South Korea’s largest automaker, announced the
program yesterday at the Los Angeles Auto Show, initially
targeting California, which has the most hydrogen fuel stations
in the U.S. The monthly price, and a $2,999 down payment,
includes unlimited fuel and no-cost maintenance during the 36-month lease, the Seoul-based company said.

“Hydrogen-powered fuel-cell electric vehicles represent
the next generation of zero-emission vehicle technology,” John Krafcik, chief executive officer of Hyundai’s U.S. sales unit,
said in Los Angeles. “We’re thrilled to be a leader in offering
the mass-produced, federally certified Tucson Fuel Cell to
retail customers.”

Hyundai is stepping up competition in fuel-cell vehicles as
automakers add them to battery-only and plug-in hybrid models
being sold to curb petroleum use and reduce carbon-dioxide
emissions. Honda unveiled a restyled version of its hydrogen-powered Clarity, which began small-volume consumer leasing in
2008, and Toyota is displaying a new fuel-cell sedan at the
Tokyo Motor Show. Those cars are to go on sale by 2015.

“Fuel-cell technology will increase the adoption rate of
zero-emission vehicles, and we’ll all share the environmental
benefits,” Krafcik said.

U.S. Production

Hyundai fell 0.4 percent to 253,500 won as of 12:09 a.m. in
Seoul trading. The shares have gained 16 percent this year,
compared with a 0.1 percent decline in South Korea’s benchmark
Kospi index.

The carmaker’s new fuel-cell stack and motor system, on
display in Los Angeles, is about the size and weight of a
conventional gasoline engine. It’s being used in an existing
vehicle to hold down development and production costs, the
company said.

The automaker has been building the Tucson Fuel Cell on the
same assembly line that makes the gasoline version in Ulsan,
South Korea, since February 2012, according to a separate e-mailed statement from the company today. The fuel-cell cars made
in Ulsan have been sold to countries including Denmark and
Sweden.

U.S. production will start in February, Mike O’Brien,
Hyundai’s U.S. vice president for product planning, said in an
interview.

“Within Hyundai, there’s an unequaled desire to get this
right,” O’Brien said. “We’re not setting a hard volume target
for this vehicle. We can build to where demand goes.”

Lengthy Development

Hyundai, Toyota, Honda, Daimler AG (DAI) and other carmakers say
they’re prepared for a slow expansion of fuel-cell vehicles, as
the number of hydrogen stations is still small and the cells and
carbon-fiber fuel tanks used in the vehicles are costly.

Automakers collectively have poured billions of dollars
into fuel cells since the 1990s, spurred by hydrogen’s allure as
an abundant, low-carbon fuel. Critics, such as Tesla Motors Inc. (TSLA)
Chief Executive Officer Elon Musk, deride it as too complex, too
costly and not clean enough, since most hydrogen is generated
from natural gas.

Hyundai, Toyota, Honda and others argue that it’s a game-changer: petroleum-like performance with zero tailpipe emissions
and avoiding the size, range and refueling-time issues of
battery-electric autos.

The Tucson Fuel Cell can be refueled in a few minutes and
has range of about 300 miles (483 kilometers) per filling,
O’Brien said. The company said four Southern California
dealerships will be first to carry the vehicle, in early 2014.

Hydrogen fuel cells have been used in spacecraft since the
1960s. They generate electricity and emit only water vapor. For
mass-market appeal, carmakers are competing to cut the cost of
the cell stacks, which use expensive precious metals, and the
high-pressure carbon-fiber fuel tanks.

“There’s a sense that no one company owns this technology
yet,” O’Brien said. “In that sense, it’s kind of a jump
ball.”

To contact the reporter on this story:
Alan Ohnsman in Los Angeles at
aohnsman@bloomberg.net

To contact the editor responsible for this story:
Jamie Butters at
jbutters@bloomberg.net


Enlarge image
Hyundai Tucson

Hyundai Tucson

Hyundai Tucson

Jonathan Alcorn/Bloomberg

Members of the media photograph the engine of a Hyundai Motor Co. Tucson Fuel Cell vehicle during the LA Auto Show in Los Angeles on Nov. 20, 2013.

Members of the media photograph the engine of a Hyundai Motor Co. Tucson Fuel Cell vehicle during the LA Auto Show in Los Angeles on Nov. 20, 2013. Photographer: Jonathan Alcorn/Bloomberg


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Enlarge image
Hyundai’s U.S. Sales Unit CEO John Krafcik

Hyundai’s U.S. Sales Unit CEO John Krafcik

Hyundai’s U.S. Sales Unit CEO John Krafcik

Jonathan Alcorn/Bloomberg

“Hydrogen-powered fuel-cell electric vehicles represent the next generation of zero-emission vehicle technology,” John Krafcik, chief executive officer of Hyundai’s U.S. sales unit, said in Los Angeles. “We’re thrilled to be a leader in offering the mass-produced, federally certified Tucson Fuel Cell to retail customers.”

“Hydrogen-powered fuel-cell electric vehicles represent the next generation of zero-emission vehicle technology,” John Krafcik, chief executive officer of Hyundai’s U.S. sales unit, said in Los Angeles. “We’re thrilled to be a leader in offering the mass-produced, federally certified Tucson Fuel Cell to retail customers.” Photographer: Jonathan Alcorn/Bloomberg


Enlarge image
Toyota FCV Concept Vehicle

Toyota FCV Concept Vehicle

Toyota FCV Concept Vehicle

Kiyoshi Ota/Bloomberg

A Toyota Motor Corp. FCV Concept vehicle stands on display while members of the media take photographs at the 43rd Tokyo Motor Show 2013 in Tokyo on Nov. 20, 2013.

A Toyota Motor Corp. FCV Concept vehicle stands on display while members of the media take photographs at the 43rd Tokyo Motor Show 2013 in Tokyo on Nov. 20, 2013. Photographer: Kiyoshi Ota/Bloomberg

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