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

Hyundai Tucson
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

Hyundai Motor Co., eager to move ahead of Honda Motor Co. and Toyota Motor Corp. 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 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. 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.”

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