Global Sales of Hydrogen Fuel Cell Vehicles Plummet, South Korea and Japan May Collaborate for Revival

Global Sales of Hydrogen Fuel Cell Vehicles Decline Sharply; South Korea and Japan May Collaborate to Boost the Market

As of October 8, 2025, the global market for hydrogen fuel cell vehicles (referred to as “hydrogen vehicles”) is experiencing a significant downturn in sales. The industry is attempting to shift its paradigm through a dual strategy of “transforming commercial vehicles” and forming a “Korean-Japanese supply chain alliance.” Currently, the focus is no longer on short-term performance declines but rather on seizing opportunities in high-growth markets and gaining control over supply chains.

According to data, the sales of hydrogen vehicles in the first half of this year totaled 5,621 units, marking a dramatic decrease of 34.1% compared to the previous year. This decline is primarily attributed to two long-standing issues: insufficient hydrogen refueling infrastructure and the high cost of vehicles. Notably, sales of Hyundai’s hydrogen model, the Tucson, fell by 42.6%. Even with substantial government subsidies, the execution rate of these subsidies was only around 50%.

Despite the shrinking market, the industry has clarified its investment direction — shifting focus from passenger vehicles to commercial vehicles as a breakthrough point. Many in the industry believe that hydrogen fuel has distinct advantages over battery power in terms of long-distance travel and rapid refueling, making it more suitable for large trucks and buses.

In fact, Hyundai has already achieved mass production of its hydrogen fuel large truck, the XCIENT, which has been put into operation in Europe with over 100 vehicles deployed, accumulating more than 15 million kilometers in total mileage. Furthermore, Hyundai has supplied 30 XCIENT trucks to the NorCAL ZERO project in California, accelerating its entry into the commercial vehicle market.

The core variable in this market restructuring is the “Korean-Japanese alliance,” with Japan’s significant investments serving as a key driving force. According to the Korea Trade-Investment Promotion Agency (KOTRA), the Japanese government plans to invest 15 trillion yen over 15 years, leveraging both private and governmental resources. This move indicates a gradual shift in the global hydrogen economy’s focus towards Asia. Japan has set a goal of introducing 20 million tons of hydrogen by 2050 and has implemented a “Contract for Difference (CfD) system” that subsidizes the price difference between hydrogen supply costs and fossil fuel prices, significantly reducing initial market uncertainties.

Japan’s confidence stems from its world-leading technological capabilities: Kawasaki Heavy Industries has launched the world’s first liquid hydrogen transport ship, the Hydrogen Frontier, while Mitsubishi Heavy Industries has successfully developed a gas turbine that can burn 100% hydrogen. These technological advantages are translating into a competitive edge across the entire hydrogen production, transport, and application industry.

The collaboration between South Korea and Japan is entering a more concrete stage. The International Renewable Energy Agency (IRENA) predicts that by 2050, South Korea and Japan will become the world’s two largest hydrogen importers. If the two countries collaborate as “large buyers” to procure hydrogen and standardize technologies, they can achieve both “supply chain stability” and “enhanced price competitiveness.”

Recently, Hyundai, Toyota, and BMW have jointly established the Hydrogen Transport Forum (HTF), with active cooperation underway between companies such as Lotte Chemical and Sumitomo Corporation, as well as SK Innovation and Mitsubishi.

The current decline in hydrogen fuel passenger vehicles is viewed as a ‘growing pain’ in the market development process. On the contrary, the industry has clearly identified commercial vehicles as a core demand area and possesses a strong bargaining chip in the form of the “Korean-Japanese supply chain alliance,” maintaining an optimistic long-term outlook.

The year 2026 is expected to be a critical turning point for the hydrogen economy, with Hyundai set to launch a successor to the Tucson hydrogen model after an 8-year hiatus, and new global commercial vehicle models expected to be introduced.