Hydrogen-related stocks were mixed Tuesday after a new–significant–competitor announced plans for the hydrogen market. More capital investment heading into the growing hydrogen economy might be a boost for everyone. Still, investors are reacting with a little caution.
Korean auto giant
(ticker: 005380.Korea) announced Tuesday it would make hydrogen fuel cell versions of all its commercial vehicles by 2028. What’s more, it plans to introduce a new fuel cell system in 2023 and cut the cost of fuel cell vehicles to the equivalent of battery electric vehicles by 2030.
“Hyundai Motor Group’s vision is to apply hydrogen energy in all areas of life and industry such as our homes, work-places and factories,” said Chairman Chung Eui-sun in the company’s news release. “We want to offer practical solutions for the sustainable development of humanity and with these breakthroughs, we aim to help foster a worldwide Hydrogen Society by 2040.”
Those are bold goals and they are moving hydrogen-related stocks. But the direction isn’t uniform. Stock in hydrogen fuel cell trucking company
(NKLA) is up 2.3%. Fuel cell technology player
(PLUG) shares are up 0.2%. Stock in fuel cell maker
(BLDP) is up 2.6%.
Investors seem to believe more hydrogen investment from more players to develop the industry is a positive. But shares of hydrogen fuel cell commercial vehicle
(HYZN) are down 7.4%, bucking the trend.
Hyundai Motor stock is down 1.2% in overseas trading.
Hydrogen technology is still relatively new so some stock market volatility might be expected.
Hydrogen is, essentially, a way to store the energy of the sun–just like oil and natural gas. Hydrogen gas can be made by passing electricity through water. Then it can be burned or used in a fuel cell to generate electricity. If the electricity used to split the water is from a renewable source–like solar panels–no carbon dioxide is emitted. Carbon dioxide is the main gas blamed for climate change.
Crude oil and natural gas also concentrated sun energy. They are the remains of plants — plants which used the sun to grow. But when those are burned a lot of carbon dioxide is released.
Hydrogen is one solution for the planet to achieve carbon neutrality — not adding any more carbon dioxide to the atmosphere. Hydrogen seems to be better suited to commercial vehicle applications where batteries might not support long hauls.
Electric vehicles use batteries to store electrical energy. But batteries are heavy. That isn’t a problem for passenger cars, but it might be a problem for semitrucks needing to travel hundreds of miles every day. Battery packs that large would limit the weight of freight that could be towed. Compressed hydrogen gas might solve that conundrum.
In a zero carbon future, long haul trucking applications could be powered by hydrogen gas generated with renewable power. And passenger vehicles could be powered by battery EVs charged by electricity generated with renewable power.
Passenger EVs today are close to the price of gasoline powered cars. But the cost of producing hydrogen gas is much higher than the equivalent amount of gasoline or diesel fuel. Down the road, costs should fall, allowing hydrogen players to compete with older technologies on costs and not only on environmental benefits.
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