ILJIN Hysolus, which is responsible for the hydrogen business at ILJIN Group, is seeking opportunities for a performance rebound. Although it is still in a deficit state, the plan is to aim for a turnaround by targeting the commercial vehicle market with the launch of Hyundai's new hydrogen vehicle, the Nexo, followed by buses and trucks.
ILJIN Hysolus is producing hydrogen fuel tanks for the new Nexo, known as 'The All-New Nexo,' at its factory in Wanju, North Jeolla Province. ILJIN Hysolus is the exclusive supplier of hydrogen fuel tanks for the All-New Nexo. The All-New Nexo, launched last month, is a completely revamped model that has been released after seven years.
ILJIN Hysolus is the only company in the country that produces hydrogen tanks made of carbon fiber. Known as 'Type 4,' it is considered the most advanced form among hydrogen tanks that have been commercialized to date. While Toyota in Japan has begun mass production, it is known that the storage capacity does not match that of ILJIN Hysolus products.
The hydrogen vehicle market is small, and the reliance on Hyundai is high, resulting in significant performance volatility. ILJIN Hysolus recorded deficits until 2017, but posted profits in 2018 when the Nexo was first launched. However, it returned to a deficit in 2023 due to sluggish sales of Hyundai's hydrogen vehicles and delays in new car launches.
There are expectations that performance recovery will gain momentum with the new Nexo's launch. As of the end of March, the cumulative sales volume of hydrogen vehicles in the country was 39,216 units, with vehicles like the Nexo accounting for about 94.9% (37,227 units) of that total. With the launch of the new Nexo, the government has decided to provide subsidies for 13,000 hydrogen vehicles, forecasting that this year's cumulative sales will exceed 50,000 units.
ILJIN Hysolus plans to expand its business into the commercial vehicle market, including buses and trucks, in the medium to long term. There is a view that hydrogen is more suitable for commercial vehicles than passenger cars, considering the short charging time, driving range, and infrastructure conditions. Currently, the company is focusing on securing new clients and is in discussions about supply contracts with companies like Volvo Trucks.
Last year, ILJIN Hysolus expanded its production capacity (CAPA) for commercial vehicles at its Wanju factory in accordance with the government's hydrogen bus expansion policy. The number of hydrogen charging stations for commercial vehicles is steadily increasing. To promote the supply of hydrogen buses, the Ministry of Land, Infrastructure and Transport raised the fuel subsidies for hydrogen buses from 3,600 won per kilogram to 5,000 won starting in March.
Meanwhile, in the first quarter of this year, ILJIN Hysolus's revenue amounted to 1.09 billion won, a 14.3% increase compared to the same period last year, while operational losses continued at 300 million won. Until last year, the company had recorded nearly 10 billion won in operational losses for two consecutive years. The factory's operating rate in the first quarter was 31.3%, falling short of the operating rates of 50.37% for 2023 and 52.37% for 2024.