(Yicai Global) Oct. 30 -- A lab under the Chinese renowned Tsinghua University will establish a fund with South Korea's Hyundai Motor to pioneer research into hydrogen energy vehicles. 

Tsinghua's Industrial Research and Development Institute and Hyundai signed a memorandum of understanding, the Seoul-based carmaker said in a statement yesterday. The fund will invest in innovative companies in the hydrogen energy sector with a size expected to reach around USD100 million.

Shuimu Yield Capital Management, the Beijing-based lab's investment arm, will collaborate with Hyundai in financing and managing the fund and seek investors in regions like Asia, Europe and North America.

The pair have already chosen two advisors for the investment platform. Zhang Yongwei, the general secretary of industry alliance China Committee of Electric Vehicles 100 Members, is one of them, and Kim Sae-hoon, the head of Hyundai's fuel cell group, is the second one. 

Hyundai Motor will not have a solid foundation and support for its future expansion into the Chinese hydrogen vehicle market unless it fully utilizes the first-mover advantage and builds an industrial ecosystem through the fund, a staff member at the firm told Yicai Global. Hydrogen vehicles pose advantages due to their battery life efficiency, fast charging, and emission-free service but are currently more expensive than electric cars. 

China plans to make 1 million hydrogen vehicles and 1,000 hydrogen refueling stations by 2030, according to its development plan. Shanghai has become the first Chinese city to issue its own hydrogen white paper with the goal of setting up two global top research centers by 2025 and a production capacity of 30,000 cars.

Hyundai Motor started developing hydrogen vehicles 20 years ago, and achieved mass production in 2013, public data shows. Beijing Hyundai Motor, Hyundai Motor's joint venture in China, intends to have new energy vehicles account for 10 percent of its total production by 2020.

Editor: Emmi Laine