By Ben Otto

South Korea auto-parts supplier Hyundai Mobis Co. has started work on two hydrogen fuel cell plants that will boost its annual production capacity by 100,000 fuel cells in the coming years.

Seoul-based Hyundai Mobis said Thursday that the new plants, being built with an investment of about $1.1 billion, will begin mass production in the second half of 2023. The plants will add to the company's sole existing hydrogen fuel cell facility, built in 2018.

Hyundai Mobis said it expects to use the plants to expand its production lineup that makes use of fuel-cell systems, and to diversify into other sectors such as construction machinery and logistics equipment. Most of the company's fuel cells systems are currently used in hydrogen-powered electric vehicles.

The technology, which mixes hydrogen with oxygen to create electricity, propels a vehicle's motors and emits only water vapor.

"Despite uncertainties including Covid-19, we have decided to make this large-scale investment to secure the market-leading competitiveness in the global fuel cell industry," said Sung Hwan Cho, the company's president and chief executive.

Write to Ben Otto at ben.otto@wsj.com

(END) Dow Jones Newswires

10-07-21 0649ET