Government officials in Nanyang, a city in central Henan province, publicly addressed on Sunday controversy about a local company which said it had built a water-fueled vehicle with a 500 kilometer range, saying it “is not ready for volume production,” reported Beijing Youth Daily.

A Chinese car company named Youngman Automobile Group (Qingnian Automobile in Chinese) reportedly first announced in December it had produced the world’s first water-sourced hydrogen-powered vehicle. Featuring an engine that converts water to hydrogen in real-time, the vehicle has the capability to travel more than 500 kilometers (around 310 miles) before refueling, according to Pang Qingnian, president of the company.

Founded in 2001 by Pang, a 61-year-old Chinese entrepreneur that had been a tractor driver in his early years, Youngman Automobile Group was censured by the Ministry of Industry and Information Technology in 2017 for fraudulently using government subsidies along with six other companies. The Chinese automaker has amassed 30 legal notations for failing to repay financial obligations including contracts and loans, according to court records gathered by Qichacha, and was blacklisted 13 times to enforce repayment.

Youngman Automobile Group did not respond to requests for comment when contacted by TechNode on Monday.

In a visit to the plant on Wednesday, Zhang Wensheng, the Communist Party chief of Nanyang told Chinese media the vehicle was “very good” after a test drive, adding that the progress it made “indicates a bright future for the city’s initiative in hydrogen-powered vehicles” (our translation). In March, the city government announced a plan with local automakers to produce 6,000 hydrogen-powered vehicles, 1,000 buses, and 5,000 vans by year-end.

The project was widely dismissed as fraud by the public both because of its Pang’s questionable history and the low likelihood of the technology’s commercial implementation. Netizens broadly criticized the company on Chinese social media over the past weekend. A netizen using the handle “Ying” questioned in a WeChat post whether the Nanyang government should review its work and admit mistakes to the public, while another one commented that the initiative as “a Ponzi scheme.”

Featuring equipment containing alloy powders and “some special catalyst,” the water generates hydrogen in real-time using electrolysis, Pang said.

A sound idea in theory, the conversion rate is “very low in reality,” a researcher of China’s Academy of Science told Chinese media outlet Jiemian. Global auto makers, including Toyota, Honda and Hyundai have invested in hydrogen-powered fuel cells to power electric vehicles.

Nanyang authorities reworded their statement on Sunday, saying the prototype is still being tested for further improvements. It also denied a rumor of RMB 4 billion ($580 million) in grants to support the company. Youngman Automobile formed a joint company with a Nanyang-area state-backed investment company in November last year, according to the company database website, and the state-backed investor holds 49% share. The company’s registered capital totals RMB 200 million.

Pang is known for founding new energy companies with little to show for it. He has been linked with 73 companies, all which have struck deals with local government including Nanyang, Shizuishan in northwest Ningxia province, and Lianyungang in eastern Jiangsu province to build plants for new energy vehicle beginning in 2010. The Shizuishan project has faded out, and the property in Lianyungang was taken back by local government.

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: or Twitter: @yushan_shen

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