Report urges auto industry to go electric
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Korea needs to give equal emphasis to the development of battery electric vehicles and fuel cell cars, considering the estimated future demand and the country’s competitiveness, a report said Thursday. “It’s a well-known fact that our car manufacturers have the mass-production technology for fuel cell automobiles,” the report from the Korea Institute for Industrial Economics & Trade (KIET) said. “However, the accumulated sales of fuel cell electric vehicles (FCEVs) worldwide stopped at 10,000 as of the end of 2018. The demand for fuel cell vehicles in 2030 will be less than 2 percent of the global sales of new automobiles.”
In comparison, sales of battery electric vehicles (EVs) are estimated to exceed the demand for hybrids this year, 10 years since their commercialization, and show fast-paced growth, the report argued. Global rivals are due to market more than 100 different EV models by 2022, it noted.
Korea’s high competitiveness in EV batteries is another reason why the government should not neglect investment in electric cars, the report said, warning that the relative weaknesses in the availability of charging stations and other networks could drag down the industry, despite efforts by local automakers to diversify their EV models. The report responded skeptically to the government announcement in December to give 2 trillion won ($1.79 billion) in assistance to reform the car parts industry.
“If the auto industry, the recipient, is unable to fully accommodate, it could be difficult for the assistance to have the desired effect,” it said.
The same report predicted hard times ahead for local auto companies, affected by the global slump in the car industry.
Questions & Answers
Q.Why does the report suggest Korea should focus on both battery electric vehicles and fuel cell cars?
Why does the report suggest Korea should focus on both battery electric vehicles and fuel cell cars?
The report advises equal emphasis on both vehicle types due to estimated future demand and the country’s existing competitiveness. Korean manufacturers possess mass-production technology for fuel cell automobiles.
Q.What is the report's assessment of the global demand for fuel cell vehicles by 2030?
What is the report's assessment of the global demand for fuel cell vehicles by 2030?
The report estimates that demand for fuel cell vehicles by 2030 will account for less than 2 percent of global new automobile sales. Accumulated sales worldwide were only 10,000 by late 2018.
Q.What is the primary concern regarding Korea's investment in electric cars, despite its battery competitiveness?
What is the primary concern regarding Korea's investment in electric cars, despite its battery competitiveness?
A key concern is the relative weakness in the availability of charging stations and other necessary networks. This could hinder the industry, even with local automakers diversifying their EV models.
Q.Why does the report express skepticism about the 2 trillion won assistance package for the car parts industry?
Why does the report express skepticism about the 2 trillion won assistance package for the car parts industry?
The report suggests that if the auto industry, as the recipient, cannot fully adapt, the assistance may struggle to achieve its intended positive effect. It questions the industry's capacity to accommodate the changes.
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