Hyundai Kia Motors Leads the Way, Significantly Increasing 'Eco-Friendly Vehicle Exports'

Expansion to Over 25% by 2030
Lineup Growth and Diversification of Export Countries
High-Value Automobile Industry Structural Transformation Strategy

[Asia Economy Reporters Kiho Sung and Bokyung Kim] The government plans to increase the export share of eco-friendly vehicles, currently at around 10%, to over 25% by 2030. The strategy involves expanding the eco-friendly vehicle lineup beyond passenger cars to include buses and trucks, diversifying export destinations, and transforming the automotive export industry structure to focus on eco-friendly and high value-added vehicles. In the private sector, Hyundai Kia Motors, which achieved record electric vehicle exports last year, will lead the charge. The global export growth of domestically produced eco-friendly vehicles is also expected to drive the joint growth of small and medium-sized parts companies.

According to the Ministry of Trade, Industry and Energy and Hyundai Kia Motors on the 3rd, Minister Sung Yun-mo and others visited Pyeongtaek and Dangjin ports to see off the first eco-friendly vehicle export shipment of 2020 and announced these plans. The Glovis Sunrise ship that departed from Pyeongtaek Port carried about 2,400 eco-friendly vehicles destined for six European countries including Germany, Portugal, Finland, and Denmark. The first electric vehicle export of the year was the Kia Niro. The hydrogen truck "Neptune," also loaded on the Glovis Sunrise, will undergo testing and pilot operations in Switzerland before full-scale exports begin this year, targeting about 1,600 units by 2025.

Despite stagnation in domestic automobile production, last year’s automobile export value increased by 5.3%, and the role of high value-added vehicles including eco-friendly cars is gradually growing. Compared to conventional internal combustion engine vehicles, the export price of electric vehicles is on average 99% higher, and hydrogen fuel cell vehicles are on average 263% more expensive. The diversification of export models to include buses and ultra-small electric vehicles is also changing the ecosystem of small and medium-sized enterprises producing these vehicles, expanding the presence of new players in the automotive industry.

Accordingly, the government has decided to implement an eco-friendly and high value-added automotive industry export policy aimed at increasing the eco-friendly vehicle export share to over 25% by 2030. To enhance export capabilities for electric and hydrogen fuel cell vehicles, the government plans to work with the automotive industry to expand domestic adoption, improve vehicle performance, and strengthen the competitiveness of the parts ecosystem.

First, the government plans to invest 950 billion KRW, a more than 60% increase from the previous year, to support purchase subsidies and charging station infrastructure for eco-friendly vehicle adoption. The annual sales targets for this year are set at 73,000 electric vehicles and 10,000 hydrogen fuel cell vehicles. Additionally, the eco-friendly vehicle lineup will be expanded to cover all vehicle types including buses and trucks to reduce domestic fine dust and prepare to capture the overseas eco-friendly commercial vehicle market. The government will focus investment on enhancing the performance and durability of key components for this purpose. Subsidies will also be restructured to focus on efficiency and driving range, encouraging private companies to maintain world-class technological capabilities. An official from the Ministry of Trade, Industry and Energy said, "Among the 13 major export items last year, automobiles were the only sector to show growth," adding, "This year, automobiles are expected to lead the rebound in exports of other major items such as semiconductors, shipbuilding, general machinery, petrochemicals, and computers."

Exports of eco-friendly vehicles including electric cars are expected to show double-digit growth again this year. Strengthened environmental regulations worldwide are also influencing the increase in eco-friendly vehicle exports. For automakers, increasing eco-friendly vehicle sales is an unavoidable necessity for sustainable business.

Hyundai Kia Motors’ eco-friendly vehicle exports have surged annually from 76,432 units in 2016, 171,892 units in 2017, 195,684 units in 2018, to 226,581 units last year. In particular, their electric vehicle exports increased about sevenfold from 9,255 units in 2016 to 63,414 units last year, playing a key role as an export driver.

This content was produced with the assistance of AI translation services.