Automotive Industry: "To Expand Eco-Friendly Vehicle Adoption, Market Development Needed Through Charging Station Expansion, Not Regulation"

"Mandatory Sales System and Other Regulations Cause 290,000 Decrease in Domestic Car Production Over 5 Years"

[Asia Economy Reporter Kim Ji-hee] The automotive industry pointed out that expanding the supply of zero- and low-emission vehicles requires creating a competitive environment such as infrastructure expansion rather than regulation-centered policies. An analysis shows that if the government's roadmap for electric and hydrogen vehicles is enforced through regulations like mandatory sales, domestic automobile production could decrease by 290,000 units and production value could drop by 8.7 trillion KRW over the next five years.

The Korea Automobile Industry Association (KAIA) announced on the 29th that it held the 9th meeting on the afternoon of the 28th at the Korea Automobile Industry Association, attended by six affiliated organizations and related agencies. At this meeting, participants shared the recognition that the expansion of electric vehicles, following the government's 2050 carbon neutrality declaration and the National Climate and Environment Council's proposal to ban internal combustion engine sales, is only possible with infrastructure expansion and smooth market functioning, and decided to make government recommendations regarding electric vehicle charging stations.

KAIA expressed concerns about regulation-focused policies such as mandatory sales for expanding zero- and low-emission vehicles, discontinuation of internal combustion engine vehicle sales, and carbon dioxide fuel efficiency regulations. They cited the example of China, which reduced electric vehicle subsidies and implemented a mandatory sales policy for zero- and low-emission vehicles after July 2019, resulting in a sharp decline in market demand and a decrease in electric vehicle sales by more than 30%.

Regarding electric vehicle charging stations, KAIA evaluated that this year the number of fast and slow chargers has more than doubled compared to the previous year, increasing the ratio of electric vehicles per charger to 5.0, a level comparable to major countries such as France, Germany, and Japan. However, they pointed out that since chargers have been built mainly for public use or installation convenience, utilization rates are low. The domestic residential private charger penetration rate is only 25.1%, meaning that three out of four electric vehicles cannot be charged at home.

Accordingly, KAIA argues that the current public-centered charging infrastructure policy should be completely shifted to a policy that enables charging at home. They urged expanding the mandatory ratio of charging facilities in newly built and existing apartments in proportion to the government's long-term electric vehicle supply goals, and called for measures such as installing chargers in existing apartments and expanding power reception capacity. They also insisted on systematizing post-management of chargers and clarifying responsibilities.

Regarding hydrogen fuel cell vehicle charging infrastructure, KAIA pointed out that due to delays in local government permits, the actual performance is only 42% of the plan. Therefore, KAIA proposed ▲ setting a clear consultation period with local governments within one week when the Ministry of Environment approves hydrogen charging station establishment ▲ increasing support for construction costs of privately invested general charging stations from the current 50% to 70% ▲ shortening the evaluation period for hydrogen charging station operation subsidies to semiannual ▲ providing additional budget support to local governments and incentives such as extra points in evaluations based on hydrogen charging station construction performance ▲ resolving difficulties in securing sites.

Regarding general policies related to zero- and low-emission vehicles, KAIA emphasized, "Among the 24 countries worldwide that have declared bans on internal combustion engine sales, 22 countries' declarations have no legal effect. Even in France, where the ban is legally effective, it only applies to passenger cars and small vans by 2030, and Colombia has banned sales only for public transportation." They added, "It is also important to note that most declaring countries are not automobile producers or consider their energy or industrial characteristics when making such declarations."

Jung Man-ki, chairman of the Korea Automobile Industry Association, said, "Demand for zero- and low-emission vehicles is influenced not by mandatory sales but by vehicle price, charging convenience, and charging costs, while supply, especially domestic supply, depends not only on profitability but also on the development and production transition speed of related parts by parts suppliers. The government needs to develop policies considering these factors." He emphasized, "Considering that market conditions favor imported vehicles over domestic ones, potentially causing difficulties for our industrial ecosystem, policies for electric-powered vehicle supply should shift from regulations to incentive-based approaches."

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