Advancing EU Internal Combustion Engine Phase-Out... Auto Industry Faces Emergency

"Experts Say 'Need to Delay Timing Through Public-Private Efforts and International Cooperation'"

[Asia Economy Reporter Yu Je-hoon] The European Union (EU) has decided to effectively ban the sale of new internal combustion engine vehicles within the bloc starting in 2035, putting global automakers including Hyundai Motor Company and Kia on high alert. Although automakers are responding by setting carbon neutrality plans in line with environmental issues such as carbon reduction, the pace of carbon neutrality is accelerating faster than their plans. Even Hyundai Motor Company and Kia, which have pledged to sell only electrified models in major markets such as the United States, Europe, and China by 2040, now face the need to advance this timeline by five years.

According to industry sources on the 14th, the EU Commission announced the ‘Fit for 55’ policy package on the 12th (local time), which includes reducing carbon dioxide (CO2) emissions from the automotive industry by 100% compared to this year over the next 14 years. Essentially, this means banning the sale of internal combustion engine vehicles such as gasoline and diesel cars within the 27 EU member countries starting in 2035.

The EU, along with the United States and China, is classified as one of the world’s three largest automotive markets and accounted for 43.9% (about 1.29 million units) of the global electric vehicle market last year, making it the largest eco-friendly car market worldwide. As such, the EU’s carbon regulations are a major concern for the global automotive industry.

Hyundai Motor Company and Kia have also aggressively expanded sales of eco-friendly vehicles to comply with European carbon regulations. In fact, Hyundai Motor Company and Kia sold 151,693 eco-friendly vehicles in the European market in the first half of this year (January to June), an increase of 115.4% compared to the previous year. The launch of dedicated electric vehicle models such as the EV6 is also scheduled for the second half of the year.

The problem is that the EU’s carbon regulation policy is ‘outpacing’ Hyundai Motor Company’s electrification speed. Previously, Hyundai Motor Company announced a ‘2025 Strategy’ aiming to complete electrification of its entire lineup by 2040. The EU’s internal combustion engine vehicle regulation advances the discontinuation of internal combustion vehicle sales by about five years earlier than this plan.

A Hyundai Motor Company official stated, "Hyundai Motor Company and Kia are implementing the electrification strategies announced through the 2025 Strategy and Plan S as planned, and are reflecting and achieving environmental regulations of each country in their business plans. We will closely monitor the internal EU consultation and legislative process while simultaneously accelerating our electrification strategy."

However, industry insiders believe there are considerable obstacles before the EU’s carbon regulation can be legislated. An industry source commented, "This carbon policy is at a declarative level, and unlike Western Europe where the service sector is dominant, it will be difficult for Eastern European countries, which have a relatively high manufacturing sector, to accept it easily."

Nonetheless, since carbon regulations are bound to be strengthened in some form, experts agree that cooperation between the public and private sectors as well as international collaboration are necessary. Yoo Hwan-ik, Director of Corporate Policy at the Federation of Korean Industries, said, "Realistically, it will not be easy for this carbon policy to be legislated, but carbon regulations will inevitably continue to strengthen. Companies should focus on technology development, governments on infrastructure and system establishment, and on a macro level, international cooperation should be considered to slow down the radical carbon policies of Europe through dialogue with related countries."

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