"Automotive Industry Labor and Management Unite in Calling for Slower Electric Vehicle Adoption"

If NDC increases by 40%, 4.5 million cumulative electric vehicles needed by 2030... Production capacity exceeded
Rapid adoption may threaten internal combustion engine ecosystem and jobs

[Asia Economy Reporter Yu Je-hoon] As the government is pushing for a significant increase in the national greenhouse gas reduction target (NDC) for 2030, labor and management in the domestic complete vehicle industry have voiced a unified opinion that the pace of electric vehicle adoption needs to be controlled to protect the automotive industry ecosystem. This concern arises from the characteristics of electric vehicles, which require fewer parts and labor hours, with fears that excessively high adoption targets could threaten not only mid-sized complete vehicle companies but also parts suppliers and workers.

The Korea Automobile Manufacturers Association (KAMA), Korea Automobile Industry Cooperative, and the Federation of Korean Metal Workers' Unions, three organizations, announced on the 12th that they submitted these opinions to the 2050 Carbon Neutrality Committee regarding the push to raise the 2030 NDC. Currently, the Carbon Neutrality Committee is planning to raise the 2030 NDC from the existing 26.3% reduction compared to 2018 to over 40%. If the reduction target is raised to 40%, the cumulative number of eco-friendly vehicles adopted by 2030 will rapidly expand from 3.64 million to over 4.5 million units.

The problem is that the domestic complete vehicle industry's production capacity does not meet this target. According to these three organizations, the domestic automotive industry's cumulative production capacity for eco-friendly vehicles by 2030 is within 3 million units, and if a higher target is set, a large-scale increase in imports of eco-friendly vehicles such as electric vehicles will be inevitable.

For example, if the cumulative adoption target for 2030 is expanded to 4.5 to 5.5 million units, 720,000 to 1 million electric vehicles must be adopted in 2030 alone. However, the volume that can be produced and sold domestically is expected to be about 400,000 units, meaning that 320,000 to 600,000 units will have to be covered by imports. In particular, companies like Korea GM and Renault Samsung Motors have no plans to produce electric vehicles by 2025, making it inevitable that all electric vehicles in 2030 will be imported. This will lead to a contraction in internal combustion engine vehicle production, causing management deterioration for parts suppliers and employment insecurity for workers.

Accordingly, these three organizations first requested that a reasonable zero-emission vehicle adoption target below 4.5 million units be presented. Since even the existing adoption target (3.85 million units) is expected to result in about 3 trillion won in industrial production and about 1 trillion won in value-added losses as well as employment reductions, they emphasized that a rational target level must be set. They also proposed support measures such as easing conditions for employment retention subsidies for parts companies, expanding employment retention subsidies and unemployment benefits for parts company workers, vocational education and training to respond to job transitions, and demand surveys for job transfers and career changes, given that the number of parts and labor hours required for electric vehicles is significantly less than for internal combustion vehicles, making a reduction in labor demand inevitable.

Furthermore, the three organizations demanded support for parts companies' future vehicle technology development and the creation of conditions to expand consumer demand to secure price competitiveness for electric vehicles.

Jung Man-ki, chairman of KAMA, said, "The fact that user organizations and labor unions, which have never spoken with one voice before, have done so now means the issue is that serious." He added, "The Carbon Neutrality Committee should set reasonable adoption targets and devise support measures, considering that rapid target setting could cause the collapse of parts suppliers and large-scale unemployment of workers."

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