"Era of Major Transformation in the Automotive Industry... Government Must Foster Parts Companies and Address Job Issues (Comprehensive)"

Demand to Promote Transition to Future Car-Centered Industrial Ecosystem
Electric Vehicles Reduce Workers by 20-30% and Parts by One-Third Compared to Internal Combustion Engine Vehicles
"Government Should Expand Financial Support, R&D, and Job Training for Eco-Friendly Vehicle Companies"

[Gwangju= Asia Economy Reporter Ki-min Lee] Amid the rapid transformation of the global automotive industry ecosystem from internal combustion engine vehicles to electric vehicles, concerns have been raised that the government's 'carbon neutrality' policy could instead cause industrial ecosystem disruption and job losses in the automotive sector. To prevent potential future problems and lead the electric vehicle market, it is pointed out that the government must actively support related parts companies, job training, and career transition assistance.

The Korea Automotive Journalists Association held a symposium titled "Carbon Neutrality, the Future of the Automotive Industry" on the 18th at the Kim Dae-jung Convention Center Convention Hall in Gwangju, as a pre-event for the '2021 International Green Car Exhibition.'

On the day, Lee Min-woo, Director of the Automotive Division at the Ministry of Trade, Industry and Energy, presented on the topic "Future Vehicle Expansion and Market Preemption Strategy," stating, "It is necessary to accelerate the spread of electric and hydrogen vehicles through innovation in eco-friendly vehicle demand and supply, and to push forward the realization of carbon neutrality by 2050." He added, "A fair transition to an industry ecosystem centered on future vehicles is required, including nurturing 1,000 future vehicle parts companies."

In April, major countries such as the United States and the United Kingdom raised their Nationally Determined Contributions (NDC) at the Climate Summit, and Korea also finalized its 2050 carbon neutrality scenario and announced an NDC enhancement plan this month. Regarding Korea's NDC enhancement plan, Director Lee stated, "By 2030, we plan to distribute 4.5 million electric and hydrogen vehicles and 4 million hybrid vehicles, and aim to reduce carbon emissions by further increasing the biodiesel blending ratio in diesel for automobiles."

He also mentioned that to achieve this, the government has set goals such as achieving the world's number one eco-friendly vehicle adoption rate, completing legal systems and infrastructure by 2024, and commercializing fully autonomous driving by 2027. Furthermore, the share of future vehicle parts companies is expected to expand from the current 4% to over 20%.

However, the industry pointed out that the government should examine potential problems that the automotive and parts sectors may face due to the rapid changes in the automotive industry ecosystem and policies. Kim Yong-won, Executive Director of the Korea Automobile Manufacturers Association, who gave a presentation titled "The Impact of 2050 Carbon Neutrality and 2030 National Greenhouse Gas Reduction Target Enhancement on the Automotive Industry," warned that the transition to electric vehicles could lead to job losses in automotive manufacturing and parts sectors, urging proactive measures. Kim emphasized, "Electric vehicles require less labor compared to internal combustion engines, reducing worker hours by 20-30% and parts by about one-third, making employment reduction inevitable. If electric vehicles account for 33% by 2030, 10% of companies could disappear, and approximately 35,000 jobs could be lost, necessitating active response."

Kim particularly noted that the employment issues could become severe for the three foreign-affiliated companies?Renault Samsung Motors, SsangYong Motor, and Korea GM?that are slower in electrification transition compared to Hyundai Motor and Kia, as well as their supplying partners, which could lead to a reduction in domestic production bases. He added that financial and R&D support expansion, creating conditions to increase consumer demand, job training and retraining, and government support for career transitions should be strengthened in response to the eco-friendly vehicle transition.

Following the presentations, in the panel discussion, Kim Tae-nyeon, Director of the Future Mobility Research Institute, stated, "To achieve carbon neutrality by 2050, automotive companies must increase investment in the early development and commercialization of next-generation batteries to improve profitability." He also emphasized, "At the government level, mid- to long-term funding plans for future vehicle support should be prepared, and efforts should focus on dramatically improving consumer convenience, such as expanding charging infrastructure to promote electric vehicle adoption."

In line with the 2021 Green Car Exhibition, the Korea Automotive Journalists Association opened a special exhibition titled "Green Cars that Shined in 2021" from the 18th to the 20th, showcasing major eco-friendly vehicles released this year, including Hyundai Motor's Ioniq 5, Kia EV6, Genesis GV60, and Mercedes-Benz The New EQA.

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