Ministry of Industry Increases Next Year's Automobile Budget by 30% to 470.9 Billion Won... Full-Scale Development of Future Cars

Car Budget, 361.5 Billion This Year → 470.9 Billion Next Year
415.7 Billion Invested in Future Car Technology R&D

[Sejong=Asia Economy Reporter Kwon Haeyoung] The government has increased next year's automobile budget by more than 30% to secure technological competitiveness in future vehicles such as electric, hydrogen, and autonomous cars.

The Ministry of Trade, Industry and Energy announced on the 14th that the next year's budget for the automobile sector was finalized at 470.9 billion won, an increase of 109.4 billion won from this year's 361.5 billion won, during the National Assembly approval process. This represents a 30.2% increase compared to last year.

The automobile sector budget has been on the rise every year: 205.3 billion won in 2019, 316.7 billion won last year, 361.5 billion won this year, and 470.9 billion won next year.

Looking at the detailed budget, 415.7 billion won, the majority of the total budget, was allocated for research and development (R&D) of future vehicle technologies, with 167.7 billion won assigned as new project funds. Through this, the government plans to intensively support the transition of internal combustion engine parts manufacturers to the future vehicle sector, popularization of electric and hydrogen vehicles, export strategies for hybrid vehicles, and development of new ICT convergence technologies and autonomous driving, fostering the future vehicle industry and technology development.

For electric vehicles, core technology development such as battery systems and driving efficiency improvement will continue to secure a single-charge driving range of 600 km by 2025. Specifically, 59.1 billion won and 7 billion won will be invested in nurturing a market-independent 3rd generation electric vehicle (xEV) industry and developing future-type automobile tuning parts technology, respectively, and 3 billion won was newly allocated for technology development to commercialize reuse of waste batteries for electric vehicles.

In the hydrogen vehicle sector, 9 billion won was newly allocated for core parts projects for hydrogen commercial vehicles, and 4.8 billion won for technology development of an open fuel cell system design verification platform to expand hydrogen mobility. The government will promote localization of core parts for hydrogen commercial vehicles and development of an open platform utilizing fuel cells in various mobility types.

Considering the reality that rapid transition to future vehicles is difficult for parts manufacturers, technology development to enhance parts performance for hybrid vehicles as export strategic models will also be supported. To this end, 3.7 billion won was newly allocated for advanced hybrid system technology development for sports utility vehicles (SUVs). In line with global environmental regulation strengthening, 22 billion won was newly allocated for environmental regulation response technology development projects (Green Car), and budgets were newly allocated or expanded for development and demonstration of core technologies for various eco-friendly personal mobility such as electric two-wheelers, electric kickboards, and mobility for the transportation disadvantaged, supporting business diversification of small and medium parts manufacturers.

In the autonomous vehicle sector, aiming for the world's first commercialization of full autonomous driving by 2027, 36.2 billion won was allocated for autonomous driving technology development innovation, 9.6 billion won for building a future vehicle digital convergence industry demonstration platform, and 7.8 billion won for autonomous shuttle infotainment technology development and service demonstration, actively promoting the advancement of autonomous driving technology. Additionally, 5.8 billion won was newly allocated for development of ultra-high difficulty autonomous driving mobility perception and prediction sensor technology, supporting ICT convergence attempts.

Regarding the vehicle semiconductor supply shortage, the government plans to stabilize the supply chain through development of core vehicle semiconductor technologies. For this, 4.8 billion won was newly allocated for demand-based high-reliability core automotive technology development.

A new 'Transition Response R&D' will also be launched to assist small and medium-sized parts manufacturers with insufficient capacity to prepare for future vehicles in business transformation.

Furthermore, to address manpower shortages in the automobile industry, the scale of manpower training support will be significantly expanded from 1,100 people this year to 2,300 people next year. A secondary compensation project for parts companies will be newly established, and a 2% interest subsidy will be provided on loans for future vehicle transition facility investment and mergers and acquisitions (M&A) funds. The government has allocated a total of 170 billion won as loan funds for this purpose next year.

The Ministry of Trade, Industry and Energy plans to announce project selections for industry-academia-research institutes in January next year regarding newly launched projects and to expedite budget execution in April.

An official from the ministry said, "Amid rapid changes in the automobile market, we will continue policy support such as securing core technologies and building infrastructure so that our companies can lead the future vehicle market."

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