[Electric Vehicle Idling in Korea] China Surges Ahead... Evoking a Global Battleground

Last Year, China's Electric Vehicle Exports Reached $8.6 Billion, Increasing More Than Fivefold in One Year
Foreign Automakers Expand Local Production Systems... Hyundai Motor and Kia Aim for a Rebound
Experts: "First Mover Opportunity Is Open, Develop Our Own Model"

[Asia Economy Reporter Choi Dae-yeol] While the Korean electric vehicle (EV) market is being held back by labor unions and various regulations, major global countries are identifying EVs as future growth engines and are actively investing. Among them, China is the most aggressive and combative in pouring money into the EV market. Until 2020, China was ranked 7th in EV exports and outside the top 10 in the overall passenger car market including internal combustion engines, but in the past five years, its EV export value has surged by an average of 200% annually, positioning it as a leader in major markets. Experts advise that since the leadership in future vehicles has shifted to EVs, the government should implement various incentives and investment policies such as attracting advanced overseas technologies and expanding exports.

"Seize the Center" China Becomes the Battleground for Electric Vehicles

According to the completed vehicle industry on the 29th, China's EV export value last year was $8.6 billion, more than five times that of the previous year. In terms of export value, China ranks third after Germany and Belgium, where high-priced EVs have a large share, but in terms of volume, it leads with 500,000 units, far ahead of the second-ranked country (Germany with 230,000 units). The increase in exports indicates that demand for Chinese-made EVs is growing worldwide.

The Chinese automotive market, once considered a "frog in a well," is rapidly changing thanks to EVs. With a domestic demand exceeding 20 million units annually and still significant growth potential, global automakers have entered early to target the local market, establishing a stable supply chain. Additionally, China has actively promoted EV adoption and production by designing subsidy policies favorable to domestic companies. An industry insider said, "Compared to traditional internal combustion engines, EVs have lower entry barriers, and 400 to 500 local companies directly produce and sell EVs in China," adding, "Top local makers such as Chery, Geely, and Changcheng actively export overseas based on the technology they have built from domestic demand."

China's largest private automobile company Geely

Foreign automakers have also expanded their local production systems. Tesla, the world's largest automaker, completed its Shanghai factory last year and is reportedly negotiating to build an additional facility to increase annual production capacity to 2 million units. Volkswagen, the second-largest EV maker, is also expanding its local factories to establish a production and sales system capable of 1 million units annually by the end of next year.

Hyundai Motor and Kia, whose local market shares plummeted after the THAAD (Terminal High Altitude Area Defense) controversy, are planning to rebound with EVs. They are producing locally tailored strategic models and are coordinating the launch of models applying their self-developed EV-exclusive platform, E-GMP. Since China is currently and is expected to remain the world's largest completed vehicle market, they believe they cannot afford to ignore it. The industry views Hyundai Motor Group's battery supply from China's CATL, the world's largest battery maker, as a move considering local EV production. Lee Ho-jung, a senior researcher at the Korea Automotive Technology Institute, explained, "Some Chinese brand EVs are technically on par with advanced countries," adding, "They have excellent product competitiveness, having survived the harsh consumer evaluations in the Chinese domestic market."

"Electric Vehicles Must Be First Movers"

Although South Korea has ranked around 5th globally in EV production scale following internal combustion engine vehicles, experts predict it will be difficult to maintain this level. This is due not only to the small domestic market but also to difficulties in securing labor flexibility because of strong labor unions, and the challenge of growing upstream industries such as vehicle parts together.

Last February, visitors are touring the Volkswagen exhibition hall at the Auto Show held in Shanghai.

Advanced countries such as the U.S. and Europe, as well as emerging countries, are making multifaceted efforts to establish production bases for EV factories and key components like batteries, but there is no significant movement in South Korea. The Korea Automobile Manufacturers Association explained, "Last year, the proportion of electric vehicle production was 13.6% in China, 9.3% in Spain, and 8.2% in South Korea, similar to the global average, but it is overly concentrated in some companies."

Professor Lee Ho-geun of Daeduk College advised, "With the current high-cost, low-efficiency structure, even companies with factories in Korea find it difficult to have the will to produce EVs," adding, "The government needs to create a business-friendly environment to induce domestic production."

Finding a compromise with labor unions is also urgent. In fact, Hyundai Motor and Kia spend several months negotiating labor input even after establishing EV production lines. Korea GM recently reorganized production processes for new models at its Bupyeong and Changwon plants but has not yet finalized plans to produce EVs domestically. SsangYong Motor's Korando e-Motion recently received pre-orders but reportedly closed early due to battery supply issues.

Jung Man-ki, chairman of the Korea Automobile Manufacturers Association, said, "Labor-management relations are difficult, and workforce restructuring is not easy depending on market conditions, so domestic automakers worry about switching to EVs only to bear costs and face difficulties." Professor Kim Pil-soo of Daelim University said, "If we were fast followers in internal combustion engines, the possibility of being first movers in EVs is still open," adding, "Since the leadership in future vehicles has shifted to EVs, we need to develop our own model that can grow the entire EV ecosystem, including parts industries and charging infrastructure."

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