"US California to Mandate 100% Eco-Friendly Vehicles by 2035... K-Battery Expected to Benefit"

The 'Korea Nara Market Expo 2022' was held on the 13th at KINTEX in Goyang, Gyeonggi Province, where an official is demonstrating electric vehicle charging. The photo and article content are unrelated. Photo by Moon Honam munonam@

[Asia Economy Reporter Myunghwan Lee] As the state of California in the United States announced its plan to achieve a 100% mandatory sales ratio for eco-friendly vehicles by 2035, securities analysts have predicted that domestic battery companies will benefit from this.

According to Eugene Investment & Securities on the 16th, the California authorities have significantly strengthened the mandatory sales ratio standards for eco-friendly vehicles. This measure follows the Biden administration's revival of California's fuel efficiency regulations and mandatory sales system in March. Accordingly, automakers in California must ensure that 35% of new car sales are electric or hydrogen vehicles by 2026. This ratio must increase to 51% by 2028 and 68% by 2030. By 2035, the mandatory sales ratio for electric and hydrogen vehicles must reach 100%.

Eugene Investment & Securities evaluates California as the heart of the U.S. electric vehicle market. California has fostered the market by introducing the mandatory sales system, and currently, 15 states follow California's regulations. The significant increase in the mandatory ratio and the confirmation of a 100% sales ratio by 2035 have greatly enhanced the growth potential of not only California but also the entire U.S. electric vehicle market.

This measure is expected to significantly increase electric vehicle sales in the U.S. Eugene Investment & Securities estimates that U.S. electric vehicle sales will grow from 600,000 units in 2021 to 3.28 million units in 2025, and further to 10.26 million units by 2030. The electric vehicle sales ratio in the U.S. is expected to slightly exceed half, reaching 52% by 2030. It is judged that the Biden administration's eco-friendly vehicle distribution target of 50% will be sufficiently achieved, and the strengthened policy in California has increased the likelihood of achieving this goal.

Following Europe, the U.S. market is also confirmed to become a key growth base for domestic battery companies. It is analyzed that the U.S. electric vehicle market will see an average annual sales increase of 53% until 2025 due to the revival of federal fuel efficiency regulations and the strengthening of California's mandatory sales ratio. Researcher Byunghwa Han of Eugene Investment & Securities noted, "Until now, the U.S. electric vehicle market had low relevance to domestic battery companies due to Tesla's overwhelming market share," adding, "Production of major electric vehicle models by U.S. automakers that have established joint ventures with domestic battery companies will begin in earnest this year."

Researcher Han further stated, "Stock prices of domestic battery-related companies are attempting to recover from a downward trend," and analyzed, "Although there are concerns about profit margin declines due to rising raw material prices, the momentum for increased demand for electric vehicle batteries is growing due to high oil prices, so the risks are limited." He also recommended "increasing the weighting of K-battery companies overall."

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