[Car Talk Forest] Legitimacy or Interests... Car Trade, Rules Determine Outcomes

Mandatory BMS Items for Electric Vehicle Fires, Trade Dispute Concerns
US Inflation Reduction Act Creates Favorable Conditions for Domestic Makers

[Image source=Yonhap News]

[Asia Economy Reporter Choi Dae-yeol] The cause of electric vehicle fires has not yet been clearly identified. It is only known that a thermal runaway phenomenon caused by a chemical reaction inside the battery cell occurs for some reason, leading to a fire. The cause of the Kona electric vehicle fire that erupted three years ago remains unknown. According to officials in charge of the investigation, even when attempting to deliberately ignite a fire, it does not catch easily, making it difficult to determine the cause.

Reports from local media have revealed that electric vehicles from China’s BYD, which competes neck and neck with Tesla as the world’s number one eco-friendly car maker, have recently caught fire one after another. This shows that even lithium iron phosphate (LFP) batteries, known to be relatively safer, are not free from fire risks. Although the frequency of electric vehicle fires is lower compared to internal combustion engines, customer anxiety inevitably grows. This is because once a fire starts, it is difficult to extinguish, and fires can occur even when the vehicle is not in motion.

Among the measures to prevent electric vehicle fires, the most widely used method so far is through the Battery Management System (BMS). This involves accepting a reduced driving range by charging only about 30 to 40% less of the battery capacity. Additionally, the BMS can provide alerts such as warning sounds when the internal battery temperature rises above a certain level, activate self-cooling systems, and store data upon detecting abnormal signs to identify the cause of fire.

The problem is that enforcing this is difficult. Technically it is not hard, but mandating this to manufacturers by automotive regulatory authorities could act as a non-tariff barrier. If overseas electric vehicle makers perceive such obligations as factors making it difficult to sell cars in Korea, it could lead to trade disputes.

The electric pickup truck R1T from the American startup Rivian was displayed in New York Times Square during its initial public offering in October last year.

Let’s look at the United States’ Inflation Reduction Act, which was established to “overcome the climate crisis and reduce deficits.” This law provides tax credits only for electric vehicles finally assembled in North America, causing many electric vehicles from Korea and Europe to become about 10 million won more expensive immediately. Since electric vehicle sales inevitably depend on subsidies or tax benefits due to their high prices, the Korean government and political circles loudly protest that this violates the principle of free trade, which does not discriminate based on origin, but their voices ring hollow. The World Trade Organization (WTO) system, launched in the late 1990s, is currently facing frequent questions about its role as China exploits benefits and the U.S. returns to protectionism.

If there were a genuine will to solve climate issues, American consumers should be able to enjoy the opportunity to buy high-quality electric vehicles cheaply regardless of origin, and the U.S. administration and legislature are surely aware of this. The point is that policy power has deeply intervened to enrich the U.S. electric vehicle and battery ecosystem.

U.S. President Joe Biden issued an executive order early last year upon taking office to investigate supply chains for certain items such as semiconductors, batteries, and pharmaceuticals. The conclusion of the investigation was that the high dependence on China in these foundational industries could pose a security threat. The industry also believes that there is an underlying intention to regain leadership in the automotive industry, which the U.S. had held since the early 20th century.

When discussing international trade norms including FTAs, automobiles are an important subject because market entry and sales are greatly influenced by regulations. It is difficult to oppose strict standards such as safety or environmental criteria. However, as mentioned earlier, sometimes profit or national interests take precedence over justifications or universal human values. This is why creating rules is more important than merely following them.

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