"Will the 'European Version of the Inflation Reduction Act' Be Introduced? ... 'Strong Industrial Protection Policy Needed'"

European Transport Environment Federation Publishes Related Report
"Lack of Regulatory Incentives Increases China's Market Share"
Calls for Similar Policies to Inflation Reduction Act

An automobile factory located in Colombia

[Asia Economy Reporter Kiho Sung] In the European Union (EU), there have been calls for policies similar to the United States' Inflation Reduction Act (IRA) to counter electric vehicles (EVs) from China and the US. Although aimed at curbing Chinese EVs, there is concern that a 'European version of the Inflation Reduction Act' could emerge following the US, necessitating careful response.

According to local European media on the 23rd, the EU non-governmental organization (NGO) 'Transport & Environment (T&E)' published a report this month advocating for policy improvements such as differentiated subsidies. The report warned, "If EU automakers fail to expand EV supply, foreign companies could dominate most of the European mass market." T&E, headquartered in Brussels, Belgium, is a nonprofit organization whose reports are known to significantly influence policy decisions in the European Parliament (EP).

The report stated, "Chinese automakers have begun to establish a solid foothold in the European market, accounting for 5% of all EVs sold up to the first half of this year," and "Based on current trends, Chinese EVs are expected to hold a 9-18% market share in Europe by 2025," presenting their research findings.

According to the report, the market share of European-made EVs in Europe dropped from 13% in the second half of last year to 11% in the first half of this year. T&E pointed out, "The increase in EV sales in the US and China is due not to supply chain crises but to a lack of regulatory incentives."

Julia Poliscanova, Senior Director at T&E, said, "European automakers have failed to timely offer new EV models as quickly as Chinese and American manufacturers," and added, "If Europe wants to maintain competitiveness in the automotive industry, it must introduce strong industrial policies," recommending that the EU adopt policies similar to the US Inflation Reduction Act.

If Europe follows the US in introducing policies similar to the Inflation Reduction Act, damage to Korean companies will be inevitable. Popular models such as the EV6, recently praised by German automotive media, and the Ioniq 5 are produced domestically and exported.

Especially if the EU, following the US, adopts protectionist measures to secure leadership in the EV market, Korean automakers, which rely heavily on exports, are expected to face even greater challenges.

Europe is one of the major export destinations for Korean EVs. According to the European Automobile Manufacturers Association (ACEA), Hyundai Motor Company and Kia sold approximately 820,000 units in Europe from January to September this year, a 6.6% increase compared to the same period last year. Hyundai's sales rose 3.2% to 395,649 units, while Kia's increased 9.8% to 425,882 units. In contrast, total vehicle sales in Europe during the same period were about 8.27 million units, down 9.7% from the previous year.

Hyundai Motor Group's market share in Europe reached a record high of 9.9%, ranking third behind Volkswagen Group (24.5%) and Stellantis (18.9%). Notably, EV sales showed remarkable growth. Hyundai Motor Group sold a total of 109,626 EVs, a significant 21% increase compared to the same period last year. Key models included the Niro EV, Kona Electric, and EV6. Sales of Niro HEV and PHEV models reached 32,136 units, and EV models sold 30,866 units. During the same period, approximately 22,500 units of the EV6 were sold.

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