[Reporter’s Notebook] "Energy Crisis" and the Phase-Out of Internal Combustion Engine Vehicles

[Asia Economy Reporter Kwon Haeyoung] "Soaring electricity prices could threaten Europe's transition to electric vehicles."

This is the main point of a recent concerned article published by the American economic daily, The Wall Street Journal (WSJ). Due to the Ukraine war causing energy prices to surge, electricity costs in Germany have surpassed the refueling costs of gasoline cars. The newspaper predicted that as the advantage of electric vehicles having relatively low maintenance costs disappears, demand for switching from internal combustion engine vehicles to electric vehicles may decrease. It also viewed this as a potential threat to Europe’s greenhouse gas reduction targets.

The phase-out of internal combustion engine vehicles and the transition to electric vehicles is one of the key tasks to achieve carbon neutrality. The Moon Jae-in administration’s Carbon Neutrality Committee considered phasing out domestic internal combustion engine vehicles by 2035, and although President Yoon Suk-yeol excluded this from the national agenda, it was included in his pre-election pledges for this reason. Korean automakers, including Hyundai Motor Company, are also accelerating their shift to eco-friendly vehicles with an eye on the future.

The direction is correct. The problem is the speed. According to demands from domestic and international environmental groups, it is still insufficient to set a fixed timeline for stopping the sale of internal combustion engine vehicles like Europe. As vehicle electrification increases the demand for electricity, power generation must also increase, but the previous government wasted five years on nuclear phase-out, and Korea Electric Power Corporation (KEPCO) is running deficits the more electricity it produces. Supporting numerous auto parts companies in transitioning to future vehicles to minimize employment shocks is also a challenge to be addressed.

Europe, worried about when Russia might shut off gas pipelines again, is also facing difficulties. The phase-out of internal combustion engine vehicles has sparked much controversy even within Europe. Before the European Union (EU) declared the phase-out of internal combustion engine vehicles by 2035, opposition surged in places like Stuttgart, the heart of Germany’s automotive industry. The recent energy crisis and soaring electricity prices in Europe have led to electric vehicle costs surpassing those of internal combustion engine vehicles. If internal combustion engine vehicle production had already been phased out, the damage would have fallen entirely on the people within the Eurozone.

Carbon neutrality without considering realistic conditions could impose unbearable burdens on our people and companies. While carbon neutrality is a path we must take, it should be made an opportunity that minimizes the burden on our industry and citizens through 'speed control' and provides a foundation for corporate growth.

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