Electric Vehicle Adoption Rate Remains 'Minimal' Despite Expansion of Battlefield Operations

Despite efforts to reduce carbon emissions, major domestic companies expanding their automotive parts business have shown slow progress in converting company vehicles to zero-emission vehicles such as electric cars.

According to the zero-emission vehicle operation status disclosed by LG Innotek in its 2022-2023 Sustainability Report on the 14th, only 2 out of 103 vehicles are zero-emission vehicles. As part of its carbon neutrality activities, LG Innotek participates in the Korean-style Zero-Emission Vehicle Transition 100 (K-EV100) campaign led by the Ministry of Environment, pledging to convert all company-owned and leased vehicles to zero-emission vehicles by 2030. However, the adoption rate of zero-emission vehicles remains significantly low as the campaign is still in its early stages.

LG Innotek plans to expand the introduction of zero-emission vehicles to 11 units in 2023. Including plans to introduce 58 eco-friendly vehicles (excluding zero-emission vehicles) this year, the company aims to convert 67% of its entire fleet of company vehicles to zero-emission and eco-friendly vehicles. It has already expanded charging infrastructure by installing electric vehicle charging facilities equivalent to 2% of the parking spaces at its domestic business sites.

[Image source=Yonhap News]

Samsung Electro-Mechanics also stated in its Sustainability Report that it aims to convert 100% of its corporate vehicles to electric vehicles by 2030 and is promoting a phased replacement of vehicles with electric cars. However, as of last year, the electric vehicle conversion rate was only 1.4%. Out of a total of 138 vehicles in operation, only 2 are electric vehicles. Samsung Electro-Mechanics, which has not yet completed the electric vehicle usage environment, plans to build electric vehicle charging infrastructure in both internal and external parking lots at its domestic business sites.

Both LG Innotek and Samsung Electro-Mechanics are electronic component companies actively expanding their supply of automotive parts for electric vehicles this year. During the period of surging demand for IT devices and semiconductors, they grew by expanding production of high value-added core components used in electronic products. However, as demand for front-end industries (smartphones, TVs, PCs) has sharply declined recently, the need to change their business portfolios has increased, and they are shifting their focus to the automotive parts business to align with the rapidly growing electric vehicle and future vehicle markets.

In January this year, LG Innotek created an open booth at CES2023, a home appliance and IT exhibition held for the first time in Las Vegas, USA, where automotive companies concentrated their exhibition halls. Although LG Innotek had recorded losses in the automotive parts business for five consecutive years until last year, it succeeded in turning a profit in the first quarter of this year due to increased sales of battery management systems and communication modules for electric and autonomous vehicles. The annual profit of the automotive parts division is also expected this year.

Samsung Electro-Mechanics is strengthening its automotive parts business by rapidly increasing its market share in the automotive multilayer ceramic capacitor (MLCC) market, which is led by Japanese companies. Industry estimates suggest that the proportion of automotive parts in Samsung Electro-Mechanics’ MLCC sales rose from 15% at the end of last year to about 20% in the second quarter of this year. Sales of automotive MLCCs increased by more than 40% last year, and a similar growth rate is expected this year. With the expansion of its automotive parts business, Samsung Electro-Mechanics also joined Drive+, a consortium of automotive parts suppliers, this year.

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