Europe Moves to Regulate Electric Vehicle Speeds... Korean Automakers Seek Export Breakthroughs

EU Delays Introduction of European Emission Standards 'Euro 7'
Passenger Cars Postponed 5 Years, Commercial Vehicles 4 Years Compared to Draft
Some Regulations Strengthened on Tire Particulate Matter and EV Battery Durability
EU Effectively Extends Era of Internal Combustion Engine Vehicles in Europe
Hyundai and Kia Face Inevitable Revisions to European Electrification Strategies
Need for Developing Internal Combustion Engines to Comply with 'Euro 7'

The European Union is delaying the introduction schedule of the new exhaust emission regulation 'Euro 7' from its original plan. Last year, Europe announced a swift transition to the electric vehicle era through stringent internal combustion engine regulations. However, European automakers faced a practical barrier as they complained about the enormous burden of facility and research and development (R&D) investments. As Europe, one of the global big three eco-friendly car markets, begins to adjust the pace of its electric vehicle transition, the calculations of Korean automakers have also become complicated. There is a high possibility that the strategy of minimizing Euro 7 vehicle production while targeting Europe with electric vehicles will need partial revision.

On the 12th (local time), the European Parliament's Environment Committee announced that it passed the amendment bill for the new automobile exhaust emission regulation 'Euro 7' with a 61% approval rate. The amendment is seen as a step back from the draft proposed by the EU Commission last November, including postponing the introduction schedule. This bill will be submitted to the European Parliament plenary session in November, followed by negotiations with the EU Council before final confirmation. Typically, the EU legislative process involves the Commission proposing, the Parliament providing consultation, and the Council making the final deliberation and decision.

Voting scene at the European Parliament plenary session
[Photo by European Parliament website]

European Union Delays 'Euro 7' Introduction, Suggests Slowing Electric Vehicle Pace

The draft proposed by the EU Commission last November scheduled the implementation of Euro 7 for internal combustion engine passenger cars in 2025 and large commercial vehicles in 2027. However, the recent parliamentary amendment postponed the introduction to 2030 for passenger cars and 2031 for large commercial vehicles.

However, regulations on particulate matter generated from tires and brake pads, which are considered major sources of fine dust, have been strengthened. Additionally, some electric vehicle-related standards have been raised compared to the Commission's draft, such as mandating that electric vehicle battery performance must be maintained at 75% even after 10 years.

Europe has been applying automobile exhaust emission regulations since 1992. Starting with 'Euro 1,' it has progressively reduced the amount of environmental pollutants emitted. Currently, Euro 6, introduced in 2014, applies to newly released internal combustion engine vehicles, and Euro 7 is planned for future implementation.

With the introduction of Euro 7, nitrogen oxide emissions (for large diesel vehicles) must be reduced from 0.4g per km to 0.09g. Fine dust limits will decrease from 0.01g to 0.008g, and carbon monoxide allowances will drop significantly from 1.5g to 0.2g.

Euro 7 reflects a commitment to preventing environmental pollution not only from internal combustion engines but also from electric vehicles. Until Euro 6, only exhaust gases emitted through the engine were considered environmental pollutants. However, starting with Euro 7, particulate matter from tires and environmental pollution caused by waste batteries will also be regulated.

Automakers say that even the currently applied Euro 6 standards are difficult to meet due to their stringent criteria. Therefore, Euro 7, which is a further strengthened standard, was regarded as the final regulation level for internal combustion engines. It is easier to produce electric vehicles than to manufacture internal combustion engine vehicles that comply with Euro 7 standards. The introduction of Euro 7 signifies the entry into an era of electric vehicles with zero exhaust emissions.

Revision of Europe's Electric Vehicle Goals Inevitable... How Korean Automakers Respond

Europe has been at the forefront of promoting electric vehicle adoption by strengthening environmental regulations. It was expected that Europe's technological superiority would continue not only in the internal combustion engine era but also in the electric vehicle era, as many automotive powerhouses are located there. However, Europe's calculations were off. In electric vehicle production and development, leadership has shifted to American and Chinese companies. As of last year, the top global electric vehicle producers were China's BYD, followed by the U.S.'s Tesla, and third was Europe's Volkswagen Group.

Consequently, executives from eight traditional automotive powerhouses such as Italy, France, and the Czech Republic have argued for delaying Europe's environmental regulations. Increasing electric vehicle adoption without securing hegemony in the electric vehicle market could provide opportunities for brands outside the region. The European Automobile Manufacturers Association (ACEA), representing the European automotive industry, claimed that the development costs required to comply with Euro 7 are excessive compared to the greenhouse gas reduction benefits. They argued that redirecting these costs toward electric vehicle development investments would yield greater environmental improvements.

Kia's electric vehicle lineup showcased at the '2023 Kia EV Day' held on the 12th [Photo by Kia]

In this situation, the calculations of Korean automakers have also become complicated. According to the industry, Hyundai Motor Company and Kia are practically not developing internal combustion engines to comply with Euro 7. Instead, with a swift electrification strategy, Hyundai plans to have 71% of its total sales volume in the European market by 2030 be electric vehicles, and Kia aims for 74%.

However, as the European Union hints at extending the sales period for internal combustion engine vehicles that meet Euro 6 standards, Hyundai and Kia's European market strategies seem inevitably subject to revision. Experts advise that to respond nimbly to Europe's policy changes, Hyundai and Kia should pursue various strategic options, including internal combustion engines, hybrids, electric vehicles, and hydrogen fuel cell vehicles.

Professor Lee Ho-geun of the Future Automotive Department at Daeduk University said, "If the lifespan of internal combustion engines is extended due to changes in European policies, we will also need to develop next-generation internal combustion engines." He explained, "South Korea cannot lead global policies but must follow policy changes in major markets such as the U.S., Europe, and China. Therefore, our companies need to keep multiple paths open and prepare for various scenarios."

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