Acceleration Expected in Transition to Future Automotive Era Beyond Internal Combustion Engines

The transition from internal combustion engine vehicles to the era of future cars is expected to accelerate.

Yang Hyang-ja, a member of the National Assembly (Korea's Hope Party, Gwangju Seo-gu Eul), announced on the 8th that the "Special Act on Promoting the Transition and Fostering the Ecosystem of the Future Automobile Parts Industry" (hereinafter referred to as the Future Car Special Act) has been finally passed by the plenary session of the National Assembly.

Assemblywoman Yang first introduced the Future Car Special Act on June 20, 2021, which includes support for the transition of future car parts companies and the training of specialized personnel for future cars.

National Assembly Member Yang Hyang-ja.

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According to the Korea Automotive Technology Institute, out of the approximately 30,000 parts used in internal combustion engine vehicles, about 11,000 parts and 6,900 engine parts are expected to disappear. From 2025, the sales of domestic parts companies exclusively supplying internal combustion engine vehicles are estimated to decrease by more than 10%.

However, only 18% of domestic parts companies produce parts related to future cars such as electric vehicles. Additionally, 7,416 companies, accounting for 73% of existing internal combustion engine parts companies, have not even established plans to respond to future cars.

Assemblywoman Yang pointed out during the recent national audit and the full meeting of the Special Committee on Budget and Accounts that among the 7,416 companies struggling to establish future car transition plans, only 209 companies, or 2.8% over five years, have received business transition support from the Ministry of Trade, Industry and Energy and the Ministry of SMEs and Startups. She has also continuously demanded a significant increase in the budget related to the passage of the Future Car Special Act.

The newly passed Future Car Special Act includes provisions for ▲establishing strategies to revitalize the future car parts industry ▲promoting technology development and commercialization of future car parts ▲supporting the future car parts industry ▲training specialized technical personnel for future cars ▲designating specialized complexes for the future car parts industry.

Assemblywoman Yang said, "As soon as the 21st National Assembly convened, I took the lead in proposing the Future Car Special Act and have been earnestly working for four years to pass it. Finally, the bill has passed the plenary session, marking a turning point for South Korea to enter the ranks of leading future car nations. I am deeply moved."

She added, "The golden time for the transition to future cars is passing. The government must establish a grand plan and sufficiently allocate the budget to enable small internal combustion engine auto parts companies to transition into future car companies."

She further stated, "Just as we successfully fulfilled the campaign promise of attracting a 'future car cluster' in the last general election, our next goal is to enter the ranks of leading future car nations, and we will actively support our automotive ecosystem to achieve this."

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