The global popularity of South Korea’s K-pop superstars has given the nation a massive boost in copyright exports, reaching a record level in 2019. It’s
Achieving South Korea’s Autonomous, Electric, and Flying Car Dreams
By Songyee Jung, Commerce and Energy Researcher
- In October 2019, the South Korean government issued Future Car Industry National Vision 2030, which lays out the government’s plans to accelerate the adoption of new technologies in the automobile industry, including electric vehicles, autonomous vehicles, hydrogen-powered vehicles, and flying automobiles
- The plan is designed to increase the domestic sale of electric and hydrogen vehicles from 2.5% in 2019 to 33% of Korea’s new vehicle sales by 2030, and fully commercialize self-driving vehicles by 2027, three years ahead of its original plan.
- The Ministry of Trade Industry, and Energy (MOTIE) and the Ministry of Land, Infrastructure, and Transpiration (MOLIT) jointly identified three industry development strategies for targeting the global auto market using low emission vehicles, which aims to achieve 10% of global market share.
The three proposed roadmap strategies are as follows:
- First, facilitate eco-friendly technology in the domestic market and target the global market later.
- Second, become the world’s first country to complete the infrastructure necessary for autonomous vehicles by 2024.
- Third, develop an ecosystem catering to future vehicles, with private sector support totaling KRW 60 trillion (USD $50 billion) over the next decade.
The auto industry is one of the most important industries in Korea, creating jobs and helping to spur an export-dependent economy. However, in recent years the Korean auto industry has slid to seventh in global rankings, and the national economy has struggled accordingly thanks in part to a global economic slowdown and rising trade tensions. The Central Bank of Korea predicts that South Korea is unlikely to reach 2.2% growth this year.
To help counteract this, the Moon administration has announced a strategy for future automobile production in Korea, which calls for increasing investments in infrastructure as well as encouraging the development and adoption of advanced automobile technologies. These technologies, including electric vehicles (EVs), autonomous vehicles (AVs), hydrogen-powered vehicles and flying cars, will place the Korean auto industry at the forefront of the global industry and could be a shot of adrenalin to Korea’s economic recovery. President Moon Jae-in said on Oct 15, 2019 “Our goal is to become the leading country for future cars by 2030.”
The future car industry is both an opportunity and a risk for Korea. The EV market is growing at a whirlwind speed. According to the International Energy Agency, growth is well above 50% per year. Given that Korea’s conventional automotive industry is highly developed and has large production capacity, increasing investments in the future auto industry is a great opportunity for growth that is both profitable and rapid. However, EVs, AVs hydrogen vehicles, and flying cars are an untested market in Korea, which means it is not guaranteed to succeed.
Despite the odds, the Korean government is committed to investing in new domestic technologies. The government’s plans include leading international cooperation in the hydrogen economy by initiating international standards on hydrogen vehicle parts and technologies, like hydrogen station safety technology, hydrogen production technology, and hydrogen commercial vehicle standards. Currently, none of these technologies have recognized international standards. The willingness of the government and industry to invest heavily in these technologies will be an important step towards finding success.
The government’s plan includes preparing legal and institutional frameworks, increasing government incentives and spending and building infrastructure and charging stations, which would be coupled with private sector investment. The government plans to set up a route system and safety rules for personal air vehicles by 2023, to start practical use from 2025, install 15,000 rapid chargers for EVs by 2025, and 660 hydrogen fueling stations by 2030. In addition, the government targets implementing regulations for autonomous vehicles by 2024 to allow them to operate on local roads and the full commercialization of fully autonomous vehicles by 2027. Ultimately, the plan is to increase the domestic sales of electric and hydrogen vehicles to make up 33% of Korea’s new vehicle sales by 2030 and achieve a 10% global market share.
“Along with preparation of the relevant legal and institutional frameworks, we will have fully completed four key infrastructure projects by 2024: wireless communication networks between cars and roads, detailed 3D mapping, and an integrated traffic control system and road signs,” President Moon said, while also pledging to strengthen security. “Korean companies plan to invest KRW 60 trillion ($50 billion) in the future car industry over the next decade and secure key technologies that will lead the world.” The president added, “The government will also invest KRW 2.2 trillion ($2 billion) to develop and demonstrate components and materials of future vehicles to support corporate innovation.”
Overall, the government expects this plan will reduce traffic accident deaths by 75%, road traffic by 30%, greenhouse gas emissions by 30%, and fine dust by 30%. This ambitious approach is also a great opportunity to grow innovation in technology, increase competitiveness, and boost the economy.
The government does not plan to do the work alone. They are partnering with the private sector, which is making its own investments alongside. Hyundai Motor Group plans to invest KRW 41 trillion (USD $35 billion) in autonomous vehicles by 2025 and plans to have a line-up of 23 kinds of EVs by 2025. These commitments show Hyundai’s intention to be a leader in the high-stakes race to build mass-market EVs and AVs.
Like many countries, Korea is reforming incentive programs to limit public expenditure, without diminishing the attractiveness of EVs, AVs and hydrogen vehicles. However, South Korea’s approach is slightly different compared to other countries considering how heavily it relies on the private sector investments, which could be seen as the loss of its leverage in making decisions. Yet, government payments have limitations of their own and cannot rise alone, and the government finds utilizing the private sector investment is an opportunity to create jobs and innovation.
The report articulates the government’s plans to increase domestic production of core materials for EVs and HVs from 50% to 80%, which will decrease its dependence on imports and provide greater economic security. Additionally, the government seeks to increase partnerships with global automakers like GM and Renault through joint technology development, and export auto parts custom made to their finished products, making South Korea a global hub of future vehicle production.
Songyee Jung is a Commerce and Energy Researcher at the Embassy of the Republic of Korea.