The development of environmentally friendly vehicles is a core part of the so called Fourth Industrial Revolution and the electric car in particular, has become a leading contributor to growth in this industry. However, progress in this research and development field has been slower in Korea than in any other leading car manufacturing nation in the world.
There are many advantages to using electric vehicles. For instance, because they run on electricity instead of fossil fuels, they don’t cause any direct harm to the environment in terms of air and noise pollution. In addition, if people were to recharge their vehicles overnight, it is estimated the cost per month to operate the car would be about 30,000won, which is vastly cheaper than running a car that uses fossil fuels.
Electric vehicles were not always a success. Manufacturers had many trial and error investments, so it has taken the industry a long time to get where it is today. Many first efforts were shelved because of battery life problems. However, as time passed, the technology improved and the battery power output increased dramatically. By 2010, the USA became known as the center for electric vehicles as market sales grew by 171.5%, according to the International Energy Agency (IEA).
The trend continued to grow with 2014 sales in the USA hitting 260 million cars and in 2015 that number rising to 413 million. This included Electric Vehicles (EV) and Plug-in Hybrid Electric Vehicles (PHEV)’s whose sales volume rose by 22.77% in one year. Even more remarkable is that these numbers showed an increase in 2015, despite their being a 40% drop in the international oil price during that period, proving that market demand for electric vehicles exists, irrespective of the price of oil.
To learn more about the electric automobile, the DKH interviewed Lee Jae-hyouk, a researcher at SNE Research. From this interview we were able to better understand present market conditions, the reasons why the electric car is the most advanced car at this point and how nations have worked to invigorate the electric car market. Lee believes the car manufacturing industry will continue to focus predominately on the development of the Battery Electric Vehicle (BEV). He said the October 2016 Paris Motor Show featured BEVs from mainstream vehicle manufacturers such as Audi, Volkswagen, Porsche. Therefore, with the main car manufacturers shifting their focus on this new product development, it is reasonable to assume that BEV’s will continue to account for 60 percent of total industry output.
There are 4 kinds of electric cars on the market today. They include the Electric Vehicle (EV), Battery Electric Vehicle (BEV), the Hybrid Electric Vehicle (HEV), and Plug in Hybrid Electric Vehicles (PHEVs) Each vehicle has its strengths and each technology is associated with different countries. For instance, the US company Chevrolet produces Bolt and Japan’s environmentally friendly vehicle is the Prius made by Toyota. Both are strong examples of PHEVs, however Japan’s Nissan also manufactures the LEAF, a reliable and popular BEV. In the meantime, China has been focusing on HEVs, which have seen the highest sales volume in the world. They sold 54 million HEVs in 2016, a 59% increase from the previous year. Many experts predict the volume will be closer to 76 million in 2017, and 123 million by 2020, bringing the global total to about 500 million HEVs on the market. As a result of this growth in HEV production, China’s battery market has also become the largest in the world. The Benchmark Mineral Intelligence Research Institute said China’s li-ion battery production will make up 60% of the world market. However, many experts don’t believe China has technology that surpasses that of the USA or Japan, despite having the top selling BYD (what is this now?) . China’s environmentally friendly vehicles sold more than Tesla in USA and Nissan in Japan.
So why is the demand higher in China than it is in the rest of the world? The reasons, we learned, are two-fold; price and a policy of government support. Most Chinese electric cars are sold for less than 10 million won, making it very affordable for buyers. Manufacturers can afford to produce these vehicles at low cost because of a government enforced “Electric Car Support Policy’ that was first introduced in 2009 to help combat the growing problem of air pollution. They introduced subsidies and reduced taxes on all environmentally friendly vehicles. The policy hoped to result in 500 million electric cars, including 20 million buses, and 30 million taxis, to be on the roads by 2020. As a result, China now has the highest number of electric cars on the roads in the world.
As we have seen, China, Europe, and North America have seen their markets grow faster than other countries. China, in particular, has had a fertile market for electric vehicles in part due to their price support system and market subsidies. In response, parts of Europe and some states in the US are now considering trial plans for a total ban on selling gasoline based vehicles (ICE) which will further spurn growth in demand for EVs in their countries.
With all this interest in EVs globally, why has the Korean market for EVs failed to keep up? Mr. Lee suggested the Korean electric car market is lagging behind because the government has failed to develop a policy for growing domestic demand for EVs, and the industry has also failed to promote domestic market demand. However, Lee argues the biggest reason Korea has not kept pace with other countries, was because of its late entry into the market and lack of early support from the government. Furthermore, customers worry about the lack of infrastructure support for electric cars with public charging stations few and far between. This has led the electric car to remain unpopular with the public.
Korea may be a leader in the production of semiconductors, displays, and batteries, but China is outclassing us in the development and use of EVs. Environmentally friendly vehicles will soon be used for commercial vehicles including buses, electric airplanes, trucks, express carts, and taxi sedans. The electric car will be at the center of the whole industry and can be seen already developing at global vehicle exhibitions. With this rise in popularity ahead of us, Korea needs to do more to capitalize on this emerging technological market, by at least, keeping place with other market leaders. We have the talent within, so why not put it to use in the development of this rapidly emerging environmentally friendly industry .
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