Abstract
The Korean government has stimulated R&D activities of the electric vehicle (EV) industry and promoted commercialization of EVs. Korea’s EV industry developed rapidly. The industrial policy to promote the EV industry provides implications to the automobile producers. First, producers not developing EV technologies may lag behind in the market. Second, it is important to improve the efficiency of their R&D expenditures. Third, it may be effective for the less advanced EV producers to cooperate with foreign producers. Fourth, the EV producers are needed to cooperate with the rechargeable battery producers. Fifth, success of the EV industry will depend on the probability of reducing the production cost. Sixth, the government should prepare R&D support measures targeting promotion of SMEs in the EV industry. Seventh, the government wishing to promote the EV industry needs to define the responsibility of each Ministry and establish a system resolving conflicts between the Ministries efficiently.
Highlights
Automobile industry has attracted a particular attention from policymakers due to its linkage to various other industries in addition to its role in employment generation, technological development and contribution to national income
The current paper aims to overview the development of Korea’s Electric Vehicle (EV) industry and to explain the government policies promoting it
In 2017, Korea recorded trade surplus as much as US$26 million in EV trade. This was possible as internationally competitive Korean EVs, such as Hyundai Ioniq Electrics and Kia Soul EV, were actively exported to the international market, while weak demand in domestic market led to decrease in imports (Ministry of Trade, Industry and Energy (MOTIE), 2017: 223)
Summary
Automobile industry has attracted a particular attention from policymakers due to its linkage to various other industries in addition to its role in employment generation, technological development and contribution to national income. Major producers of automobiles are focusing on the increasing production of eco-friendly vehicles in the process of overcoming the global warming phenomenon. Korea’s energy mix is dominated by fossil fuel, with more than 20 percent of fossil energy used in transportation sector, and has the lowest share of renewable energies among the OECD members To alleviate such issues, the Korean government established policies to promote green growth and aimed to reduce greenhouse gas emissions by 37 percent or below by 2030 (Hwang, 2015; OECD, 2017: 14-15). Rechargeable battery is critical in the production of EVs and Korea has been one of the global leaders in the rechargeable battery production, which may enable Korea to become the leading producer of EVs. The current paper aims to overview the development of Korea’s EV industry and to explain the government policies promoting it. Journal of Technology Management & Innovation © Universidad Alberto Hurtado, Facultad de Economía y Negocios
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