The Korean government has developed next-generation vehicles with Korean industries relevant to automobiles since the
mid-1990s. Korea’s largest automobile company, Hyundai Motor, has developed gasoline hybrid vehicles since the mid-1990s. Ssangyong has also since developed diesel hybrid vehicles. But both companies experienced difficulties with commercialization due to a lack of consumer recognition for hybrid vehicles. Hyundai commercialized 50 hybrid buses for the 2002 World Cup and began selling LPi hybrid vehicles in 2009.
Long-term Development Plan of Green Car Industry
The Korean government has supported automakers in developing advanced vehicle technologies since the early 1990s through the G7 project (1992-2001). The government initiated the Next Generation Growth Engine Project from 2003 to 2007 and started the New Growth Engine Project in 2009 to develop eco-friendly vehicles. It set a long-term development and commercialization plan for electric vehicle development in 2010 through the Eco-friendly Vehicle Developing Project.
The government also set a production target of 100,000 hybrid cars by 2013 and planned to start producing plug-in hybrid electric cars in 2014. To achieve these goals, it came up with four strategies and 12 action plans in 2010.
The government considers eco-friendly vehicles to be clean diesel, hybrid, electric and fuel cell vehicles. It has emphasized the promotion of research and development(R&D) collaboration, development of highquality human resources, enactment of green vehicle-related laws and standards and building of infrastructures. Hyundai Motor has developed core technologies and the integration of relevant systems with suppliers. The company recently established an information technology-related subsidiary and steel mills for developing eco-friendly, highly fuel efficient vehicles.
Roles of Government Ministries
The Ministry of Environment (MOE) builds infrastructure, provides purchasing subsidies and sets charging standards. The
government provides KRW 15 million (USD14,437) for high-speed electric vehicles and KRW 5.78 million for low-speed ones. It has also offered KRW 8.8 million as subsidies for installing chargers until 2014. The Ministry of Trade, Industry & Energy is in charge of nurturing industries. And the Ministry of Strategy and Finance provides various tax incentives for electric vehicle purchasers.
The government has facilitated a tri-vergence of hardware, software and network to develop quasi-mid-sized electric vehicles and enhance battery technologies and the construction of production facilities in Korea and abroad. It has also been developing a fast charging system since 2010.
In accordance with the government’s development plan, Hyundai and Kia invested in the commercialization of every possible power train, including clean diesel, hybrid, plug-in hybrid electric vehicles (PHEV), high-speed battery electric vehicles (BEV) and fuel cell vehicles, and newly established small- and medium-sized enterprises (SMEs)commercialized low-speed BEV.
Hyundai, Kia and the subsidiaries of foreign original equipment manufacturers (OEMs) set a commercialization plan for BEVs in 2010. Renault Samsung has been very active in the commercialization of BEVs, such as the Fluence and SM3, and Hyundai has strived to commercialize PHEV. Kia successfully commercialized BEV Ray in 2012. SMEs commercialized low-speed BEVs in 2010, but sales were slow due to high prices, low performance and government driving restrictions on main roads.
The Ministry of Environment (MOE) estimates charger demand based on a specific formula of multiplying 2.5 to the sales of BEVs in the early stage of commercialization. The government has been supporting the construction of fast and slow charging infrastructures, and it has a 3-stage installation strategy to expand the distribution of charging stations from metropolitan areas to the provinces. The first stage involves the construction of 30 charging stations, including one fast and five slow chargers per station. The second stage involves the construction of fast charger stations. The third stage calls for the evaluation and further installation of charging stations.
The government will nurture electric vehicle-related service companies and emphasizes that the revenue generation of charging businesses is more important for the survival of service companies. The government initiated the Smart Place and Transportation Project on Jeju Island in September of 2010. By December of 2013, there were 400 charging points and 250 BEVs on Jeju Island. Nine proving areas are being expanded: Seoul, Bucheon, Dangjin, Younggwang, Gwangju, Changwon, Daegu, Jeju and Pohang. The number of charging points in those areas numbered 130 in 2010. The MOE added 100 public fast chargers in 2013.
THE GOVERNMENT IS EXPANDING CHARGING STATIONS NATIONWIDE. THE MOE DEPLOYED 80 PUBLIC FAST CHARGERS THAT FOLLOW THE CHADEMO STANDARD IN 2012. IT ALSO BUILT AN INFORMATION SYSTEM FOR PUBLIC CHARGING INFRASTRUCTURE.
Korea’s Hybrid and BEV Market
The Korean government has strived to promote the sales of BEVs through constructing charging stations and purchasing subsidies. Hyundai developed BlueOn BEV based on the i10 model in 2009, but it was not produced for consumers. Until 2012, Hyundai and Kia supplied BEVs only for public institutes, but Kia, Renault Samsung and GM Korea started to sell BEVs to consumers in 2013. The government introduced an auction system because consumer demand exceeds
OEM supply of BEVs.
OEMs have been accelerating the commercialization of high-speed BEVs starting this year. Kia has set an Eco Dynamics’ BEV development plan and Hyundai has set a Blue Drive BEV development plan. Thus far, Kia has supplied more than 1,000 Ray BEVs for public organizations. Kia produced 343 Ray BEVs and sold 277 in the domestic market in 2013.
Among foreign automakers, GM Korea produced 1,227 Spark BEVs but sold 40 in 2013. Renault Samsung introduced the SM3 BEV in the second half of 2013, and produced 403 units and sold 398 units in 2013.
The government is expanding charging stations nationwide. The MOE deployed 80 public fast chargers that follow the CHAdeMO standard in 2012. It also built an information system for public charging infrastructure.
Consumer attitude toward BEVs is improving. According to a government survey of 405 BEV drivers in Jeju Island, a BEV test bed, 52.8 percent of respondents revealed purchasing intent and 92.3 percent wanted a fast charger. Jeju, a special self-governing province, is providing an additional KRW 8million purchasing subsidy for BEVs. The driver satisfaction rate of public organizations improved from 69.4 percent in 2011 to 86.4 percent in 2012.
Recently, the Seoul Metropolitan Government introduced EV sharing programs to improve air quality. Seoul City operates more than 200 BEVs and 60 rental points. Anyone who wants to use a BEV should register and receive membership cards online or via their phones. Rental fees for a Ray EV is about USD 5 an hour, which is a bit lower than the ICE models’ fee of USD 6 an hour. Drivers can rent a BEV for a day.
Hyundai produced 43,390 hybrid vehicles in 2013 and continues to produce them actively today. In 2004, Hyundai supplied 50 Click hybrids to the MOE and Kia developed the Pride Hybrid in 2005. Hyundai and Kia have intensively produced hybrid vehicles since 2009. Kia produced more than 26,780 hybrid vehicles and exported 19,022 in 2013. Hyundai will introduce fuel cell vehicles in 2015, and the company and the government will construct fuel cell stations in metropolitan areas.
It is worth noting that the government provides tax incentives and subsidies for hybrid vehicles and BEV, and Hyundai, Kia and foreign OEMs are increasing green car models. With sales of green cars expected to continue rising, Korea is poise.d to lead the global green car industry.
Source : Invest Korea