Korea vows to become one of world's top 3 automotive powerhouses by 2030

[Graphics by Song Ji-yoon]

South Korea vows to become one of the world’s top three automotive powerhouses through a “fast but smooth transition” to future mobility and industry boundary expansion, according to a new vision released by the Ministry of Trade, Industry and Energy (MOTIE) on Wednesday.

To meet the goal, Korea will increase its global electric vehicle market share to 12 percent from the current 5 percent by 2030 by producing 3.3 million EVs per year. Over the next five years, the government and the private sector will cooperate to inject more than 95 trillion won ($65 billion) into the local auto industry and train 30,000 experts in future cars.

The vision, which was discussed during a roundtable meeting between MOTIE Minister Lee Chang-yang and Korean automotive and IT companies at the Korea Chamber of Commerce and Industry, came the day before the official visit of U.S. Vice President Kamala Harris to Seoul amid growing concerns that America’s Inflation Reduction Act (IRA) will act as a trade barrier for Korean-made vehicles.

The ministry emphasized that the Korean auto industry should develop the capacity to respond to potential supply chain crises due to protectionism policies such as the IRA and rapidly changing geopolitical landscapes. In this context, the Korean government will pursue strategies in four areas: making a leap to a top-tier country in electrification, smooth transition across the ecosystem, establishment of a stable supply chain, and creation of autonomous driving and new mobility industries.

According to the ministry, the global auto market is expected to be shared nearly equally between EVs and fossil fuel engine-powered cars by 2030, with EV sales forecast to control 49.6 percent in the entire market thanks to the rapid migration to green cars to achieve carbon neutrality.

Last year, Korea ranked fifth in global auto production with 3.46 million units, and Hyundai Motor and Kia ranked third in sales (8.2 percent) among global automakers.

Korea’s EV shipments have also increased sharply, ranking sixth in global EV sales (5.1-percent market share) and first in hydrogen car sales (60 percent) thanks to its competitiveness in key auto parts such as batteries and fuel cells.

In Korea, EV sales grew from 10,000 units in 2016 to 230,000 units last year, and hydrogen car sales from 87 to 20,000 units.

Korea’s No. 1 and 2 automakers Hyundai Motor and Kia are also seeking to produce more parts and materials as well as software for battery or hydrogen-powered cars in response to frequent supply chain disruptions from geopolitical risks and growing protectionism on the global trade front.

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