• The Key Trends and Implications in the Electric Car Export
    2021-03-30 hit 410

    The Key Trends and Implications in the Electric Car Export

    After reaching a peak in 2017, the global car sales slowly declined; however, the electric car sales showed a steep annual growth rate of 48% for the past five years (2015-2019). The global sales of automobiles are expected to decline by 14% because of the sluggish economy impacted by COVID-19; however, the sales of electric cars skyrocketed, showing that the industry gained a new momentum for growth. Countries worldwide are utilizing the COVID-19 crisis as an opportunity to transition towards a sustainable, low carbon economy by implementing stricter environmental regulations, providing incentives to purchase electric vehicles, investing in charging stations. Therefore, on the supply side, companies had to increase the production ratio of electric cars because of environmental regulations. And consumers will enjoy a wider range of options since approximately 500 electric vehicles will be showcased in the market. On the demand side, many people postponed switching out of their old car because of the economic downturn from COVID-19. Therefore, there’s a substantial number of people, globally, waiting to purchase new vehicles. Furthermore, countries worldwide are strengthening the incentive for buying an electric car, thereby shifting demand from internal combustion vehicles to electric cars.


    Following COVID-19, the growth rate of the electric cars industry depends on the region. In particular, Europe is showing a more pronounced growth rate because of its strict regulation and more environmentally-oriented mindset. 20.4% of Korea’s total automobile export in 2020 was to Europe, whereas 68% of Korea’s total electric car export was to Europe, proving that Europe is the largest export market for environmentally friendly cars. In particular, battery electric vehicle export to Europe increased by 74.8% compared to the previous year, and export to Britain, France, and Italy spiked by 624.3%, 112.2%, and 260.2%, respectively. Fueled by the growth of battery electric vehicle export, Korea’s total eco-friendly automobile increased 19.3% compared to the previous year.


    Meanwhile, breaking it down by category, Korea ranked 4th in battery-electric cars, 7th in hybrid cars, and 5th in ecofriendly cars based on the Q1-Q3 export value of 2020. According to the revealed comparative advantage (RCA), the competitive advantage of Korea’s battery electric vehicles and plug-in hybrid vehicles continued to rise following 2017. A total of 995 hydrogen-electric cars were exported last year, and there is room for improvement. However, Korea started exporting hydrogen trucks to Europe, and the overall export of hydrogen-electric vehicles increased by 26.3% compared to the previous year. Battery production, a key component that determines the cost and function of electric vehicles, is another area Korean companies excel in; Korea ranked 2nd, 4th, and 5th between January and November of 2020.


    This report finds that to remain ahead amidst stiff competition in a quickly-growing electric vehicles market, companies must carefully review the market trends, environmental regulation, and inventive policy of each country and supply diverse models of electric cars with comparative advantage at the right time. Furthermore, the automobile industry is a fast-changing industry, with potential risks emerging from electrification, autonomous driving, and mobility services. To successfully manage these risks and develop technology, companies will need to sign an M&A or strategic MOU with participants across the value chain, for example, in the areas of battery, AI, and sensors. Meanwhile, governments should continue to support Korea’s electric car industry by constructing the necessary infrastructure, increasing mid-to-long-term R&D investment, and restructuring the system in line with the global trend of stronger environmental regulations.

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