South Korea could lose as much as $26 billion in automobile exports if sales of combustion engine-powered vehicles become banned at home from 2035 as proposed by Korea’s National Council on Climate and Air Quality to meet emission commitments.
Korean carmakers ship out more than 60 percent of their output. The share of clean-fuel vehicles such as hybrids, electric vehicles and fuel-cell vehicles are projected to reach 30 percent of the country’s shipments after 2030. But gasoline and other traditional fuel-powered vehicles will still make up the bulk of demand in Asia, South America and the Middle East.
The industry fears if conventional gas-burning cars become banned at home by 2035, carmakers won’t be able to keep up economies of scale to compete in the global market.
Without domestic shipments, auto exports could fall by 1.4 million units, or 28.8 trillion won, by 2040 and cost as many as 175,000 jobs.
The impact on the supply chain could be worse.
An official from the Korea Automobile Manufacturers Association said that more than 60 percent of local auto parts suppliers have yet to transition to clean fuel, adding that the rapid migration could destruct the local auto industry.
National Council on Climate and Air Quality, a presidential committee, in its report on Monday advised Korea to limit new car sales from 2035 to only green cars such as plug-ins and hybrids.
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]