The government is expected to announce support measures for the slowing eco-friendly vehicle industry, which has experienced a temporary demand stagnation, on the 15th. The measures will include policy financing support for corporations facing crises in the secondary battery sector and infrastructure and institutional improvements to stimulate domestic electric vehicle demand.
According to the Ministry of Strategy and Finance on the 10th, the government has tentatively decided that the first meeting of the year for the Industrial Competitiveness Enhancement Ministerial Council (hereinafter referred to as the Industrial Competitiveness Council) will be held on the 15th. The meeting will be chaired by Choi Sang-mok, Acting President and Minister of the Ministry of Strategy and Finance.
The Industrial Competitiveness Council is a consultation body among ministries that oversees and coordinates short-term issues related to restructuring and discusses mid to long-term plans to enhance industrial competitiveness. The council, newly established in 2016, has not convened for two years after discussing the acquisition of Daewoo Shipbuilding & Marine Engineering (now Hanwha Ocean) by Hanwha Group in December 2022, but it was resumed on Nov. 27 of last year. Since Dec. 23 of last year, it has been expanded and revamped as a public-private joint meeting.
At this meeting, the Ministry of Trade, Industry and Energy will announce the 'measures to enhance the competitiveness of eco-friendly vehicles and secondary batteries' that it reported to the Acting President on the 8th.
Automakers and battery manufacturers are currently experiencing poor performance due to a decline in sales amid the electric vehicle chasm. Hyundai Motor recorded approximately 510,000 electric vehicles sold from January to November last year, a 1.2% decrease compared to the same period the previous year. LG Energy Solution, the largest battery corporation in Korea, saw its revenue decline for the first time since its split last year.
The government plans to include loan support measures for secondary battery corporations in response to the current situation. The aim is to support coping with the chasm crisis through smooth funding supply. Low-interest policy financial support through the Industrial Bank, Export-Import Bank, and government guarantee programs for private loans are expected to be announced.
The government has stated that it will review specific interest rates and funding limits before the Industrial Competitiveness Council convenes. Regarding electric vehicle corporations, it is reported that preparations are underway to improve infrastructure and systems to stimulate domestic demand.
A government official noted, 'Recent economic policy directions include support measures for buyers, such as the reduction of the consumption tax rate applied to vehicle purchases, but plans are included to support corporations at the Industrial Competitiveness Council.'
It will be noteworthy if policy support that the industry has requested so far will be reflected in this meeting. The battery industry has been requesting the government to introduce a 'direct refund system' that refunds the national strategic technology investment tax credit in cash.
Kim Pil-soo, chairman of the Korea Electric Vehicle Association, said, 'I hope that policies to address the negative perception arising from distrust towards electric vehicle fires will accompany this.' He emphasized the need for the introduction of smart control chargers that automatically stop charging once a certain battery charge level is exceeded at charging stations and subsidies for scrapping old electric vehicles.