The Korean automobile parts industry has expressed concerns that the government’s proposed target for the transport sector under the ‘2035 Nationally Determined Contribution (NDC)’ is unrealistic. Industry leaders argue that a rapid transition would inevitably lead to large-scale restructuring for parts companies, necessitating a moderation in pace.
At a press conference held on the 13th at the Korea Automobile Manufacturers Association in Seocho-gu, Seoul, the Korea Automobile Manufacturers Association criticized the government’s goal of distributing 8.4 million to 9.8 million zero-emission vehicles (electric and hydrogen) by 2035, representing 30-35% of the total vehicle registration, as unachievable considering current domestic industry and market conditions.
Lee Taek-sung, director of the Korea Automobile Manufacturers Association, stated, “The zero-emission vehicle distribution goal proposed by the government is very difficult to achieve given the current state of the domestic automotive industry’s ecosystem and parts sector.” He noted that major global countries have already announced adjustments to align with market conditions and industrial realities.
The parts industry instead suggests setting a distribution goal of around 5.5 million to 6.5 million vehicles, equating to approximately 20% of registrations. This target is thought to be capable of fulfilling international obligations for greenhouse gas reduction while preserving industrial competitiveness and job stability. Lee emphasized that the government should engage with the parts industry, closely related to the transition to zero-emission vehicles, to devise a realistic goal.
According to the association, about 45% of domestic automotive parts companies currently produce parts related to internal combustion engines, such as engines, transmissions, and fuel. These companies employ over 110,000 people. Under current government targets, internal combustion engine sales would essentially need to cease by 2034, but the transition rate to future automotive businesses is only 19.9%, placing most companies in a difficult position. Lee expressed concern that a rapid transition could exacerbate corporate difficulties, leading to large-scale restructuring and increased job insecurity.
The association also urged the use of technological alternatives such as hybrid (HEV) and plug-in hybrid (PHEV) vehicles, as well as carbon-neutral fuels. Incorporating hybrids with engines and internal combustion vehicles using carbon-neutral fuels as reduction methods could provide transition opportunities for domestic internal combustion parts manufacturers. It noted that major countries such as the United States, the United Kingdom, and Germany are recently shifting away from a 100% electrification target, recognizing alternative technologies in their policies.
Previously, the Ministry of Environment had proposed three reduction scenarios for the 2018 net greenhouse gas emissions (total emissions minus absorption and removal from forests and soils) by 2035: 48%, 53%, 61%, and 65%. Assuming a vehicle registration count of 28 million by 2035, these scenarios estimate the zero-emission vehicle registration ratios as 30% (8.4 million units), 34% (9.52 million units), and 35% (9.8 million units, same as the 65% reduction scenario).