Korea emerges as test bed for EV
By Park Si-soo
More global carmakers are rolling out their new electric vehicles (EV) in Korea for testing, a reflection of the country’s basic infrastructure for these vehicles.
Volkswagen unveiled its latest EV Golf Blue E-motion in Seoul, Monday, saying the company selected Korea as one of the “strategically important” nations for the sales of EVs, along with the United States, China, Japan, the United Kingdom, France and Italy. The company will test-drive five Blue E-motions here ahead of mass production starting next year.
Japanese carmaker Toyota has been test-driving several of its ambitious Prius plug-in hybrids on Jeju Island since August. In May, BMW unveiled the i8 and i3, concept EV cars that will be available here from 2014 following a global launch for the two models planned next year.
“Korea is a good test bed for EVs,” a Toyota official said. “The country is relatively well prepared for their advent. Korea is home to companies manufacturing key parts for cars. The government and citizens have deeper knowledge and understanding about the industry, making it easier for makers to predict the future shape of their business.”
Analysts here said Korean firms hold global leadership in rechargeable battery technology and this is one of key reasons behind the country’s growing popularity as a test-driving venue. They added state-led campaigns to increase use of eco-friendly EVs is another reason.
LG Chem in Seoul is a leading manufacturer of batteries used in the vehicles. Top global carmakers use its products in the EVs, which means the firm’s presence here is enough reason for global carmakers to come to Korea to build closer ties with it. Despite the global recession, LG Chem posted a better-than-expected profit for the second quarter on growing demand.
Such an outstanding performance has galvanized other firms to join forces to challenge its leadership. Observers say while it may pose a threat to LG, intensifying competition will eventually reinforce the country’s battery industry as a whole.
SK Group is the latest challenger. In July, it joined forces with Europe’s leading auto-part maker Continental AG to establish a joint venture specializing in electric car batteries. The two firms will spend about 270 million euros (400 billion won) in a 51:49 investment over the next five years to develop cutting-edge batteries, SK said.
In the same month, SK Innovation signed a memorandum of understanding with Kia Motors, the country’s second largest automaker, to cooperate on the development and marketing of electric vehicles.
Under the MOU, the two firms will launch joint promotional activities for the marketing of next generation vehicles and strengthen brand competitiveness along with technological capacities.
Seoul has been aggressive in promoting the use of electric vehicles. The city of 10 million people will launch an “electric car rental service” in October. The city signed an agreement with LG CNS and Korea Car Sharing in July to jointly provide the service.
About 200 electric cars will be available in the initial stage. The city will provide financial support for operating firms to buy electric passenger cars and install recharging facilities. The cars can be rented at low rates from 6,000 to 10,000 won per hour.