Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Major business groups breathe sigh of relief amid Harris' rise
Democratic presidential candidate and U.S. Vice President Kamala Harris applauds as U.S. President Joe Biden speaks during Day 1 of the Democratic National Convention in Chicago, Ill., Monday. Reuters-Yonhap
By Lee Min-hyung
Samsung, LG, SK, Hyundai Motor forecast reduced risk under Harris presidency
Major conglomerates are expressing unexpected relief at the rise of U.S. Democratic presidential candidate Kamala Harris, as the vice president is widely expected to maintain consistency in key eco-friendly policies championed by the incumbent Joe Biden administration — particularly those related to batteries and electric vehicles, according to industry officials and experts, Tuesday.
They said her potential election win will drastically reduce major risks posed by Republican nominee and former President Donald Trump who has outwardly displayed a negative stance against EVs. He has threatened to end a $7,500 (10 million won) tax credit offered to EV purchases if he regains the presidency.
According to a recent poll released by U.S.-based market research firm Ipsos, Harris’ approval rating reached 49 percent, surpassing that of Trump by 4 percentage points. The poll was conducted for a week from Aug. 13 on a group of 2,336 adults in the United States.
As Harris is forecast to uphold Biden’s Inflation Reduction Act, which offers better tax credits for EVs, major Korean EV and battery manufacturers are in favor of her winning the upcoming election.
Officials from the industry said they would be able to reduce any unwanted spending under the scenario of Harris being elected as the next U.S. president.
“We can reduce any policy-wise uncertainties if she wins the election, but we still consider both possibilities, as the two candidates remain neck-and-neck in multiple polls,” an official from a major conglomerate here said.
Republican presidential nominee and former U.S. President Donald Trump speaks during a campaign event at Precision Custom Components in York, Penn., Monday. AFP-Yonhap
Most export-reliant manufacturing players here, such as Samsung, LG, SK and Hyundai Motor, will be able to map out their business plans more concretely and stably under a possible Harris presidency, but the situation would be different otherwise, according to the official.
“Trump remains unfavorable to any kinds of eco-friendly business sectors, such as EV batteries and solar panels, and hints at scrapping subsidies or tax benefits in the industries,” the official said. “As the aforementioned Korean conglomerates focus on expanding the businesses, Trump’s win would not generate more favorable outcomes than Harris.”
According to an interview with Reuters, released on Monday, Trump said he would consider ending a $7,500 tax credit for EV purchases if elected.
Experts also painted a cautiously optimistic picture of a Harris presidency due to the strong reliance on exports and manufacturing of Korean firms.
“For instance, Hyundai Motor will be able to activate its EV factory in Georgia much more smoothly and stably, if Harris wins the presidential election,” said Kim Pil-soo, an automotive technology professor at Daelim University College.
The carmaker is set to start operation for Hyundai Motor Group Metaplant America sometime around October. The plant is Hyundai Motor Group’s key U.S. manufacturing facility that will mass-produce EVs and hybrid cars.
“Under the possible presidency of Harris, the carmaker does not have to worry about any potential subsidy cuts, and this will help the company expand its market share in the world’s largest economy,” Kim said.
Foreign and institutional investors also responded to the gradual rise of Harris, increasing their bets on secondary battery shares in Korea.
According to data from the Korea Exchange, they have gone on a buying spree of EV battery-linked shares in the benchmark KOSPI and secondary Kosdaq.
Between August 1 and 19, institutional investors bought a net total of 46.8 billion won in LG Energy Solution shares, even amid nationwide concerns about EV fires. Foreign investors also jumped on the bandwagon, with their net purchase of POSCO Holdings reaching 72.2 billion won during the same period.