A bit strong but not that strong, what is the level of South Korea's electric vehicle industry with insufficient infrastructure?

What is your first impression of South Korea?

To describe it in one sentence, it is "not weak, not strong." If you say it is strong, it lacks the necessary conditions to become a great power; if you say it is weak, it sometimes does have "something".

This is true for the entire country, and its many industries naturally exhibit such characteristics as well.

Taking new energy vehicles as an example, Korean automakers such as Hyundai and Kia are relatively active in developing new energy vehicles, and they also have some advantages in key links such as power batteries. However, But However, its electric vehicle penetration rate has been hovering at a low level and has never exceeded 10%.

To judge the development level of a country's new energy vehicle industry, there is one most important indicator, that is sales. In 2023, the total sales of automobiles in the Korean domestic market will be 1.749 million units, of which electric vehicle sales will be about 162,000 units, with a penetration rate of about 9.3%.

What is this level? In 2023, Volkswagen, which is struggling in China's new energy market, sold 191,800 electric vehicles in China.

South Korea has always been relatively positive in the development of electric vehicles.

In 2019, the penetration rate of electric vehicles in South Korea was only 1.9%, and it grew rapidly in the following years. However, the penetration rate of electric vehicles in South Korea in 2023 was only 9.3%, which was a decline compared with 9.7% in 2022. This performance was obviously lower than expected.

The weakness of South Korea's electric vehicle industry can also be seen from the sales of a single model. In August 2024, Hyundai Motor's best-selling electric vehicle in the Korean domestic market was the Casper Electric, with sales of 1,439 units.

It is worth mentioning that Casper Electric is an entry-level mini SUV model launched by Hyundai Motor. After deducting subsidies, the price is 20 million won, about 100,000 yuan, and the driving range reaches 315km. Such a car can become the sales champion, proving that the development stage of South Korea's electric vehicle industry is roughly equivalent to that of China around 2020.

In early August, a series of fires caused by spontaneous combustion of electric vehicles occurred in South Korea, which aroused public concerns about the safety performance of electric vehicles. The South Korean government required automakers to proactively disclose the brand information of electric vehicle batteries. In other words, before this, the Korean electric vehicle industry had not even disclosed the brand of power batteries.

In addition, some local governments in South Korea have also begun to introduce some strange policies because of these incidents. For example, the Seoul Municipal Government is preparing to formulate a policy of "only allowing electric vehicles with a battery remaining capacity of no more than 90% to enter underground parking lots", and Pyeongtaek City in Gyeonggi Province provides subsidies for apartments that move underground charging facilities to the ground.

In terms of electric vehicle infrastructure, South Korea also has certain shortcomings. By the end of 2023, the number of charging piles in South Korea exceeded 300,000 for the first time, but only 10% of them were fast charging piles. According to Hyundai Motor, the company will install 3,000 super charging piles in South Korea by 2025. These figures are inconsistent with South Korea's self-proclaimed status as a "car power" and are not enough to support the electrification transformation of South Korea's automotive industry.

In fact, these problems of Korean electric vehicles are quite consistent with South Korea's overall international status.

South Korea is a developed country recognized by the United Nations, with a GDP of about 1.7 trillion US dollars in 2023. However, South Korea also has the largest number of immigrants among developed countries, and its fertility rate is as low as 0.79. With a good life, will people think about emigrating and not having children? Therefore, how strong is South Korea? It looks a little strong, but in fact, there is not much "hard stuff".

This is true for the Korean economy and also for the electric vehicle industry.

Like Japan, South Korea has problems such as small land area and tight energy supply, so it is relatively supportive of the development of electric vehicles. However, the current electric vehicle industry is completely different from the era when South Korea's fuel vehicles rose several decades ago. The rise of South Korea's automobile industry is the result of technology spillover from the European and American automobile industries. This is the same as the shipbuilding, steel, electronics and other industries. Now there is no such time window.

Electric vehicles are a new type of car. China, the United States, Europe, Japan, and South Korea are actually on the same starting line. Chinese scientist Qian Xuesen put forward a similar view when he suggested that China develop electric vehicles in 1992.

To support this new form of automobile, huge domestic demand, rapidly iterating technology, strong industrial policies, and continuous infrastructure construction are needed, which are not something a small country like South Korea can accomplish.

Of course, the Korean electric vehicle industry is not without advantages. Compared with countries such as Germany and France, South Korea has a relatively obvious advantage in the global electric vehicle industry chain, that is, power batteries.

From January to July 2024, among the top 10 global power battery installation volumes, three South Korean manufacturers, LG Energy Solution, SK On, and Samsung SDI, entered the top 6, with a combined market share of about 21%, occupying an important position in the global market. This allows South Korean local manufacturers to be more calm in developing electric vehicles and will not be affected by fluctuations in the power battery industry chain.

But even the three major power battery manufacturers in South Korea are not optimistic about their survival. In 2023, the combined global share of the three manufacturers reached 25.6%, but under the attack of Chinese manufacturers, it has fallen to around 21%.

South Korea's electric vehicle industry is a global power, but the competition in the global automotive industry is a pure competition of strength. With South Korea's own strength, it is unlikely to support a complete industrial chain alone. It can only make breakthroughs in a few links such as power batteries. It is unlikely to turn around as a whole.

Of course, this is not a problem of South Korea itself, but is determined by many factors such as its natural geography. In the future global diversification of new energy vehicles, it is an established fact that small countries like South Korea will be marginalized.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.