67% of new cars in the U.S. by 2032 are electric vehicles
Hyundai Motor Company embraces the task of expanding electric vehicle production
Battery industry, possibility of North American business expansion
Concerns about entry into Chinese battery makers
As the U.S. government drafted regulations to fill two-thirds of new vehicles with electric vehicles by 2032 and drastically reduce carbon dioxide emissions from internal combustion engine vehicles, Korean companies have become inevitable. Hyundai Motor Group needs to reexamine its internal combustion locomotive strategy in order to increase the proportion of electric vehicles more steeply than the original target. Domestic battery makers such as LG Energy Solutions, Samsung SDI, and SK On are paying attention to the possibility of further expansion of their business in North America.
The US Environmental Protection Agency (EPA) announced on the 12th (local time) that the carbon emission reduction plan in the transportation sector is key to filling more than 67% of new cars sold in the US with electric cars by 2032. In the case of internal combustion locomotives, the emission standards for nitrogen oxides and fine dust are gradually strengthened to reduce carbon dioxide emissions to 82 grams per mile (about 1.6 km) by 2032. It is reduced by about 56% from 186g per mile, which is the standard for 2026.
This is a further strengthening of the goal of achieving 50% of electric vehicles among new cars in 2030 announced by US President Joe Biden in 2021. Even in the United States, there are skeptical reactions to the possibility of realization. In fact, the share of electric vehicle sales in the US last year was 5.8%.
Hyundai Motor Group, which is aiming to expand its market share in the US, is faced with the task of further increasing the production scale of electric vehicles. Last year, 3.8% of Hyundai Motor’s total US sales and 4.1% of Kia’s were electric vehicles. Last year, Hyundai Motor Company set a target of 58% (530,000 units) in electric vehicle sales by 2030, and Kia presented 47% (475,000 units) at the’CEO Investor Day’ held on the 6th. On the other hand, the EPA predicted that by 2032, 70% of Hyundai Motor’s sales and 71% of Kia’s sales would be electric vehicles due to the effect of strengthened regulations, increasing the burden. In order to reduce carbon dioxide emissions, we also need to increase sales of electric vehicles. Selling an internal combustion engine vehicle could be increasingly difficult. Hyundai Santa Fe and Kia Sorento, internal combustion engine sport utility vehicles (SUVs) sold in the United States, emit 375g and 377g of carbon dioxide per mile, respectively.
Domestic battery makers such as LG Energy Solutions, Samsung SDI, and SK On expect business opportunities in North America to expand further. As the production of electric vehicles increases, the demand for batteries will also increase. Market research firm SNE Research predicted on the 12th that in 2035, the global secondary battery market, excluding China, will see demand reach 4.6TWh (terawatt hour), while supply will stop at 3.0TWh. Demand for batteries is increasing and production facilities are expanding, especially in the United States, which implements the Inflation Reduction Act (IRA), and Europe, which announced the introduction of the Core Raw Materials Act (CRMA). In response, SNE Research, a domestic market research firm, predicted that China accounted for 75% of the global battery market based on production capacity last year, but by 2035 this will drop to 38%, the US from 6% to 31%, and Europe from 12% to 27%. seen as However, it is analyzed that it will be difficult to handle the explosive demand for batteries after 2030.
The joint venture (JV) business that the three battery companies have been doing with finished car makers is also expected to accelerate. An industry insider explained, “Completed car makers will try to share the burden of investing in electric vehicles with battery makers.”
On the one hand, there is also an analysis that Chinese companies will eventually have an opportunity to re-enter to make up for the deepening supply-demand imbalance. An industry insider said, “According to the purpose of introducing the IRA, the battery industry is becoming ‘Korea, the U.S. and Japan-centered’, but China’s movements should always be closely watched.”
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.