(Editorial) Trump “Abolished subsidies on the first day of his term”… When drawing up an emergency plan for Korea’s electric vehicles – Dong-A Ilbo VRESP TODAY

Former President Donald Trump, who will run as the Republican candidate in the November U.S. presidential election, strongly signaled his intention to cancel the electric vehicle support policy promoted by the Joe Biden administration. There are concerns that if Trump is elected, the global electric vehicle and battery industry, whose growth has slowed noticeably, will be greatly impacted. Stock prices of Korean battery-related companies are also showing weakness due to this effect.

At a recent campaign rally in Michigan, Trump said, “The government is giving huge subsidies to electric vehicles that people don’t even want. “(If elected), I will sign an executive order to abolish electric vehicle subsidies on the first day of my term,” he said. Michigan is where the headquarters of the three largest U.S. automobile manufacturers are located, and the remarks were aimed at workers who are concerned about losing their jobs due to the spread of electric vehicles, which have 40% fewer parts than internal combustion engine vehicles.

The related industry is on edge as the number of electric vehicles delivered by Tesla in the first quarter of this year decreased for the first time in four years. If the Biden administration’s ‘Inflation Reduction Act (IRA)’, which provides up to $7,500 (approximately 10.1 million won) to consumers who purchase electric vehicles to expand the supply of eco-friendly vehicles, is abolished or reduced as Trump declared, electric vehicle sales in the United States will grow even faster. It is expected to shrink.

Hyundai and Kia overcame the handicap of not having a local electric vehicle factory and sold about 94,000 electric vehicles in the United States last year, ranking second in market share after Tesla. In order to receive IRA subsidies provided only to electric vehicles finally assembled in North America, the operation of the Georgia plant, which was scheduled for the first half of next year, was also brought forward to October this year. Even for the three battery companies LG Energy Solutions, SK On, and Samsung SDI, which are spending tens of trillions of won to build factories in the United States, the possibility of IRA disposal is a serious negative news that increases uncertainty.

Electric vehicles and batteries are the main industries leading Korea’s exports. In a situation where Chinese companies such as BYD and CATL have taken control of the world’s largest domestic market and are launching a low-price offensive in the European Union (EU) and South America, it is difficult to avoid a blow if there is an obstacle in the U.S. market. Emergency measures have become necessary, such as controlling the pace of investment in the United States and speeding up entry into the ‘Asia New 7’. No matter what administration is in place, the government must prepare by mobilizing all of its diplomatic and trade networks so that the positive effects that our companies have had on the U.S. economy can be fully evaluated.

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About bryan michael

I am a news writer, editor and journalist with more than 13 years of experience. I have an MA in Journalism and have published work in various publications around the world. With me, you don't have to worry about copyright and defamation issues or being punished by search engines. You get original work that complies with media laws. Communication: I really prioritize good communication with clients, from their expectations to the initial plan and vision of the project in particular. Tell me what you want - even down to the level of 'how' you want it written. Nonetheless, I must note that self-expression is very important to me and I hope to reach a solution together with the client but not at the expense of the quality of the finished product.

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