Tesla’s Korea entry could boost electric car demand

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Tesla’s Korea entry could boost electric car demand

The introduction of Tesla Motors to the Korean auto market has sparked renewed interest in eco-friendly cars, but industry experts say that without proper infrastructure investment and cooperation among local industry players, Korea will eventually fall behind in the emerging sector.

“The entry of Elon Musk’s Tesla into Korea later this year, and car sales next year, will trigger interest in eco-friendly models, which will consequently result in heated competition among local electric-vehicle manufacturers to respond to their increasing demand,” Lee Hang-ku, a senior researcher at the state-run Korea Institute for Industrial Economics & Trade, said in a report released Monday.

While more consumers around the world have been drawn to electric vehicles in recent years, the Korean market has shown a relatively lukewarm response to the concept, with only 0.03 percent of vehicles on Korean roads registered as electric vehicles, according to data compiled by the Ministry of Trade, Industry and Energy last year.

The vehicles’ high price and the country’s lack of charging stations have contributed to the low numbers.

Tesla’s entry into the market, though, may turn things around.

The company unveiled its Korean website earlier this month and started receiving preorder reservations for its Model S, Model X and newest and more affordable Model 3 vehicles.

Considering the company’s previous success in other countries, Lee anticipates Tesla will do well in Korea.

“Tesla has been always attentive to consumers. It built super-charging stations in the United States when their users complained about long charging hours,” Lee said.

“Since the first two models were too expensive for wide consumption, it also launched a version [the Model 3] for mass consumers. Such an approach will be well received among Korean consumers, too.”

The researcher also pointed out, though, that the country’s infrastructure and its auto parts industry still have a ways to go in order to match global standards for electric vehicles.

“Korea’s entire infrastructure market falls two years behind that of the United States, when seen in the most optimistic perspective,” Lee said.

According to a report by the Ministry of Environment, Korea has one charging station per 17.1 electric vehicles, while the United States has one for every two units.

“Although LG Electronics is the world’s leading battery maker, other auto parts needed for electric cars are severely lacking in the Korean auto industry,” the researcher said.

Lee also emphasized that policies for electric cars should be managed by a single body instead of separate ministries for a more coordinated effort.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]
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