EVs are great unless you make auto parts

The Ioniq 5, Hyundai Motor's all-electric vehicle, was launched in April 2021. [YONHAP]

The rise of electric vehicles (EVs) will cut the number of auto part suppliers in Korea by 30 percent by 2030, according to a report released by the Korea Automotive Technology Institute (Katech).

EVs generally need 20 to 30 percent fewer parts than internal combustion engine vehicles.

According to the report, global sales of EVs are expected to increase from this year's 13.8 million to 28.4 million in 2025 and 57.7 million in 2030. This EV category includes all-electric vehicles, hybrids, plug-in hybrids and fuel cell vehicles.

They will account for 47 percent of new car sales in 2030 from the current 14 percent.

The report also said the size of the global driverless car market, which was valued at $6.4 billion in 2020, will grow at an annual rate of 40 percent to reach $1.1 trillion in 2035.

Katech expects the number of auto suppliers for internal combustion engine vehicles will fall by 30 percent from 2,815 in 2019 to 1,970 in 2030, while suppliers of parts for eco-friendly vehicles are expected to increase by 350.

“The industry will convert to an automotive electronic and software-centered market according to the trend, and lay off workers related to internal combustion engine vehicles,” said a spokesperson for Katech. "Government advisers in Germany said around 88,000 to 400,000 employees in the global automotive industry may lose their jobs by 2030."

To minimize the impact, localization is important, the report concluded. Korea's localization of technologies related to EVs and autonomous driving is far behind its expertise in internal combustion engine vehicles.

Localization rates — the percentage of auto parts that are not imported — remained lower for EVs and autonomous driving vehicles.

The localization rate for internal combustion engine auto parts reached 95 percent, but for pure electric vehicles the rate is 68 percent.

Rates were relatively low for fuel cell electric vehicles at 71 percent and autonomous driving vehicles at 38 percent.

“The country’s demand for workers in the future automotive industry will reach up to 89,000 by 2028, meaning we would need 38,000 more engineers in six years,” said Lee Hang-gu, a research fellow at Katech.

BY BAEK MIN-JEONG [cho.jungwoo1@joongang.co.kr]