Can you imagine your chicken being delivered by an electric car? Previously, when we ordered chicken and beer at home, a delivery man would arrive with his motorcycle in a few minutes. According to an announcement from Seoul City on May 15, however, the delivery motorcycle of several chicken franchises is supposed to be replaced with an electric car, which is an eco-friendly and noiseless car. We should see our chicken delivered by electric car by the end of this year. Electric cars, which are cars that utilize electricity rather than gasoline or other conventional fuels, are now majorly influencing the global motor vehicle market. The Sungkyun Times (SKT) will explore the growing electric car market all over the world and discuss the stance toward electric cars, especially in Korea.
What Is an Electric Car?
An electric car, also known as an electric vehicle (EV), is a vehicle that uses electric motors for propulsion. Electric vehicles encompass hybrid and plug-in electric vehicles, but it is commonly referred to as an electric vehicle powered by electric batteries. Compared to conventional cars utilizing gasoline and diesel engines, electric cars are powered by electric motors, which operate by power from electric batteries.
|en.wikipedia.org/An Electric Car Charging at a Station|
Advantages of Electric Cars
1. Reduced Noise and Vibration
Since electric cars are powered not by engines but by motors, they produce less noise and vibration. By simply taking one ride, people can clearly understand how smooth and comfortable an electric car is. Even when the user accelerates the vehicle, it provides quick and smooth acceleration because the step on the accelerator is directly delivered to the wheels of the car, unlike previous cars that require more complex acceleration processes.
2. Cost Effective
Electric cars show great cost effectiveness over gasoline engine cars. It is estimated that the cost per mile to power electric cars is a mere one third of the cost to power gasoline cars. Since many components present in regular cars, such as the transmission, are not needed in electric cars, maintenance costs can also be reduced.
3. Environmentally Friendly
Environmental benefits of electric cars stem from the use of electric batteries instead of an internal combustion engine. Conventional vehicles have been blamed for air pollution and global warming due to the emission of carbon monoxide and carbon dioxide gases from their gasoline and diesel engines. Unlike these cars, electric cars receive power from rechargeable batteries, which do not produce any emissions.
Given the problem of fine dust in Korea, which is a great threat to people’s health, the electric car has major benefits compared to cars fueled by an internal combustion engine, one of the main contributors to fine dust accumulation.
Electric Cars Gain Presence in the Global Motor Vehicle Industry
An Increasing Electric Car Industry
The electric car market all over the world is showing a rapid increase in scale. According to research from the LG Economic Research Institute, the market increased by over 100 percent, reaching 600,000 units in 2015 compared to 200,000 units in 2013. UBS, a Swiss global financial service company, expects the electric car market to increase by 30 to 50 percent annually for the next five years. The internal combustion engine, including both gasoline and diesel, has dominated the motor vehicle industry for decades, but the electric car has been constantly expanding its influence among them. The SKT will now introduce the factors behind the growing electric car industry.
Substitute for Conventional Vehicles
Diesel engines are known for mass-producing particles, such as nitrogen oxide and ultrafine dust, which have detrimental effects on the body. According to Nature, a British scientific journal, ultrafine dust has killed up to 3,300,000 people annually, and this number is expected to double by 2025. The electric car is accordingly suggested as a substitute for cars fueled by an internal combustion engine, and a number of experts even herald the end of petroleum and diesel with this new invention.
The prominent issues regarding electric cars include high price tags, shorter mileage, and a lack of charging stations. These issues have been the main obstacles for the electric car industry to carve out a path to success. Fortunately, extensive efforts have been made to solve or mitigate these problems. First, governments around the world have been providing subsidy packages to lessen the burden of the high initial expense. Tesla Model 3, which is the sensational electric car model from Tesla Motors, an American electric vehicle company, costs \40 million, but people in Korea can purchase it for approximately \20 million if they receive a subsidy from the local government. Second, the distance on a single charge is relevant to the energy density of the battery. This aspect is improving significantly through R&D (research and development), and it has developed nearly five times faster annually since the 1990s. Lastly, the number of charging stations is constantly growing with full support from governments around the globe.
Tesla Model 3, a Long-Awaited Electric Car
Tesla Motors is one of the corporations that has made significant contributions to the electric vehicle industry. The company was established in 2003 and in 2008 released its first electric sports car “Tesla Roadster,” which is powered only by a lithium-ion battery. At that time, the car cost more than $100,000, and it needed 48 hours for a full charge. Eight years after the failure in 2008, Tesla launched its new model called “Model 3,” and it attracted more than 320,000 preorders in March 2016. It raised worldwide attention by acquiring sales of more than $13 trillion in only 36 hours. More than 800 people waited in line to make their preorders, each with a deposit of $1,000, even though the product would only be available starting in 2017. “Model 3” appealed to many people with its improved performance and more affordable price. It can run up to 346 kilometers on a single charge, which means people can shuttle between Seoul and Daejeon. Moreover, it costs $35,000, which is approximately half the price of “Model S,” a previous model. The luxury strategy of Tesla also lies behind the notable success of “Model 3.” Instead of the previous small electric cars, Tesla advertised “Model 3” as “a luxury car with quick acceleration.” Foreign media even stated that Tesla has changed the paradigm of the electric vehicle market, just as the iPhone did in the electronics market.
|teslamotors.com/Tesla’s “Model 3”|
The Electric Car Market in Korea
After the introduction of a bill regarding a green growth project in 2010, policies encouraging the use of electric cars have increased. The Korean government also started a subsidy package for electric car purchases in 2013.
Jeju Island, Designated as a Special Zone for the Electric Car
Jeju Island, located off South Korea’s southwestern coast, is s p e a r h e a d i n g t h e domestic electric car market. Jeju Island has been promoting i t s “Carbon Free Island 2030 Project” since 2012, and the island holds approximately 3,000 electric vehicles, the largest number in the nation. Electric cars on Jeju Island are also offered through rental car services, and the percentage of operated electric cars reaches 70 to 80 percent. This is a significant number considering that only 50 percent of gasoline and diesel cars are operated. Jeju Island, in fact, is an optimal region to drive an electric car. First, the coastal road covering the whole island reaches only 176 kilometers, which makes it easy to drive electric cars because of the short distance to travel on a single charge. Second, the island’s high and low landscape works as another factor. The mileage of electric cars falls when they ascend a hill due to the increased friction, and vice versa. Considering the island’s terrain, electric cars can be operated efficiently and flexibly. Jeju Island has the great ambition of altering all 377,000 cars on the island to electric cars by 2030.
|jejusori.net/Electric Car Charging Station on Jeju Island|
Electric Car Sharing Service: Nanum-Car
The city of Seoul has relatively less electric cars compared to Jeju Island. Instead, the city started the program “Nanum-car” in May 2013, which is a car sharing service that allows users to borrow cars, including electric vehicles, when they need them. It was offered as a means to improve people’s recognition of electric vehicles. People can choose from approximately 190 electric vehicles through four operators, including Citycar. In order to use this service, members need to enroll their driver’s license and credit card along with signing up for membership. The service is provided through both the Internet and mobile applications, enabling users to easily make reservations and identify the location of charging stations.
Problems in Korea’s Electric Car Market
The electric car battery technology in Korea, developed by Samsung SDI and LG Chemistry, is rated to retain supremacy around the world. The Korean government is putting considerable effort into the electric car industry through initiatives such as the subsidy package program. Despite this effort, however, it is difficult to see electric cars in Korea outside of Jeju Island. A mere 5,767 electric cars were registered in Korea at the end of last year. The effect of the subsidy package is doubtful, as evidenced by the fact that the number of people who signed up for the subsidy was lower than the government’s expectation. Korea’s lagging electric car market stems from two main issues: the lack of practicality of electric cars produced in Korea and the lack of charging infrastructure.
Korean Electric Car’s Short Mileage
In contrast to Tesla’s “Model 3” that allows drivers to cover 346 kilometers on a single charge, electric cars produced in Korea can drive less than 150 kilometers. Due to this impracticality, Korean electric cars show poor sales results. The number of Korean electric cars sold in the first quarter of this year was only half the number from last year. It was not an explosive growth, but rather a step backward. A number of experts point out that corporations are focusing too much on convenience in the performance of vehicles rather than extending the mileage.
Lack of Charging Infrastructure
The lack of charging stations is one of the factors that stops people from purchasing electric cars, since they will have difficulty in finding a station even if they have an electric car. The number of charging stations for electric cars in Korea was reported to be just 337 in January of 2016, which is less than 3 percent of all gas stations. What makes the situation worse is that the management of existing stations is not carried out properly due to the absence of an administrator. Charging stations in Jeju were recently reported as having frequent breakdowns, mainly because of the strong sea wind.
The Korean government made a decision to impose a fee for charging an electric car in order to draw participation from corporations. The government intends to expand the charging infrastructure, but the majority of electric car companies have a negative view on this decision. They claim that it is an impetuous decision considering that Korea’s electric car industry is still in its early stage. Given the high expense of constructing charging stations, there is a limit or a disincentive for private enterprises to expand facilities, so the government should come forward to establish the sufficient and necessary charging infrastructure.
The creation of charging infrastructure is the most urgent issue facing the Korean electric car industry today. Moreover, the government should focus on providing various policies, not just subsidy packages, to encourage the use of electric cars. The policy can include the obligation of installing a certain amount of charging infrastructure at gas stations and malls. Norway is referred to as the heaven of the electric car market, mainly due to the active incentive policies of the government. The government has provided a consumption tax exemption regarding electric cars since 1990, and even the value-added tax of electric cars has been exempted since 2001. People driving electric cars can use bus-only lanes, and toll roads or parking lots operated by the local government are also offered for free. The policies in Norway can be a model for Korea to follow in order to boost the domestic electric car industry.
Many changes have occurred in the history of the motor vehicle industry. Norway and the Netherlands presented a bill forbidding the sale of motor vehicles that utilize the internal combustion engine. The Secretary of the Ministry of Transportation in India also declared his intention to make the transportation industry solely use electric cars by 2030. Despite this growing tendency to migrate toward the electric car industry, numerous people are highly skeptical about this trend, especially in Korea. In order to gain presence in the electric car market, the Korean government should put concerted effort in encouraging the use of electric vehicles.
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