▲Hyundai Motor Company's Ioniq 6 (Image source: Hyundai Motor Group)


Demand for electric vehicles is growing, with automakers focusing on developing and selling electric vehicles.
BMW: "We can achieve carbon neutrality with internal combustion engine vehicles powered by e-fuel."

[Editor's Note] As calls for stronger regulations to reduce CO2 emissions in the transportation sector grow louder, electric vehicles (EVs) have begun to grow rapidly. Market research firm ReportLinker projects that the EV market will reach 3,500 trillion won by 2030. The EV Trend Korea and InterBattery events held at COEX in March attracted approximately 46,000 and 60,000 visitors, respectively, demonstrating global interest in EVs. While demand for EVs is steadily increasing thanks to government subsidies, increased battery capacity, and various new features, risks such as battery thermal runaway and a lack of charging infrastructure remain obstacles. Automakers also differ in their views on the era of 100% EVs. While companies including the Hyundai Motor Group have invested trillions of won in the development of electric vehicles, leaving internal combustion engine vehicles on the back burner, BMW has opposed the EU's environmentally friendly policies, arguing for the coexistence of electric vehicles and internal combustion engines.

■ Electric vehicles are the future

In 2020, global electric vehicles (BEVs) accounted for only about 2.22 million units, or 2.9% of all completed vehicles, but grew by 115% to about 4.78 million units in 2021, solidifying their position as a clear trend.

According to the Korea Automobile Research Institute, global vehicle sales in 2022 recorded 80.63 million units, a 1% decrease, but electric vehicle (BEV) sales recorded 8.02 million units, a 68% increase year-on-year, accounting for 9.9% of total sales.

In particular, electric vehicles showed remarkable growth, with China, Europe, and the United States accounting for 93.3% of global electric vehicle sales.

Last year, electric vehicles sold more than 5 million units in China, which has a strong domestic market, showing an 86.1% increase over the same period the previous year, ranking first in the global electric vehicle market.

In the US, sales of approximately 800,000 units increased by 58.9% year-on-year, driven by steady sales from Tesla and Ford and the expansion of new models by the Hyundai Motor Group.

Europe also showed steady demand for electric vehicles, with over 1.6 million units sold in 2022. However, the growth rate (25.5% increase year-on-year) was lower than expected before the invasion due to the increase in electricity prices caused by Russia's invasion of Ukraine.

China ranked first again last year, following its 2021 performance, based on its domestic market.

This growth is driven by global efforts to reduce automobile carbon emissions in line with strengthened environmental regulations.

Europe will ban the sale of internal combustion engine vehicles by 2035. The electric vehicle market could grow even faster, with President Joe Biden announcing a policy to increase electric vehicle sales to 67% of new vehicle sales in the United States by 2032.

In response, automakers have strengthened their electric vehicle ecosystems and announced the discontinuation or reduction of sales of internal combustion engine vehicles.

Hyundai Motor Group announced on the 12th that it will invest 24 trillion won in the domestic electric vehicle sector by 2030, focusing on research and development, including building a new electric vehicle-only factory, developing a next-generation electric vehicle-only platform, and expanding its product lineup.

▲Kia EV9 (Photo source: Hyundai Motor Group)

Hyundai Motor Group plans to have a total of 31 electric vehicle models in its lineup by 2030, while Kia plans to launch the EV9 in 2023 and Hyundai plans to launch the Ioniq 7 in 2024.

Hyundai Motor Group also announced that it would stop releasing new internal combustion engine vehicles in its Genesis lineup starting in 2025, and has set a goal of ending sales of internal combustion engines by 2035 and achieving full electrification by 2040.

Mercedes-Benz announced in October last year that it would convert all its vehicle models to BEVs by 2030, ahead of Hyundai Motor Group.

To implement this strategy, Mercedes will invest 40 billion euros between 2022 and 2030, developing electric vehicle architectures and batteries, building charging systems and infrastructure, and expanding its electric vehicle production network.

Last year, Mercedes unveiled the 'New EQE SUV', which applied its own developed electric vehicle architecture, at the digital world premiere.It is showing an active attitude toward electrification and has announced plans to unveil three types of electric vehicle architectures: △MB.EA △AMG.EA △VAN.EA in 2025.

BMW opposes ban on sales of internal combustion engines

BMW is also working on electrification, but it has a very negative view on the end of the internal combustion engine.

According to German media outlet Handelsblatt in March, BMW is opposed to all-electric vehicles and will continue to improve its gasoline and diesel engines over the next decade, updating its 4-, 6-, and 8-cylinder engines as well as its diesel engines, which are still in demand.

▲Oliver Zipse, BMW CEO (Photo credit: BMW)

BMW CEO Oliver Zipse cited the fact that essential raw materials for electric vehicle batteries are produced only in a few countries as the reason for BMW's resistance to the ban on internal combustion engine vehicles.

At the '2023 Global Battery Mineral Seminar' held at COEX on the 17th, Jeong Dae-han, head of the Mineral Resources Team at the Ministry of Trade, Industry and Energy, said that lithium is deposited in large quantities in Chile and Australia, and that China is processing and processing it for use as cathode materials. China also has a global production share of 60% of rare earth elements and 84% of tungsten.

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In Europe, there are growing concerns that the situation will only benefit China, which is expanding its electric vehicle portfolio and leading in key minerals.

BMW also believes that it is unreasonable to consider electric vehicles eco-friendly without addressing the significant carbon footprint of batteries.

Germany's recent opposition to the EU's policy of banning the sale of internal combustion engine vehicles by 2035 appears to be giving BMW a boost to its strategy.

The German government stated that sales of internal combustion engine vehicles using green hydrogen obtained through water splitting and E-Fuel, a carbon dioxide synthetic fuel, should not be banned without considering such cases, even though they can also achieve carbon neutrality.

The Korea Automobile Research Institute also published an industry trend report in August of last year stating that E-Fuel has a CO2 reduction effect and can be used in existing internal combustion engine infrastructure, so it can be considered as one of the means to achieve carbon neutrality.

However, although there is room for the EU to partially recognize the CO2 emission reduction effect of internal combustion engine vehicles using E-Fuel, it is expected that mass production of E-Fuel will be difficult in the short term, so it is recommended not to have excessive expectations.

There were also opinions that the pace of transition to the electric vehicle era should be controlled.

The Korea Automobile Manufacturers Association and the European Automobile Association agreed at a regular meeting held in May last year that it is necessary to maintain technological neutrality between electric power sources such as E-Fuel, hydrogen vehicles, and electric vehicles and internal combustion engine technologies. They also agreed that since fuel efficiency and greenhouse gas regulations and the mandatory sales system for electric vehicles are overlapping regulations, one of the two should be abolished or the regulatory penalties should be reasonably adjusted.>