South Korean President Moon Jae-in speaks at an LG Energy Solution plant in the city of Cheongju Thursday. Photo by Yonhap/EPA-EFE
July 8 (UPI) -- South Korea launched an ambitious plan Thursday to become the world's leading maker of electric vehicle batteries by 2030 by investing as much as $35 billion to incentivize innovation in the industry.
President Moon Jae-in said Thursday at LG Energy Solution Co.'s plant in Cheongju, North Chungcheong Province, that Seoul stands firmly behind local battery manufacturers who compete in a market that has doubled in size in the past five years, Newsis reported.
"The key to carbon neutrality lies in batteries," Moon said. "The development of battery technology, which will be the core of future transportation, including electric vehicles, is a key driving force that will transform the Korean economy."
Moon said that by 2030 the market is expected to reach $350 billion, or eight times the current market size.
The global battery market "presents a great opportunity and a challenge at the same time," he added. Moon said battery development would be integral to Korea's technology strategy "along with semiconductors and vaccines."
The South Korean leader also said that research and development investments could access up to a 50% deduction on taxes. About $435 million will go toward supporting large-scale R&D projects focused on "next-generation batteries," according to Moon.
A mix of public and private capital reserves will be consolidated to create an 80 billion won or $70 million fund to support the industry, Korea Economic Daily reported Thursday. The fund will be invested in R&D support for small and medium-sized battery makers, the report said.
South Korea is facing stiff competition from China in the battery market. The two countries each control about 40% of market share, according to the Korea Herald on Thursday. Chinese and Japanese firms largely monopolize key materials for battery making, the report said.
Moon has pursued a policy of reducing carbon emissions under Seoul's "Green New Deal," a nod to U.S. policy proposals of the same name. South Korea's Green New Deal has set a target of 1.13 million electric vehicles and 200,000 hydrogen-powered fuel-cell electric vehicles on Korean roads by 2025.