Industrial Policy and the Development of the Electric Vehicles Industry: The Case of Korea

The Korean government has stimulated R&D activities of the electric vehicle (EV) industry and promoted commercialization of EVs. Korea’s EV industry developed rapidly. The industrial policy to promote the EV industry provides implications to the automobile producers. First, producers not developing EV technologies may lag behind in the market. Second, it is important to improve the efficiency of their R&D expenditures. Third, it may be effective for the less advanced EV producers to cooperate with foreign producers. Fourth, the EV producers are needed to cooperate with the rechargeable battery producers. Fifth, success of the EV industry will depend on the probability of reducing the production cost. Sixth, the government should prepare R&D support measures targeting promotion of SMEs in the EV industry. Seventh, the government wishing to promote the EV industry needs to define the responsibility of each Ministry and establish a system resolving conflicts between the Ministries efficiently.