Posted on 15 Dec 2023
South Korea’s government plans to provide over KRW 38 trillion ($29 billion) as policy financing to strengthen the country’s EV battery supply chain in the five years from 2024, Kallanish reports.
According to the South Korean Ministry of Economy and Finance (MoEF), the main idea of the scheme is to diversify the EV battery supply chain to reduce reliance, especially in terms of key materials, on other countries, including its big competitor China. This will be mostly done by increasing the country’s own reserves and improving its EV battery recycling capability.
Chu Kyung-ho, minister at MoEF, said in an emergency economic meeting on Wednesday: “To stabilise the secondary battery supply chain, we will expand loans, guarantees, and insurance to related companies, and support interest rate and insurance premium reductions for investment in facilities in North America in response to the US Inflation Reduction Act (IRA).”
“We plan to actively support facility investment in promising rechargeable battery companies and to develop core technology such as all-solid-state batteries. We will also shorten the patent examination from the current 21 months to 10 months by prioritising rechargeable battery patents,” he added.
In addition, by 2026, the government plans to invest and establish storage facilities for vital raw materials including lithium and cobalt to support key material reserves and prevent supply chain crisis. The storage centre is expected to be located at a Saemangeum industry complex and the budget is about KRW 240 billion.
The government expects key minerals enough to produce 170,000 EV/year (half of the annual production volume of Hyundai and Kia together) can be secured if all used batteries are recycled appropriately.
“In an effort to step up the competitiveness of the secondary battery industry, the government will support the stabilisation of the essential minerals’ supply chain by introducing a 3% tax deduction for investment on overseas mining rights. Furthermore, used batteries will be systematically managed through a three-stage safety inspection system that consists of performance evaluation, pre-distribution and post-distribution inspections,” MoEF says in a statement.
At the meeting, the country also announced its goal to lower graphite and magnetic rare earth metals dependence on other countries from last year’s 70% to under 50% by 2030.
Additionally, South Korea is also said to be planning to create a KRW 1 trillion fund for industry growth and invest KWR 73.6 billion in relevant research and development projects. Fully autonomous driving will be backed by improved laws and systems and the introduction of separate licences for autonomous vehicles, the ministry noted.
Source:Kallanish
