South Korea revs up plan for electric car hub

South Korea plans to mass-produce electric automobiles for the domestic market by 2011 in a bid to become the world's fourth-largest maker of green cars.

The initiative fast-tracks a previously announced target by the government to commercialise Korean-made electric vehicles by 2013, and entails an investment of 400bn won (US$342.6m) by 2014 on research and development for high-performance batteries and other related systems.

The Ministry of Knowledge Economy last week outlined a plan that would see the country capture 10 per cent of the global market for zero-emission plug-in cars by 2015. It also aims to have all-electric vehicles comprise 10 per cent of domestic sales of small-size cars by 2020.

By initially targeting the local market, the ministry said it hopes to have one million electric cars on the nation's roads, which would result in annual estimated savings of $429m in energy imports and a reduction of three million tons of CO2 emissions per year.

South Korea is trying to cut its heavy dependence on foreign energy sources, which supply 97 per cent of its power needs. Oil comprises more than half its energy imports.

A senior government official told Yonhap news agency that tax breaks or buyer subsidies may be launched to help boost local demand for electric cars. Hybrid and all-electric autos generally cost 30-40 per cent more than conventional vehicles, and experts believe incentives will be required to stimulate the market until economies of scale are realised and costs come down.

The government said the initiative will help the domestic auto industry to better compete against rivals in neighbouring Japan, where Nissan and Mitsubishi plan to export all-electric cars within the next year.

South Korean auto maker Hyundai Motor last month debuted a prototype of its zero-emission i10 Electric minicar at the Frankfurt Motor Show. Production for the domestic market is slated to start in 2010.

It follows Hyundai's announcement in July that it would spend $3.2bn to develop environmentally friendly vehicles and reduce carbon emissions from its factories.