SEOUL (Reuters) - South Korea plans to boost annual production of environment-friendly cars by more than ten-fold by 2020 to cut carbon emissions and tap into a new export market, the country’s trade ministry said on Tuesday.
The Ministry of Trade, Industry and Energy said in a statement it aims to boost annual production of environmentally friendly vehicles - including electric and hybrid vehicles - to 920,000 by 2020 from 78,000 in 2015. The domestic market share of such cars will rise to 20 percent of new vehicles sold by 2020 from 2 percent in 2015, the ministry said.
The push comes as efforts around the world to reduce greenhouse gas emissions spur demand for eco-friendly vehicles. Ministers from nearly 200 nations are currently meeting in Paris to hammer out a binding deal to brake rising world temperatures this week.
Hyundai Motor Co and Kia Motors Corp, South Korea’s top automakers, are already trying to break into the market by developing their own environment-friendly cars.
Hyundai said on Monday it is launching a hybrid version of its new Ioniq model in South Korea in January, with plug-in hybrid and electric versions to follow at a later date.
Usually when the South Korean government announces such initiatives it is done after discussions with the private sector.
The government will invest 150 billion won ($127.72 million) over the next five years for research and development of key technologies. It will also offer subsidies for buyers of environmentally friendly cars and increase the number of charging stations for such vehicles to spur adoption.
South Korea’s trade ministry said its plan will reduce greenhouse gas emissions by 3.8 million tons of CO2 and create 93,000 jobs between 2016 and 2020. It also said environment-friendly cars could amount to 18 trillion won ($15.32 billion) in exports for the country by 2020.
Reporting by Se Young Lee; Editing by Muralikumar Anantharaman