This study analyzes e-mobility policies of the European Union (EU) and its major member states. Through the analysis the study provides policy implications for the Korean government in promoting eco-friendly automobiles, and strategic insights for Korean companies aiming to access the EU market.    The automobile industry of the EU faces multiple challenges today. Aiming to achieve climate neutrality by 2050, the EU will have to reduce greenhouse gas emissions of cars by expanding the use of renewable energy, while maintaining the industry’s competitiveness. Currently, the EU remains comparatively weak in the market for eco-friendly automobiles. The share of European brands in the world’s eco-friendly car market is only 12%. Moreover, Europe is lagging behind Northeast Asian countries, including South Korea, in battery packs and hydrogen fuel cells technology and production. Upon this background, the EU is endeavoring to support the eco-friendly automobile industry to reduce overseas dependence on core components, and to expand the distribution of eco-friendly cars. On the EU level, the EU Commission is playing a pivotal role in laying the basis for the eco-friendly automobile industry. It has announced the European Green Deal and adopted the New Industrial Strategy for Europe. A roadmap has been presented for supporting the eco-friendly automotive industry through EU-level strategies in the areas of batteries, hydrogen, and e-mobility. Meanwhile, cooperative alliances are being formed in the battery sector, including the European Battery Alliance (EBA), BatteRIes Europe, a technology innovation platform, and the Battery 2030+ initiative. The European Clean Hydrogen Alliance has been formed to promote hydrogen fuel technology. In addition, the EU protects and supports the regional e-mobility industry using indirect methods of regulation, such as emission regulation, waste regulation, and the establishment of standards. Financial support for research innovation is being provided through the Horizon Europe and InnovFin initiatives, and through mobilization of the European Strategic Investment Fund (EFSI), while infrastructure investment is actively being carried out through the Connecting Europe Facility (CEF). On the EU member state level, Germany, France, Sweden, and the four Visegrad states (Poland, Hungary, Czech Republic and Slovakia) were selected for case studies, on the basis of their importance in the EU’s automobile industry. Germany, France, and Sweden are all actively using subsidies and tax regimes to expand the distribution of eco-friendly cars. Germany has introduced a new e-mobility law to facilitate the administrative process of using eco-friendly cars. Germany's eco-friendly automobile industry support policy incorporates suggestions from the industrial sector, while providing support for research and production of battery cells, as well as R&D projects in hydrogen technology. In the case of France, it is notable that the government, as a major shareholder, is actively participating in the management of major manufacturers with a view to protecting jobs and fostering the eco-friendly automobile industry. Sweden has the highest sales volume of eco-friendly cars in Europe thanks to government policies to encourage consumption. The V4 countries are gaining importance as emerging powers of the European automobile industry, with a large number of global companies entering their markets, both as primary and secondary suppliers.    Through the analyses, the study draws three main implications. First, it is important to actively participate in the process of establishing standards through technical cooperation with Europe. For Korean companies it is important to work closely with EU companies and institutions to reflect their opinions when setting battery technology standards. In addition, Korean companies, academia, and the government should actively participate in discussions on expanding the use of hydrogen technology in Europe, so that well-advanced Korean hydrogen technology can penetrate into the newly-formed EU market.    Second, expanding the supply of eco-friendly cars in Korea through improvement of the subsidy system can be considered. Policy makers could consider expanding the scope of subsidies to include leased or used eco-friendly vehicles, to the extent of available budget levels. Another option to consider would be modifying the eligibility criteria to incentivize transition to eco-friendly cars, rather than focusing on scrappage programs. In addition, it is necessary to consider ways to incorporate CO2 emission into the calculation of automobile taxes. Finally, further cooperation with the V4 countries is necessary to improve access to the EU market. To make more efficient use of the advantageous position already formed in the V4, Korea needs to implement a step-by-step cooperative framework with the V4 for the development of future mobility. Possible directions would include establishing joint R&D centers for developing electric vehicles and batteries, or forming a global consortium in the field of hydrogen cars and charging facilities.

 

   As friction between the U.S. and China intensifies, this poses a huge burden on the Korean economy, which is highly dependent on China. Under these circumstances, questions are being raised about whether Korea can continue its strategy of aligning with the United States on security issues and with China in the economic sector. This study seeks to clarify what the main issues of friction between the U.S. and China are, and what positions and principles Korea should adhere to concerning each issue.
   The U.S.-China friction can be seen as arising from the clash between the U.S.’ vision of “America First” and the “China dream.” Xi Jinping’s leadership, which was launched in 2012, presented China’s dream of transitioning from an economic and military power to a great power. The U.S. administration recognizes this dream as a threat and challenge to the U.S. and is pressuring China. China perceives this pressure applied by the U.S. as an attempt to undermine its key interests and responds accordingly. The Trump administration defined the situation as a long-term strategic competition between the two systems and declared a “competitive approach” to China in a report titled “U.S. Strategic Approach to the People’s Republic of China” released in May 2020. In another report, “The Elements of the Chinese Challenge,” released by the U.S. Department of State in November 2020, the U.S. and the world are described as facing a new era of “great power competition” caused by the Chinese Communist Party. A U.S. congressional report released in December 2020 also described this as a “strategic competition” between China and the United States. In response to U.S. pressure, China recognized the conflict between the U.S. and China as a challenge to its development rights and declared a long-term war, regardless of the outcome of the U.S. presidential election. It has adopted a “dual circulation” strategy that puts large-scale domestic circulation first as the basic direction of long-term response and mutually drives both domestic and international circulation.
   In this study, the issues between the U.S. and China were divided into regulation of unfair practices on the part of China, China’s strategy to become a “strong country” with world-class forces amid the U.S.-China technology decoupling, and the U.S.-China strategic competition over ideology and values. First is the conflict over subsidies, intellectual property rights, developing country status, cyber security, and environmental issues raised by the United States. The second issue is China's strategy to become a strong country and decouple from U.S. technology, leading to the China Manufacturing 2025 initiative, Military-Civil Fusion (MCF) strategy, China Standard 2035 project and U.S.-China competition over network security. The third issue involves U.S. efforts to check the Belt and Road Initiative (BRI), perceiving this as a strategy to expand Chinese influence in the Asia-Pacific region. The U.S. recognizes the Belt and Road Initiative as both an economic challenge for the U.S. and a security challenge, and keeps China’s influence in check by pursuing the Indo-Pacific strategy. The fourth is pressure on China based on universal values. The U.S. is expanding its pressure on China by politicizing the issues of its party-state system, democracy, human rights, religion, and the South China Sea dispute.
   The U.S.-China friction can be both an opportunity and a threat to Korea, which is highly dependent on the U.S. and China. In the short term, China will be able to provide Korea with new opportunities if it improves external openness and transparency and takes a domestic- oriented growth strategy. However, in the process of U.S. pressure on China, Korean companies tied to the value chain will face immediate difficulties in exporting to China. It is also impossible to rule out the possibility of another “THAAD situation” unfolding as the U.S. and China pressure Korea to choose a stance on particular issues. In the mid- to-long term, should China respond by increasing its independent self- reliance in technology, this could pose a threat if China develops domestic alternatives to Korean imports. However, if China responds by opening up and expanding cooperation with neighboring countries in new industries, this could be a new opportunity for Korea. If the friction between the U.S. and China is prolonged, the relationship between Korea and China is expected to enter a new period of transition, where individual events develop into a phase and structural transformation begins. It will be necessary to assess the threats and opportunities accompanying the friction between the U.S. and China, and to prepare effective response strategies.
   Faced with pressure from the U.S. and China to choose one side, Korea will have to establish a set of principles to apply in situations where it proves impossible to maintain a stance of strategic ambiguity. This study presents new directions and tasks for Korea-China cooperation in the era of friction between the U.S. and China, namely in the areas of: adjusting Korea’s dependence relations with China, stabilizing the value chain in preparation of the U.S.-China decoupling, East Asian regional cooperation, and response measures to changes in China's strategy. In particular, in this study, an online survey of Chinese experts in Korea explored the direction of Korea’s response to U.S. and Chinese pressure to take one side. It is necessary to redefine China’s strategy by comprehensively judging China’s influence on the Korean economy, the future potential of the Chinese market, and the possibility of cooperation. First, Korea should redefine its position on each issue based on: the principle of securing national interest and minimizing damage, the principle of a fair market economy, respect for universal values, and the principle of multilateralism. Second, a new strategy is needed amid rapidly changing U.S.-China relations. Despite the friction between the U.S. and China, there is no significant change in China’s importance as a market and the importance of the U.S. as a crucial security ally. In this regard, the current structure of aligning Korea’s position with China in economic issues and with the U.S. on security issues will continue, but depending on the pending issues of friction between the U.S. and China, principles and response strategies need to be determined on a case-by-case basis.