South Korea’s EV Segment Growth in 2021 uplifted the PMI to Six Month High in January 2022
- 03-Feb-2022 12:47 PM
- Journalist: Kim Chul Son
Since the third quarter of 2021, the manufacturing activities in South Korea grew at the sharpest pace as the production output picked up especially in the fourth quarter of 2021 after the South Korean authorities eased the COVID restrictions. Although, the persistent supply chain woes from the semiconductor and raw material weighed on the outlook.
The operational loads rose for the first time in four months in January, owed to the new export orders for South Korean manufactured goods rebounded to the expansionary territory of 50.4 from 49.5 on a month-on-month in January. This market movement is attributed to improving demand from China, Europe, and the US as the global trade and arbitrage persistently recover from the impact of the COVID pandemic. According to the cumulative analysis of the data released by the South Korean Ministry of Transport and Tourism, the Ministry of Land and Infrastructure showcased that the registered motor vehicles estimated at 24.91 Million with a growth of 2.2% year-on-year in the Automotive Sector. Whereas, the Electric Vehicles exceeded 100,000 units with observing an increment of 115% on a year-on-year.
This development in the automotive sector is one of the major causes that driven the PM Index in the South Korean market, but the supply chain disruption proportionally weighed in the production cost. After COP 26 pushed the transition towards a greener economy, supported the exceptional gains in the offers for EV batteries raw materials coupled with the semiconductor shortages. In response, numerous players in the automotive and energy sector had paced up the manufacturing of batteries units to sustain the appetite amidst the rising demand, recently LG New Energy and General Motors will jointly build the fourth battery plant and announce specific plans shortly as the specific matters have not yet been finalized.
As per ChemAnalyst, the EV segment is one of the fastest-growing segments on a global stage and this trend is majorly focused to reduce carbon emission and dependence on fossil fuels by substituting the internal combustion vehicles (ICV’s). Whereas, the raw material prices for EV batteries exceed the projected margins by 22-34% in the offers throughout the fourth quarter of 2021.