The Reversal Effect of High Oil Prices... EU Internal Combustion Engine Ban Benefits K-Battery

EU Parliament Approves Ban on Internal Combustion Engine Car Sales by 2035
Electric Vehicle Sales in Europe to Grow 20% Annually Until 2030
"K-Battery Has Opportunity to Have Two Hearts in Europe Following the US"

[Asia Economy Reporter Ji Yeon-jin] As the European Union (EU) bans the sale of internal combustion engine vehicles starting from 2035, electric vehicle battery stocks are emerging as beneficiaries.

According to the financial investment industry on the 11th, the EU Parliament passed the European Commission's amendment to reduce carbon dioxide emissions from new internal combustion engine vehicles by 100% in a plenary vote held the day before, with 339 votes in favor, 249 against, and 24 abstentions. This amendment makes it impossible to sell fossil fuel-powered passenger cars and vans within the EU starting from 2035. A proposal to partially allow sales was also raised but was rejected by the parliament.

The EU will initiate the approval process with member countries based on this proposal. EU energy policies require the consent of each country to be enacted. Although Eastern European countries opposed it, new electric vehicle-related factories are concentrating in these countries, so the internal combustion engine vehicle sales ban law is expected to be enacted smoothly. Already, the United Kingdom has decided to ban the sale of internal combustion engine vehicles starting from 2030. With the EU joining, the development of new internal combustion engine vehicles across Europe will effectively cease after 2025, and the number of new model launches is expected to sharply decline.

All newly sold vehicles are expected to switch to electric or hydrogen vehicles. Last year, electric vehicle sales in Europe reached 2.26 million units. Eugene Investment & Securities forecasts that electric vehicle sales in Europe will grow to 5.58 million units in 2025 and 11.63 million units in 2030, with an average annual growth rate of 20% until 2030. Researcher Han Byung-hwa of Eugene Investment & Securities said, "Electric vehicle sales in Europe, which had recorded high growth over the past three years, have recently slowed due to supply chain issues," adding, "The EU's legislative decision to ban internal combustion engine vehicle sales is significant because it regulates manufacturers rather than consumers, leaving only electric vehicles as an option. Due to the sharp decline in the attractiveness of internal combustion engine vehicles caused by the surge in oil prices from the Russia-Ukraine war, the policy is expected to receive high approval."

He added, "Despite the slowdown in the European market, K-battery companies are compensating for the growth gap through the activation of the U.S. electric vehicle market," emphasizing, "If the European electric vehicle market can achieve an average annual growth rate of 20% until 2030, it will be like beating with two hearts, the U.S. and Europe, which could increase the attractiveness of K-battery companies once again."