All South Korea's major municipal governments want to bring in Tesla to build a factory, after Elon Musk said last month that the country was one of the top candidates for building another factory in Asia.
The central government considers South Korea competitive enough to build a Tesla factory, as the country is home to major manufacturers of batteries and cell materials, such as LG Energy Solution Ltd. and L&F Co. In addition, the nation is also a free trade agreement (FTA) partner with Tesla’s key markets.
The Ministry of Commerce, Industry and Energy has completed gathering candidate site information for the Tesla plant from all 17 major local authorities, according to government and industry sources, the Korea Economic Daily reported. The ministry plans to send the received information to the company within this year.
“It is a step to give more information by providing more options to Tesla, although the company has already identified some sites,” said an official from the ministry. “We found some competitive sites that we have not even thought of before.”
Tesla currently only has one factory in Asia, located in China. Two more are located in the USA—in California and Texas—and one in Europe, in Germany.
Local authorities in South Korea see a Tesla factory as an unprecedented opportunity to increase the competitiveness of their regions. If the company is located there, it will attract investments not only from it, but also from other global companies.
Gangneung, a well-known tourist center on the east coast of the peninsula, is close to ports and has plenty of energy sources. Pohang, a key seaport, is home to POSCO, the world's sixth largest steel producer, and battery material factories such as EcoPro BM Co. Daegu reported that L&F, which supplies materials for Tesla's batteries, is located in the city, about 300 kilometers (186 miles) southeast of Seoul. The capital even hopes that Tesla will establish a national headquarters, facilities associated with rocket and spacecraft manufacturer SpaceX, and an R&D center, though it does not have enough sites to build an electric vehicle factory.
South Korean President Yoon Suk Yeol, aware of Tesla's plans to build another factory in Asia, asked Musk to build one in his country. Musk responded that the company sees the country as one of its prime locations for consideration. However, local experts noted that the auto market there is not large enough with a domestic sales forecast of 1.7 million units this year, while labor costs are higher than in other countries, especially in Southeast Asia, and unionized workers are tough. Therefore, South Korea does not have a high chance of becoming home to a Tesla factory.
© 2022, Eva Fox | Tesmanian. All rights reserved.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.