As Joe Biden -- who has made energy and climate policy a high priority -- has won the US presidential election, Korean businesses related to eco-friendly cars, green energy and bio are expected to gain momentum in the US market.

Earlier, the new president-elect pledged a $2 trillion plan to invest in eco-friendly infrastructure. He also promised to rejoin the Paris Agreement on Climate Change, which Trump withdrew from, and to push for carbon emissions to reach “net zero” by 2050.

As for green cars, Biden plans install 500,000 electric vehicle charging stations across the US by 2030. Bus production is expected to be converted to carbon-free electric buses, with 3 million official state cars being replaced by electric vehicles.

In line with the new policies, the nation’s largest automakers, Hyundai Motor and Kia Motors, are expected to boost the development of electric and hydrogen vehicles to take more shares in their biggest export market. Their EV sales performance in the US is not yet strong with sales of 4,242 units from January to September, compared to 127,661 units on the overall global market.

“The overall pie of Hyundai Motor’s electric cars is expected to be bigger than it is now with Biden’s win, although Tesla currently has a strong influence in the US EV market,” said Lee Ho-geun, a professor of automotive engineering from Daeduk University.

“If Hyundai is able to rapidly raise sales volume to more than 50,000 units in the market, production costs will go down by around 30 percent, having a positive impact on new car development.”

Hyundai Motor and Kia Motors are already heavily investing in electric vehicles and hydrogen cars. In July, Hyundai Motor Chairman Chung Euisun declared that the automaker would become a global leader by achieving more than 10 percent market share with 1 million electric vehicle sales in 2025. The carmaker plans to mass-produce 23 models of electric vehicles by 2025.

Korean battery companies LG Chem, Samsung SDI and SK Innovation, which have a combined 35 percent global market share, are also expected to benefit from US policies favorable to electric vehicles. LG Chem has battery production plants in Ohio and Michigan, while SK Innovation is building a battery plant in Georgia.

Korea’s solar power industry is also expected to gain momentum in the US market.

Biden said he would expand energy storage systems, including the installation of 500 million solar panels and 60,000 wind turbines by 2035.

Companies, such as Hanwha Q Cells and LG Electronics, which have a high share in the US home and industrial solar market, are expected to benefit either directly or indirectly, industry watchers said.

As of the first half of this year, Hanwha Q Cells’ US residential solar market share was 22 percent, and the commercial solar market share was 21.5 percent. During the same period, LG Electronics ranked second with 12.8 percent of the US residential solar market and fifth with 5.1 percent in the commercial solar market.

Biden as president of the US is also expected to spell widened opportunities for Korean generic and biosimilar drugmakers such as Celltrion, Samsung Biologics and Samsung Bioepis.

The president-elect has vowed in his pledges that not only would he resurrect Obamacare, but that he would even expand on it to ensure health care for all.

Obamacare -- officially the Affordable Care Act -- seeks to subscribe 97 percent of the US population to state-subsidized health insurance plans.

Biden also said that he would enable 70 million more elderly persons to join an existing private health insurance plan by lowering the eligible age by five years from the previous 65 to 60.

In order to foot the bill for such bold moves, it is almost an inevitability to seek to lower the cost of medicines.

The pharmaceuticals and biopharmaceuticals industry cautiously forecast that Biden’s regime will put more emphasis on cheaper copy drugs than blockbuster original drugs that can cost 10 times more.

Korean companies such as Celltrion and Samsung Bioepis, who are gaining an edge in the global domain for their popular biosimilars, may have an upper hand in the coming years.

“Lowered drug prices raise red flags for a possible decrease in research and development investments, but there may be an increased interest for generics and biosimilars,” KTB Investment & Securities analyst Lee Hye-rin said in a report.

“Furthermore, digital health care encompassing early diagnosis, precision medicine and telemedicine is anticipated to be on the rise,” Lee said.

“More public health insurance will lead to a spike in demand for affordable Korean biosimilars,” Huh Hye-min of Kiwoom Securities said, seconding the sentiment.

Another aspect of the Korean health care industry that may get the wind in its sails is for COVID-19 test kits and masks.

Unlike Trump, Biden seeks to seriously address the pandemic.

Biden’s initiative to ensure adequate availability of test kits nationwide and mandate the wearing of masks is hoped to prolong the export spark for “Made in Korea” supplies.

Currently, there are 19 products from 17 companies being distributed in the US after acquiring the necessary approval from the US Food and Drug Administration. The industry is upbeat that more approvals will be granted.

By Shin Ji-hye and Lim Jeong-yeo
(shinjh@heraldcorp.com) (kaylalim@heraldcorp.com)