Korean Government Planning to Introduce Graded Method to Subsidy for Electric Vehicles in 2018

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South Korea’s support system on subsidy for electric vehicles is going to be changed since it was established 6 years ago. Subsidy, which was given to all electric vehicles collectively, will be given based on mileage or kW/km starting from next year. For example, while entire subsidy will be given for GM’s ‘Bolt’, partial subsidy will be given for Tesla’s ‘Model S’ that has low kW/km. It is likely that this change will prevent wasting budget for ill-advised plans and give motives to automotive manufacturers to enhance their technologies to increase kW/km.

According to electric vehicle industries on the 31st, Ministry of Environment (ME) is going to introduce graded method for subsidy that applies energy efficiency and battery capacity of electric vehicles to ‘2018 Guideline for Promoting Electric Vehicles’.

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This change is taking place since subsidy support for electric vehicles was implemented in 2013. South Korean Government is implementing this change in order to prevent any ill-advised misuse of budget as variety of new domestic and foreign electric vehicles are expected to be released starting from next year and to maximize effects of South Korean Government’s eco-friendly policies. This will also filter out any electric vehicles from certain automotive manufacturers that have been taking advantage of benefits through same electric vehicle model without any new technologies.

Until now subsidy was given if electric vehicle passed Korea Environment Corporation’s evaluation. However starting from next year, amount of subsidy will be calculated after applying difference in mileages in summer and winter after single charge.

Also electric vehicles that have higher mileages by simply increasing battery capacity will not receive entire amount of subsidy as efficiency in kW/km according to weight of a car will be reduced just by physically increasing battery capacity.

Variety of South Korean and foreign electric vehicles carried out a parade around Jongang intersection and Jonggak intersection that was recently hosted by Daegu.

Variety of South Korean and foreign electric vehicles carried out a parade around Jongang intersection and Jonggak intersection that was recently hosted by Daegu.

As next year’s subsidy from South Korean Government for electric vehicles is likely to be around $12,472 (14 million KRW) just like this year, it is likely that GM’s Bolt will receive entire amount of subsidy due to its excellent kW/km and driving performance. However it is predicted that it will be difficult for Hyundai Motor Company’s ‘IONIQ Electric’, which has lower mileage than Bolt, and Tesla’s ‘Model S’, which weighs around 2 tons, to receive entire amount of subsidy.

However it is likely that subsidy support for expensive electric vehicles, which recently caused a controversy, will not be included to standards of subsidy in 2018 as limitation of prices in order to reduce carbon emission can actually be an obstacle in promoting electric vehicles from competent government department’s aspect.

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ME is also going to partially improve ways of paying subsidies. Until now even when electric vehicle is not released in a corresponding year, ME has given grace period of up to 2 months into following year when it comes to paying subsidies. However starting from next year it is looking into a way of paying subsidy according to actual release dates of electric vehicles in order to root out some manufacturers’ acts of preoccupying subsidies without actually delivering their vehicles.

ME is planning to introduce ‘2018 Guideline for Promoting Electric Vehicles’ that has such information as its main points.

“Because actual official mileage and mileage in winter are different from each other, we are planning to improve our subsidy system starting from next year after applying complaints from owners of electric vehicles.” said a representative for ME. “We are going to officially announce final proposal that materializes detailed information next month at the earliest.”

On the other hand, official mileages of GM’s Bolt (battery capacity = 60kWh), Hyundai Motor Company’s IONIQ Electric (28kWh), and Tesla’s Model S (90kWh) are 383km, 191km, and 378km respectively. Looking at mileage and kW/km out of electric vehicles that are released in South Korea, Bolt has the highest mileage and kW/km.

Staff Reporter Park, Taejoon | gaius@etnews.com

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