Korea’s revised subsidy plan to impact foreign EV makers

2024.02.07 14:36:01 | 2024.02.07 15:54:35

[Photo by Yonhap]이미지 확대

[Photo by Yonhap]

South Korea’s Ministry of Environment on Tuesday released a revised version of its subsidy policy on electric vehicle (EV) purchases, offering different support rates depending on multiple factors such as battery energy density.

Under the revised program aimed at providing safer and more environmentally friendly vehicles, different levels of subsidies on EV purchases will be offered depending on the vehicle’s energy density and recycling value. Purchases of EVs with higher energy density and environmental value will be eligible for greater subsidies.

Local EV manufacturers, including Hyundai Motor Co. and Kia Corp. are expected to benefit from the revision as their EVs are equipped with nickel-manganese-cobalt (NCM) batteries known for their higher energy efficiency and recycling value.

The program, however, is expected to give a disadvantage to Tesla Inc., known for its reliance on lithium iron phosphate (LFP) batteries.

LFP batteries, mostly Chinese-made products, are about 30 percent cheaper to produce than NCM batteries, but they have lower energy density and are considered less valuable in terms of end-of-life recycling.

By Hong Hae-jin, Park Je-wan, and Han Yubin

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