South Korea Gets Aggressive With EV Incentives, Infrastructure
South Korea is now the fifth largest auto manufacturing company in the world. Its domestic automakers produced 1.8 million vehicles in the first 5 months of 2016. Over 60% of them were exported to foreign markets. Korea’s two largest manufacturers, Hyundai and Kia, make many hybrid and EV cars, but sell few of them domestically. The Korean public has little interest in such cars.
“The lack of domestic e-car infrastructure has been an impediment to e-car development and production in South Korea, but that will change from now,” Lee Won-joo, director of the Automobile Aerospace Division, told Bloomberg Business News Asia. That may soon change. South Korea is about to embark on an aggressive push to make electric and plug-in cars more palatable to local customers.
The plan includes development of an EV battery with energy density high enough to more than double the travel distance on a charge to 400 kilometers or nearly 250 miles. By 2020, high speed charging stations will become available at an average of one within a two-kilometer radius in the capital city of Seoul, with a population of 10 million. In addition, 30,000 slow charging stations will be strategically located at about 4,000 apartment complexes nationwide by 2020.
EV buyers will get other inducements, too. Starting this year, the tax paid at the time of purchasing an EV will be reduced. Drivers will also see cuts in insurance premiums, expressway tolls, and parking fees. The standard one time government subsidy available to EV buyers was increased to $12,100 from $10,400 as of July 8.
According to Global EV Outlook 2016 released by the International Energy Agency, market share for EVs in South Korea was a paltry 0.2% in 2015. That makes it among the lowest in comparison with 15 other members of the Electric Vehicles Initiative international governmental forum. The government estimates that the current and future policy programs will help increase the EV market share in South Korea to 0.5%in 2017 and 5.3% in 2020.
Cars manufactured in South Korea account for 8.5% of the global market. The government would like for Korean made EV sales to equal 8.5% of the global market for plug-in hybrid and electric cars within a few years. Both Hyundai and Kia are about to introduce hybrid, plug-in hybrid versions of their latest cars to global customers later this year.