April 26, 2024

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[THE INVESTOR] Tesla Motors is looking to enter the nation’s nascent car-sharing scene amid its delayed Korean launch possibly due to lack of government subsidies.

SoCar, a local car-sharing service firm, on Nov. 24 unveiled an ad on its Facebook account that hinted the carmaker’s Model S luxury sedan would be joining the company’s car-sharing program.

 

2017 Tesla Model S

According to industry sources, talks are still ongoing between the two firms, while other rental car and car-sharing companies such as Lotte Rental and Green Car here are also in contact with the iconic EV maker for possible deals.

“Rental car and car-sharing firms are increasingly adopting luxury vehicles to appeal to car enthusiasts in their 20s and 30s. Tesla could gauge the market potential before its official launch,” an industry source said on condition of anonymity.

Tesla is finalizing its entry plan into Korea. But the plan has been delayed as its current two models -- Model S and Model X -- are not expected to benefit from EV subsidies worth 12 million won (US$11,000) to 19 million won.

The benefits are given to an EV whose charging takes less than 10 hours with a 7 kilowatt-hour low-speed charger. But the Tesla cars with higher density batteries fail to meet the requirements.

Retail prices of Model S and Model X start from US$66,000 and US$74,000, respectively. Considering tariffs, their local price could soar.

Its upcoming Model 3, the first Tesla car for mass market, is expected to meet the requirements but its launch is scheduled for later next year.

Nicolas Villeger, vice president of Tesla’s Japan and North Asia operations who was visiting Korea recently, also admitted that the company’s Korean entry has been delayed, urging the government to ease subsidy regulations for EV purchase.

He added Korea ranked fifth in terms of preorders for the Model 3.

Sources say the Model S launch could come early next year as it is still awaiting final government approval. The carmaker had originally planned to open its first Korean showroom in November in partnership with Shinsegae Group, a local retail giant.

By Lee Ji-yoon (jylee@heraldcorp.com)