April 17, 2024

• 

[THE INVESTOR] The South Korean government announced on Dec. 5 that it will double incentives for electric vehicle purchase next year to jump-start the green car sector.

The government has budgeted 206 billion won (US$176.09 million) for EV subsidies next year, about twice that of 105 billion won allocated for this year, according to the Ministry of Environment. The subsidy takes up 78 percent of the total EV budget of 264.2 billion won for next year. The budget toward expanding charging infrastructure has also been increased from 42 billion won to 55 billion won. 

Tesla Model S

Under the plan, the government subsidy -- up to 14 million won for each vehicle -- could be extended to 14,714 new cars next year.

The government’s renewed budget arrives as the demand for electric vehicles is slow, largely due to lack of adequate charging infrastructure. As of November, about 4,500 EV units were sold here, far below the government’s yearly target of 10,000 units.

However, industry watchers expect the EV market will heat up as the world’s two leading EV makers Tesla Motors and BYD Auto are entering the market.

The US EV maker Tesla is opening its first dealership at the Starfield Hanam, the nation’s largest shopping complex by floor space, by end of this year. It is also preparing to open another showroom in Cheongdam-dong, Seoul’s most affluent district, to begin sales in the country.

Meanwhile, Chinese BYD, the world’s largest EV maker, has set up a Korean unit in Jejudo, and will soon begin operations by introducing electric buses first.

South Korea’s largest automaker Hyundai Motor has also been increasing local production of its EV Ioniq, while GM Korea, the Korean unit of the US General Motors, is planning to release its Chevrolet Bolt EV next year.

Renault Samsung Motor also launched the 2017 SM3 Z.E., the automaker’s fully electric-powered sedan.

By Ahn Sung-mi (sahn@heraldcorp.com)