Tesla’s electric vehicle charging station supercharger is charging the Model 3. Photo = AP
As the government’s electric vehicle subsidy policy changed this year, the calculation method of electric vehicle makers became complicated. There are also observations that Tesla, the number one in the domestic market, can cut the price of the representative model’Model 3′.
According to the automobile industry on the 5th, the Ministry of Environment unveiled an administrative notice (draft) of the subsidy business handling guidelines for the electric-powered (two-wheeled) vehicle supply business in 2021. The main goal is to increase the supply effect of electric vehicles by subsidizing 100% for electric vehicles with a vehicle price of 60 million won or less and 50% for 60 million to 90 million won.
Electric vehicles with a price exceeding 90 million won are excluded from subsidies. The vehicle price is based on the ex-factory price excluding VAT, plus individual consumption tax and education tax.
The government subsidy for electric vehicles is up to 8 million won. Fuel economy subsidies (up to 4.2 million won), mileage subsidies (up to 2.8 million won), performance subsidies (up to 500,000 won), and energy efficiency subsidies (up to 500,000 won). Local government subsidies are also paid differently in proportion to national subsidies. If an electric vehicle received only 50% of the government subsidy, which is paid up to 8 million won, only 50% of the local government subsidy is paid.
The industry expects that the subsidy policy will remain as it is, as industry opinions have already been reflected in it. In addition, as subsidies are being paid as an important variable for sales, manufacturers that introduced domestic electric vehicles began to review vehicle pricing policies.
Tesla Gallery in Lotte Department Store in Yeongdeungpo, Seoul. Photo = Reporter Oh Se-sung and Hankyung.com
Currently, the electric car model that receives subsidies in Korea is Hyundai(208,000 +0.24%) Ioniq Kona, Kia Motors(62,400 -2.50%) Niro Soul, Renault Joe, Chevrolet Volt, BMW i3, Tesla Model S Model X Model 3, Jaguar I-Pace, Mercedes EQC, Peugeot e-208 e-2008 SUV, DS3 Crossback E-Tense, Audi e-tron, etc. Among them, Ioniq, Kona, Niro, Soul, Joe, e-208, e-2008 SUV, DS3 crossback E-Tense, etc. can receive all subsidies because the vehicle price is less than 60 million won.
The Tesla Model 3, the most popular electric vehicle last year, costs over 60 million won depending on the detailed model. The basic model is 54.69 million won, but the long range sold most in Korea is 64.79 million won. If the current price is maintained, the actual purchase price paid by consumers will rise from 52.9 million won last year to 5854 million won this year in Seoul. As the consumer burden has increased, sluggish sales are also expected.
There is also a prospect that Tesla may cut the Model 3 price. Tesla also lowered the price of the Model 3 by 8-10% in China in October last year to receive subsidies for electric vehicles. The model 3 long range price, which is preferred by domestic consumers, has also been cut by 10%, reaching 300,000,900 yuan (about 52.15 million won). The model Y price, which was recently launched in China, also announced that the long-range price was 30% lower than the previous guide price at 339,000 yuan (about 57 million won).
If Tesla cuts the model 3 long range price by 10%, as in the case of China, the full subsidy for electric vehicles can be received in Korea. In this case, the actual purchase price of consumers in Seoul is lowered to 45 million won. As the model 3 accounts for most of domestic Tesla sales, the increase in the competitiveness of the Model 3 leads to an improvement in Tesla Korea’s earnings.
Ioniq 5 driving in Korea. Photo = Baby Dream
The fact that various electric vehicles are expected to be released in Korea this year is also a factor that predicts Tesla’s price cut. The Hyundai Motor Group will introduce a large number of electric vehicles this year based on E-GMP, an electric vehicle platform.
Hyundai Motor’s Electric Crossover Utility (CUV) Ioniq 5 is expected to be released at around 50 million to 53 million won. The actual purchase price, including subsidies, is expected to be around 30 million won. Kia Motors CV (project name), Genesis JW (project name) and eG80 are also in full swing in preparation for mass production for release within this year.
An industry official said, “It is said that Tesla is popular, but if a domestic car with similar mileage or size is released at a low price of almost 20 million won, it is a considerable burden.” Dedicated charging stations on the back are also being expelled. Maintaining the high price policy will make it difficult to survive the competition,” he predicted.
Sesung Oh, reporter Hankyung.com [email protected]
Article reports and press releases [email protected]