Nexo / Photo = Hyundai Motor Company website
Starting this year, subsidies for electric vehicles will be limited depending on the vehicle price. Tesla Model S over 90 million won will not receive any subsidies. In addition, if you buy a hydrogen car NEXO worth 67 million won in Seoul this year, you can get a subsidy of 33.5 million won and buy it at half the price.
On the 21st, the Ministry of Strategy and Finance, the Ministry of Environment, the Ministry of Trade, Industry and Energy announced a plan to reorganize the subsidy system for electric and hydrogen vehicles in 2021.
Subsidies for electric and hydrogen vehicles are calculated by adding subsidies to national and local expenses. This year, the government subsidy for electric passenger cars was decided at a maximum of 8 million won. The local subsidy was given a fixed amount per vehicle until last year, but from this year, it has been changed to a differential payment for each vehicle type in proportion to the national expenditure. Consumers who purchase Kona (economic type) in Seoul received a local subsidy of 4.5 million won last year, but this year they receive 3.45 million won. When the government subsidy of 6.9 million won is added, the purchase subsidy of 10.35 million won is received.
Also, from this year, purchase subsidies will not be given to electric vehicles that cost more than 90 million won. For electric vehicles of 60 million won or more and less than 90 million won, only half the subsidy is given. Electric vehicles less than KRW 60 million are paid in full. The vehicle price is based on the recommended consumer price including the amount of taxes such as individual consumption tax, education tax, VAT, etc. In this case, Tesla Model S and others cannot receive subsidies. An official from the Ministry of Environment explained, “It is to induce price reductions for electric vehicles and to foster low-end electric vehicles.”
The government subsidy for hydrogen vehicles this year is 22.5 million won. Local subsidies range from 9 million to 15 million won, depending on the region. Gangwon-do has the most subsidies for local hydrogen cars. The subsidy for local expenses in Seoul is 11 million won.
The government aims to significantly expand the supply of electric and hydrogen cars this year by subsidizing the purchase of 136,000 vehicles. This is an increase of 26,000 units (23.6%) from 110,000 units last year.
The government differentiates electric vehicle subsidies by price
Ioniq 5 subsidy for less than KRW 60 million released in the first half
Tesla Model S
There is a difference when buying an electric car this year. If the difference exceeds 90 million won, you cannot receive a single penny of government subsidies. If you buy Tesla Model S, Mercedes EQC 400, Audi e-tron 55 quattro, etc., the subsidy is ‘0 won’.
On the other hand, cars with a car price of less than 60 million won, such as Hyundai Motor Company’s Kona and Kia Niro, can be bought at a lower price by receiving full subsidies. Tesla Model 3 (Long Range, etc.) and BMW i3 120Ah, which cost more than 60 million won and less than 90 million won, can only receive half of the subsidy.
Government subsidy up to 8 million won
The government’s elimination or halving of subsidies for mid- and high-priced electric vehicles is to induce automakers to lower car prices. If there is no or little subsidy benefit and the consumer cannot choose it, it will naturally lower the price. Major overseas countries, such as China, UK, France, Germany, and others, have not already paid subsidies to electric vehicles that exceed 50 million to 80 million won in won.
It is also worth noting that subsidies are differentially paid for each local government in proportion to the government subsidies calculated according to the performance of each vehicle type. Subsidies consist of government and local expenses, and the maximum amount of government subsidies is 8 million won. Local subsidies vary by local government, including 4 million won in Seoul, 5 million won in Busan, 4.5 million won in Daegu, 4.2 million won in Incheon, and 5 million won in Gwangju. It is performance and area of residence that determines the subsidy. If performance declines, both government and local subsidies are cut.
Improved price competitiveness of mid- and low-priced electric vehicles
The Tesla Model S is worth 100 million to 130 million won. Until last year, thanks to subsidies (government and local expenses) of about 13 million won, it was possible to buy it cheaply, but this year there is no benefit. Some consumers responded, saying,’Isn’t it possible to shoot Tesla?’, but many pointed out whether we should pay tax discounts to consumers who can buy more than 100 million won.
The Tesla Model 3, which sold about 11,000 units last year and swept the domestic electric car market, varies depending on the grade. The highest performance grade can receive half a subsidy at a price of 75 million won. If you live in Seoul, you will receive a subsidy of 4.94 million won, including government expenses of 3.29 million won and local expenses of 1.65 million won. It means that you can live for around 70 million won.
Hyundai Motor’s first pure electric vehicle Ioniq 5 and Kia CV (project name) to be released in the first half of the year are expected to be released at a rating of less than KRW 60 million and a rating of more than KRW 60 million to less than KRW 90 million. Depending on the level, you can receive full or half of the subsidy.
If the car price is less than KRW 60 million, such as Hyundai Kona, Kia Niro, Renault Samsung Joe, and GM Korea Volt, all subsidy will be provided to increase price competitiveness. When you buy Kona (basic type), which is around 47 million won in Seoul, you can purchase it for about 35 million won with a subsidy of 12 million won, including 8 million won in national expenses and 4 million won in local expenses.
Buy Nexo in the middle of 30 million won
The government subsidy for hydrogen cars was set at 22.5 million won. It is the only hydrogen car Nexo subsidy in Korea. Nexo local subsidies are 11 million won in Seoul, 12 million won in Busan, 9 million won in Daegu, 10 million won in Incheon, and 10 million won in Gwangju. If you buy Nexo in Seoul, you can get 33.5 million won in subsidy (government cost 22.5 million won + local cost 11 million won) and purchase it in the mid-30 million won range.
The government subsidies for electric trucks have decreased slightly. The government subsidies for Hyundai’s Porter II Electric and Kia Bongo III electric vehicles were each set at 16 million won. It was reduced by 2 million won from last year. Instead, the government decided to significantly increase the number of units supported from 13,000 to 25,000.
In addition, the number of chargers will be increased so that users of electric and hydrogen vehicles can conveniently charge. The electric vehicle charger will build 3,1,500 units, including 1,500 rapid and 30,000 slow electric vehicle chargers. It was decided to build 54 more hydrogen charging stations.
Reporter Kim Il-gyu/Koo Eun-seo [email protected]