In the end knee on subsidy… Hyundai Motor Company is worried about Tesla’s 4.8 million won cut

Tesla lowered the price of the Model 3 Long Range for the first time since entering the Korean market. Last month, when the government announced that it would only pay half of the subsidy for high-priced electric vehicles of 60 million to 90 million won this year, it was lowered to 59.9 million won, which is below 60 million won. Tesla’s agile pricing policy is expected to affect the price of Hyundai Motor Group’s new electric car, which is scheduled to be released in the first half. The Long Range is a model that sold 11,033 units last year, accounting for 35% of the domestic electric vehicle market.

On the 12th, during the Lunar New Year holiday, Tesla Korea set the consumer price for the Model 3 Long Range to 59.9 million won, down 4.8 million won from 64.79 million won, and announced it on the website. The remaining 7 trim prices, including the Model 3 Standard Plus (54.79 million won), which are not exceeding 60 million won, were kept as they were and only the long range was cut. Tesla has raised the price of the 2019 Model 3 Long Range twice after launching it in Korea, but this is the first time it has dropped. At the time of launch, the price was 6239 million won.

On this day, Tesla also revealed the changed specifications of the 2021 long range. The driving distance has increased by 50 km from 446 km to 496 km. The room temperature (23°C) and low temperature (-6.7°C) mileage, which is the standard for calculating electric vehicle subsidies, has also increased significantly.

As the low-temperature mileage is longer, the long range can also receive additional subsidies in addition to the fuel economy and mileage subsidies by achieving the energy efficiency subsidy standard (low temperature/room temperature mileage ratio). For electric vehicles with a single charge distance of 400 km or more, if the ratio (low temperature/room temperature) is 75% or more, the energy efficiency subsidy is 500,000 won.

An official from Tesla Korea said, “The battery capacity remains the same, but the 2021 Long Range has a heat pump (heating device) installed to increase the mileage. The reason why the mileage improved because the body weight was reduced from 1844 kg to 1830 kg. Explained.

Based on the improved specifications, the government subsidy for the long range is expected to be around 11 million won. This is similar to last year (12.5 million won).

Earlier last month, the Ministry of Environment announced that, based on last year’s specifications, Long Range’s government subsidy this year was 3.41 million won. When the subsidies of local governments (based on Seoul city) are added, it was estimated to be 5.13 million won. From the perspective of consumers, it is possible to buy a long range at a price that is more than 3 million won lower than last year. The actual price of applying the subsidy last year was 52.29 million won (based on Seoul city), but it is estimated to be around 49 million won this year.

The industry views that the government’s differential payment plan for subsidies has been effective. “The price cut of Tesla is expected,” said Pilsoo Kim, a professor at Daelim University. “In the future, the government’s subsidies for electric vehicles are expected to decrease gradually, but Tesla will adjust the price according to the government policy.”

On this day, Tesla launched the Crossover Utility Vehicle (CUV) Model Y in the Korean market. It is the fourth model after the models S, X and 3. The price of the entry trim standard range is 59.9 million won, the same as the model 3 long range, and the actual price after subsidy is expected to be around 50 million won.

As Tesla Korea launched last year’s best-selling electric car and strategic model Y, both for KRW 59,999, the Hyundai Motor Group was on fire. The prices of Hyundai Ioniq 5, scheduled for release at the end of this month, and Kia CW (project name), scheduled for July, are known to be 50 million won.

The gap between the three models is unlikely to be large as Tesla has slashed prices. In particular, the price of a trim equipped with a 73kWh (kilowatt-hour) large-capacity battery among Ionic 5 is expected to be around 60 million won, which is expected to lead to a long range and fierce battle.

Lee Hang-gu, a senior research fellow at the Korea Automobile Research Institute, said, “Tesla, which sold 500,000 units last year, has room for price cuts due to its mass production system, but Hyundai Motor Group is not yet in a condition to reduce fixed costs in electric car production. Tesla will lower the price first, so it will be a concern.”

Reporter Kim Young-joo [email protected]