Individual hybrid cars will be excluded from eco-friendly cars from 2023

The government plans to exclude hybrid cars (HEVs) from eco-friendly cars from 2023. In this case, the tax benefits and discounts for public parking lots given to hybrid cars will disappear. In the industry, such policy changes are expected to lead to a faster reorganization of the automobile market, focusing on electric vehicles and hydrogen vehicles.

According to relevant ministries on the 4th, the Ministry of Environment is reviewing a plan to change the definition of’low-pollution vehicle’ in the Enforcement Decree of the Air Conservation Act. An official from the Ministry of Environment said, “We plan to place an order for a research service with the Ministry of Trade, Industry and Energy in the near future to design the details of the low-emission vehicle supply target system.”

The official added, “Based on the research service, the enforcement decree will be revised next year and applied from 2023.” He added, “We know that hybrid cars will be excluded from low-emission vehicles in order to reduce greenhouse gases more quickly.”

The Ministry of Environment currently classifies low-emission vehicles into 1-3 types. The first class low-emission vehicle is an electric vehicle, a hydrogen vehicle, and a solar vehicle. Type 2 low-emission vehicles are hybrid cars and plug-in hybrid cars (PHEV), and type 3 low-emission vehicles are vehicles that meet the detailed standards of emissions among liquefied petroleum gas (LPG) and gasoline vehicles. Among these, the industry usually calls the first and second types of eco-friendly cars.

Hybrid cars charge the battery while driving after running the engine with gasoline or diesel. In contrast, PHEV runs the battery by external charging and then runs the gasoline engine when it is discharged. The Ministry of Environment believes that hybrid cars need to be excluded from eco-friendly cars as they emit more greenhouse gases than PHEVs.

Electric/hydrogen accelerator pedal instead of hybrid car… “The key is charging infrastructure”
Government to remove hybrid cars from eco-friendly cars from 2023

Shim Mo, an office worker who owns a diesel vehicle, plans to change a car into an eco-friendly car sooner or later. Amid the’clean diesel’ craze, a diesel car was purchased in 2014, but the following year, after Volkswagen’s’Diesel Gate’, a diesel car turned into a frenzy. Sim said, “Whenever I hear the news that the gas tax may be raised to reduce greenhouse gas, I am worried that I will not be able to get the price of used cars properly,” he said. said.

However, if the government excludes hybrid cars from eco-friendly vehicles from 2023, the situation is highly likely to change significantly. This is because the benefits given to hybrid cars gradually diminish. In the industry, the number of consumers who choose electric cars and hydrogen cars instead of hybrid cars is expected to increase significantly due to policy changes.

Hybrid car benefits gradually decrease

Currently, hybrid cars, like electric cars and hydrogen cars, can receive benefits such as △50~60% discount on public and airport parking fees △Exemption from congestion tolls such as Seoul Namsan Tunnel. There is also a reduction in acquisition tax and individual consumption tax.

The government continues to reduce support for hybrid cars. Hybrid cars are considered to be transitional cars from internal combustion locomotives such as gasoline and diesel engines to electric and hydrogen cars. The government has removed subsidies for purchases for hybrid cars from 2019. The subsidy for the purchase of PHEV has been removed from this year. Since 2017, it has provided a 50% reduction in highway tolls for electric cars and hydrogen cars, excluding hybrid cars and PHEVs.

There is a possibility that the tax benefits for hybrid cars will disappear in the future. The current tax law reduces individual consumption tax to a limit of 1 million to 4 million won and acquisition tax to a limit of 400,000 to 1.4 million won for’environmentally friendly vehicles’ under the Eco-friendly Vehicle Act, depending on the vehicle type. The Eco-Friendly Vehicle Act refers to’environmentally friendly vehicles’ among vehicles that meet the requirements of △electric vehicles, hydrogen vehicles, solar vehicles, hybrid cars, PHEVs, or low-emission vehicles under the Air Conservation Act. It is defined as a car. It means that if the standards for low-emission vehicles change, it can be changed into the category of eco-friendly vehicles. However, an official from the Ministry of Industry, which is a department under the Green Vehicle Act, said, “If the Ministry of Environment changes the standards for low-emission vehicles, there will be discussions between the Ministry of Industry and the Ministry of Environment on how to view the standards for eco-friendly vehicles.”

Acceleration of reorganization around electric vehicles and hydrogen vehicles

Most of the eco-friendly cars so far have been hybrid cars. Last year, domestic electric/hydrogen cars, hybrid cars, and PHEVs sold a total of 22,7389 units. Of these, sales of hybrid cars accounted for 71% (16,1450 units).

Consumers prefer hybrid cars because electric cars and hydrogen cars have a short mileage and lack of charging infrastructure. As of the end of last year, the number of fast chargers for electric vehicles was limited to 9805. The Ministry of Environment plans to increase this to 20,000 units by 2030.

Ho-geun Lee, a professor at Daedeok University, said, “Hybrid cars have been chosen by consumers because they do not have the weaknesses of electric vehicles such as price, mileage, and charging infrastructure in addition to various eco-friendly vehicle benefits. If possible, it will change rapidly to the purchase of electric cars and hydrogen cars.”

If the range of low-emission vehicles narrows, it may become more difficult for the industry to achieve the mandatory ratio of the low-emission vehicle supply target system, which will be strengthened from 2023. From 2023, the government plans to impose contributions (in fact, fines) if automakers fail to sell low-emission vehicles over a certain percentage of their sales volume. According to the Ministry of Environment, electric vehicles, hydrogen vehicles, and PHEVs are currently recognized as low-emission vehicle sales in similar systems in force in China, the United States (10 states including California) and Quebec, Canada.

An industry insider said, “It is true that the more diverse car model options are, the easier it is to fill the mandatory ratio of the supply target system.”

Reporter Koo Eun-seo/Kim Il-gyu [email protected]