Tesla’s model that recently lowered vehicle prices 3. EPA=Yonhap News
There is fierce battle between the government and the automobile industry over subsidies for electric vehicles worth over 1 trillion won. When Tesla lowered its price in line with the government’s new subsidy payment standards, the Ministry of Environment said it was a “wanted reaction.” The government plans to induce the popularization of electric vehicles by lowering the subsidy standard in the future.
Earlier, on the 12th, Tesla set the consumer price of the Model 3 Long Range at 59.9 million won and released it on the website. The price was lowered by 4.8 million won from the previous 64.79 million won. The model 3 Long Range, Tesla’s flagship model, has steadily increased in price since its launch in 2019, but this is the first time it has dropped. Tesla also set a price for the semi-mid-sized sports utility vehicle (SUV) Model Y to be launched in Korea this year, starting at 59.99 million won (standard range).
Tesla Model 3 Long Range Price Changes. Graphic = Reporter Cha Junhong [email protected]
“It’s regrettable that we lowered the standard by 10,000 won… Desired reaction”
Tesla’s electric sports utility vehicle (SUV) model Y launched in Korea this year. Tesla
The Ministry of Environment’s position is “desired reaction” to Tesla’s sharp price cut. The Ministry of Environment set the subsidy guidelines earlier this year and requested information on vehicle prices from manufacturers, but Tesla said that “the price was not finalized because the US headquarters made a decision.”
However, as if waiting for the government to come up with a standard of 60 million won, the price of the best-selling electric vehicle (Model 3 Long Range) and the strategic model (Model Y Standard Range) was set at 10,000 won lower than the standard price.
Regarding this, Sam-gi Son, head of the Ministry of Environment’s Atmospheric Future Strategy Division, explained, “The differential payment of subsidies is to promote the reduction of electric vehicle prices and focus on making popular models.” He added, “It is somewhat regrettable that (Tesla) set the price to 59.9 million won, which was lowered by 10,000 won from the standard of expensive vehicles, but the lower price is in line with the purpose of the subsidy system.”
Starting this year, the government has decided not to pay subsidies for expensive electric vehicles worth more than 60 million won or to cut them drastically. It was decided that only half of the subsidy was given for electric cars with a car price of less than 60 million to 90 million won, and not subsidy for vehicles over 90 million won.
Accordingly, the government initially set the amount of government subsidy for Model 3 Long Range at 3.41 million won. Local government subsidies are also differentially paid in proportion to government subsidies, so it is estimated that a total of 5.13 million won will be provided in Seoul.
However, the amount of subsidies is expected to double as Tesla decided to sell cars 10,000 won below the government’s subsidy standard. From the point of view of consumers, it means that they can buy the same car model more than 3 million won cheaper than last year.
Some are concerned that the Tesla Model 3 Long Range’s subsidy will double the government’s estimate, making it impossible to meet the original target number of supplies. In fact, Model 3 Long Range sold more than 10,000 units in Korea last year alone, ranking first in domestic electric vehicle sales.
Initially, the government put forward a plan to supply 121,000 electric vehicles this year alone by investing a subsidy budget of 1.3 trillion won. Regarding this, Manager Son said, “We calculated the average unit price of subsidy per unit at 7 million won to determine the number of units to be supplied.” Explained.
The Ministry of Environment plans to request evidence for lowering vehicle prices from manufacturers who have lowered electric vehicle prices this time. This is to check whether manufacturers have lowered the price through a shortcut to meet the subsidy standard.
“The price of an expensive electric vehicle is lowered further”
Concept image of the exclusive electric cars Ioniq 5, Ioniq 6, and Ioniq 7 that Hyundai will release sequentially. Photo hyundai car
The government is expecting that Tesla’s price cut will serve as a’signal’ to other manufacturers, including Hyundai and Kia, which are about to launch new electric vehicles. Furthermore, it plans to induce the current standard of 60 million high-end electric vehicles to be lowered in the future. It is a plan to promote popularization by lowering the price of electric vehicles.
Accordingly, it is expected that the war between the government that seeks to induce a reduction in vehicle prices and the manufacturers who want to increase price competitiveness through subsidies will intensify in the future.
“The subsidy policy is to create a weapon that allows electric vehicles to fight naked against internal combustion locomotives,” said Pil-soo Kim, a professor at Daelim University’s Department of Automobiles. I have to go.”
Reporter Chun Kwon-pil [email protected]