Should I lower the nose of imported electric cars… Considering a discount in half of the subsidy

Electric vehicles that exceed 90 million won from this year cannot receive a single penny of subsidies from the government and local governments (local governments). This is because it has been changed to a differential payment in proportion to the difference, unlike the previous one where a fixed amount per unit was given.

The burden of consumers buying expensive electric vehicles such as Tesla, Mercedes-Benz, and Jaguar has increased. According to the analysis, there will be competition for price cuts and promotions in the sales structure that is bound to rely on subsidies.

The Ministry of Strategy and Finance, the Ministry of Environment, and the Ministry of Trade, Industry and Energy announced on the 21st the ‘2021 Electric Vehicle Subsidy System Reorganization Plan’.

First of all, the lower the price of electric vehicles, the higher the subsidy. Electric vehicles that cost less than 60 million won can receive the full subsidy. However, if it is more than 60 million won and less than 90 million won, only half is paid, and if it is more than 90 million won, subsidies are not given.

Local bodies are paid differentially in proportion to government subsidies. Seoul is 4 million won, Busan is 5 million won, Sejong is 3 million won, and Daejeon is 7 million won.

Until last year, subsidies were paid collectively regardless of price or performance. For this reason, there was a point that some imported electric cars were sweeping subsidies. In particular, there is a controversy over whether the tax should be paid to consumers who can afford to buy electric vehicles that are close to 100 million won.

According to the Kaizuyu Data Research Institute, Tesla’s Model 3 sold 11,03 units last year, accounting for 23.5% of the total electric vehicle sales (46,677 units).

The Model 3 Long Range will receive only half of the subsidy from this year at the current price level. Last year, it was paid 12.5 million won (based on Seoul) from the government and local governments.

Along with this, Tesla Model S, Mercedes EQC 400, Audi E-tron 55 quattro, Jaguar I-Pace, etc. will not receive a penny. No benefits this year. It means that you have to pay the full price.

On the other hand, if the car price is less than KRW 60 million, such as Hyundai Kona, Kia Niro, Renault Samsung Joe, and Korea GM Volt EV, price competitiveness increases. Kona Basic (HP) can receive full government and local government subsidies. If you buy it in Seoul, you can get up to 12 million won in subsidies.

The Ministry of Environment explained that it is “measures to induce electric vehicle price cuts and foster popular models.”

Interest is focused on whether the imported car industry will cut prices in this decision. In fact, in line with the subsidy in China, Tesla lowered the car price from 330,000 yuan (about 55.5 million won) to 299,000 yuan (about 50.3 million won).

A dealer who requested anonymity said, “It is virtually impossible to find a solution in the marketing strategy of high-end electric vehicles.” .

There is also a fierce competition under water to sell more. Benz will provide 5 million won for EQC purchases this month. This is a self-made countermeasure as the cost borne by consumers increases. The company gave an additional discount of 10.5 million won, equivalent to the subsidy at the end of last year. It is known that some companies are reviewing price adjustments according to the year change.

Some voices say it is difficult to understand the reorganization plan. An official from an imported car maker criticized it, saying, “It is a decision that is not suitable for the purpose of widespreading electric cars,” and “It is not against the environment because it is expensive.” He added, “There are always high-priced and mid-low-priced products in each market, but imports are excluded from the individual consumption tax reduction benefits.”