Enter 2021.01.16 07:00
② The Ministry of Industry rebelled against’Stop subsidy for electric vehicles over 90 million won’
③ The FTC’s’False Exaggerated Advertising’ Investigation is under consideration
④ Investigation of the cause of the vehicle fire accident in the Ministry of Land, Transport and Police Yongsan Model X
Elon Musk’s Tesla is confronting the government on four fronts, arguing to eliminate discrimination in the Korean market. Tesla, which accounts for 25% of the number of electric vehicles sold in Korea (46,677 units) last year, and is expanding its influence in the Korean market, is trying to cause trade disputes by insisting on a discriminatory regulatory environment for foreign companies.
The front line between Tesla and the government is very wide, including the police, the Ministry of Land, Infrastructure and Transport, the Ministry of Environment, the Ministry of Trade, Industry and Energy, and the Fair Trade Commission. The police and the Ministry of Land, Infrastructure and Transport are in conflict over the investigation of a Tesla Model X crash and fire accident that occurred in an apartment in Yongsan on December 9 last year, and the Ministry of Environment and the Ministry of Industry are in conflict over incentive systems such as subsidies for electric vehicles. Following the withdrawal of Tesla’s unfair terms and conditions, the FTC is investigating the existence of exaggerated advertisements.
According to the Ministry of Environment and Ministry of Industry on the 16th, it is known that Tesla conveyed the position that the’low emission vehicle supply target system’ recently introduced by the government to increase the supply of eco-friendly vehicles is unfair.
The target system for supplying low-emission vehicles is a system that distributes a certain proportion of the sales volume to eco-friendly vehicles such as electric vehicles and hydrogen vehicles to domestic automobile manufacturers and importers with certain conditions. Incentives are given to companies that achieve their goals by providing tradable credits, and contributors to companies that do not meet the goals are made to be binding. Contributions can also buy credits from other companies. In other words, if more eco-friendly cars are made than the standard set by the government, additional profits can be made with credit equivalent to the excess quantity. In order to participate in this system, both conditions must be met: the average sales volume over the last three years, 4500 units or more, and the sales volume of cars at least 4500 units as of 2009.
Among these, Tesla used the 2009 sales volume standard as an issue. This is because Tesla did not sell vehicles in Korea at the time. For Tesla, which sells only electric vehicles, if they participate in the low-emission vehicle supply target system, they can secure additional revenue in addition to vehicle sales. It is known that Tesla pointed out the problems of this policy and even raised the violation of the principle of treatment of nationals set by the Korea-US Free Trade Agreement (FTA). This means that it is not a Korean company but is discriminated against.
Some have argued that if Tesla participates in the system, it can generate up to 30 billion won in additional revenue per year through credit transactions. Accordingly, the Ministry of Environment, which is in charge of the low-emission vehicle supply target system, refuted, “The reason Tesla is excluded from the distribution target companies is because it does not meet the requirements of the current law, it is not a discrimination measure against foreign companies.” In fact, Honda and others are also participating in this system. The Ministry of Environment also said that Tesla’s estimated additional revenue of 30 billion won through credit transactions was “predictable”.
◇ In the Korean market only, the terms of selling expensive and passing responsibility to customers are withdrawn.
The Ministry of Environment and others have also modified subsidies for the purchase of electric vehicles, which Tesla used to do. The government subsidy received by Tesla Model 3 last year was about 8 million won, and the local government subsidy was about 4.5 million (Seoul) to 10 million (Gyeongbuk) won. For this reason, Tesla took over 55 billion won, or 42.2% of the subsidy for electric car purchases of 12.8 billion won in the first half of last year. Nevertheless, Tesla has been criticized by consumers for setting prices for major products higher in Korea than overseas.
In this situation, the government has decided not to pay subsidies for electric vehicles that cost more than 90 million won starting this year. In addition, only 50% of the subsidy is paid to electric vehicles of 60 million won or more and less than 90 million won. As a result, subsidies are no longer available for purchases of around 100 million Model S and Model X, and Model 3, which selects the full self-driving (FSD) option, which is a semi-autonomous driving function, costs over 60 million won. You can only receive up to 50% of the amount.
The Fair Trade Commission is also watching Tesla. In August of last year, the Fair Trade Commission issued a corrective order saying that Tesla’s terms and conditions for car sales were unfair. The company is not responsible for accidental, special, or derived damages, and the scope of compensation for damages to the customer is limited to an order fee of 100,000 won, and even if damage occurs, such as damage to the vehicle body when the delivery period passes without the customer receiving the vehicle. The problem was the provision that the customer takes all responsibility and eliminates the company’s delivery obligations. The Fair Trade Commission believed that these provisions had excessively reduced the liability of the operator without a justifiable basis and passed all damages and risks to the customer, and ordered Tesla to strengthen its responsibility.
The FTC has also received reports that Tesla’s anti-autonomous driving function advertisement was false and is reviewing it from September last year. Domestic consumer groups, etc., are using expressions such as autopilot and full self-driving (FSD) that can be misunderstood as if Tesla is capable of fully autonomous driving (level 5), etc.
◇ Tesla discusses anti-discrimination provisions for the Korea-US FTA… Possibility of a secret trade conflict
The accident in which the car owner died in the crash and fire of Model X in an apartment in Yongsan, Seoul on the 9th of last month could be a decisive step in Tesla’s expansion of its influence in the Korean market. In this accident, Model X, who was entering the apartment parking lot, collided with the wall and caught fire, and the car owner in the passenger seat died while the door did not open in time.
The police are investigating whether there was a sudden ignition problem in this accident, and the Ministry of Land, Infrastructure and Transport is looking into problems related to battery and door opening and closing. The Ministry of Land, Infrastructure and Transport has requested Tesla to submit data related to the accident on the 14th of last month, and is conducting a preliminary investigation of defects through the Automobile Safety Research Institute.
The issue of the sudden launch of Tesla vehicles has been steadily raised in the United States. The National Highway Traffic Safety Administration (NHTSA) conducted a preliminary investigation into the risk of a sudden start of Tesla vehicles in January of last year. According to the petition for an investigation and recall that NHTSA partially disclosed at the time, Tesla’s sudden outbreak of complaints was submitted to 127 cases. In addition, it has been pointed out that the’hidden door system’ adopted by Tesla’s Model X also has a hidden handle to open and close the door, so that if the power supply is cut off, the door cannot be opened from the outside, making it difficult to rescue occupants in an accident.
