Skip to content

Global Times: South Korea’s EV Subsidy Plan Unfavorable to Chinese Companies

Global Times, a tabloid under the Chinese Communist Party’s flagship People’s Daily newspaper, recently reported that the South Korean Ministry of the Environment has updated its electric vehicle (EV) purchase subsidy plan for 2024. According to the article, certain vehicles will be disadvantaged by the new subsidy plan, including:

  • vehicles equipped with lithium iron phosphate batteries (the main product of Chinese battery companies), and
  • cars built by foreign companies that are not able to set up direct after-sales service centers throughout South Korea.

The new subsidy plan introduces a “battery environmental protection factor” aiming to account for the “waste battery recycling value” in the subsidy. According to this new standard, electric vehicles equipped with lithium iron phosphate batteries will be subsidized less on the grounds that such batteries contain less valuable recyclable metals. Subsidies for Korean consumers purchasing EVs equipped with Chinese batteries will shrink by up to 40 percent.

“Some have said that this move is the South Korean government’s response to the rapid increase in the domestic supply of electric vehicles equipped with Chinese batteries.” One commentator said that “the new policy is to align with foreign policies such as the U.S. Inflation Reduction Act, which is detrimental to Chinese battery companies to a certain extent.” According to Yonhap News Agency, “about 96.4 percent of South Korea’s EV battery imports currently come from China.”

Source: Global Times, February 7, 2024