The Ministry of Environment in South Korea has announced new regulations regarding subsidies for the purchase of electric vehicles (EVs) this year. These new regulations are unfavorable for Tesla, CATL, and other Chinese manufacturers of lithium iron phosphate (LFP) batteries, according to industry sources on Tuesday.
In order to provide safer and more environmentally friendly vehicles, the ministry has decided to provide greater incentives for purchasing EVs equipped with onboard diagnostics (OBD) and higher energy density batteries.
Tesla has not installed the equipment necessary for conducting self-diagnostic tests, citing the potential leakage of its autonomous driving technologies and battery management systems.
Although South Korea does not require the installation of OBD, other EVs are equipped with this system.
Furthermore, Tesla will be most impacted by the government’s decision to provide full subsidies only to those individuals who purchase vehicles below 55 million won ($41,000), as the imported Model Y from China is priced at 56.9 million won. Until last year, buyers of EVs below 57 million won received 100% subsidies.
Industry representatives are closely monitoring whether the American company will further reduce EV prices to attract customers here, amid the global slowdown in electric vehicle demand. Data collected by the Korean Automobile Importers and Distributors Association showed that only one Tesla vehicle was sold here last month.
The fact that Tesla’s new model is equipped with LFP batteries is another unfavorable factor for the company’s operations in Korea. The Ministry of Environment plans to offer greater incentives for purchasing vehicles equipped with high-density batteries, which are easier to recycle.
Compared to ternary batteries, which were the main focus of Korean companies, LFP batteries have lower energy density and require more energy for decomposition in the recycling process.
While Korean battery manufacturers are looking towards mass production of LFP batteries along with the trend of international carmakers trying to lower EV prices, they are still behind their Chinese competitors in terms of low-cost battery production.
“The amended regulations seem to be beneficial for Korean battery manufacturers, giving them time to develop LFP batteries that can compete with the products of their Chinese rivals,” said a local battery industry representative.
However, smaller EV manufacturers in Korea and importers of foreign EVs are protesting against the ministry’s recent actions. For example, KG Mobility may have difficulty attracting customers to purchase the electric SUV Torres EVX, which is equipped with Chinese BYD LFP batteries.
The ministry stated that its latest decision aims to promote EVs and contribute to cleaner air. It also plans to gather feedback on the introduced regulations until February 15.
FAQ Section:
1. What are the new regulations regarding subsidies for electric vehicles (EVs) in South Korea?
The Ministry of Environment in South Korea has announced new regulations regarding subsidies for the purchase of electric vehicles this year. The new regulations include greater incentives for purchasing EVs with onboard diagnostics (OBD) and higher energy density batteries.
2. Which companies are impacted by the unfavorable regulations?
Tesla, CATL, and other Chinese manufacturers of lithium iron phosphate (LFP) batteries are impacted by the unfavorable new regulations.
3. Why hasn’t Tesla installed equipment for self-diagnostic tests?
Tesla has not installed equipment for conducting self-diagnostic tests due to concerns about the potential leakage of its autonomous driving technologies and battery management systems.
4. Does South Korea require OBD installation in EVs?
South Korea does not require the installation of OBD in electric vehicles, but other EVs are equipped with this system.
5. What are the changes in subsidies for Tesla?
The government’s decision to provide full subsidies only applies to individuals who purchase vehicles below 55 million won ($41,000). The imported Model Y from China by Tesla is priced at 56.9 million won.
6. Will the American company lower EV prices in response to the regulatory changes?
Industry representatives are monitoring whether Tesla will reduce prices of their EVs to attract customers, as there is currently a global slowdown in electric vehicle demand.
7. Why is Tesla having a disadvantage in Korea with LFP batteries?
LFP batteries have lower energy density and require more energy for recycling compared to ternary batteries, which are more popular in Korea. The Ministry of Environment plans to provide greater incentives for vehicles with high-density batteries, which are easier to recycle.
8. What is the stance of smaller EV manufacturers and importers in Korea?
Smaller EV manufacturers in Korea and importers of foreign EVs are protesting against the new regulations by the Ministry of Environment.
9. What is the objective of the new regulations by the Ministry of Environment in Korea?
The Ministry of Environment states that its latest decision aims to promote electric vehicles and contribute to cleaner air. It also plans to collect feedback on the introduced regulations until February 15.
Key Term Definitions:
– EV (Electric Vehicle) – a vehicle powered by electricity
– OBD (Onboard Diagnostics) – a system for monitoring and diagnosing the operation of a vehicle
– LFP (Lithium Iron Phosphate) – a type of battery used in electric vehicles, characterized by lower energy density
Suggested Related Links:
– Ministry of Environment in South Korea
– Tesla
The source of the article is from the blog coletivometranca.com.br