Ranked 1st and 2nd among new imported commercial vehicles in August
Purchase subsidy of up to 23.5 million won per vehicle
“There are no benefits when exporting, so there is reverse discrimination against domestic cars.”
LFP battery recycling value declines
Chinese electric vehicles, whose domestic electric vehicle subsidies have been abolished, are rapidly encroaching on the Korean market using domestic subsidies as a stepping stone. In particular, sales of electric cargo vehicles, which receive twice as many subsidies as passenger cars, increased by 20% from January to July compared to last year. It is pointed out that this is ‘reverse discrimination’ against domestically produced electric vehicles, which cannot receive subsidies when entering overseas markets such as the United States and China.
According to the Ministry of Environment’s integrated zero-emission vehicle website on the 8th, 14 types (28%) of the 50 types of electric cargo vehicles receiving purchase subsidies this year are Chinese vehicles. Of the 26 types of electric cargo vehicles receiving subsidies last year, 5 types (about 19%) were made in China, but the number of new vehicle types has tripled in one year. Even considering that the total number of vehicle models has doubled, this is a rapid increase.
The number of units sold is also increasing. A total of 1,358 Chinese-made electric cargo vehicles were newly registered (sold) from January to July of this year, an increase of approximately 20% compared to the same period last year (1,141 units). Among the top 10 newly registered imported commercial vehicles in August, four are Chinese electric cargo vehicles. The first and second places are Geely Automobile’s ‘SE-A’ and Xinyuan Automobile’s ‘ETVan’. 350 electric trucks in China were sold in August alone. This is about 13% of the total electric cargo vehicles (about 2,700 units) shipped with subsidies in the same month.
The Ministry of Environment and local governments are providing purchase subsidies of up to 23.5 million won per electric truck to expand the distribution of zero-emission vehicles. The industry analyzes that “higher purchase subsidies compared to other countries helped the advancement of electric vehicles overseas.” Overseas sales incur additional costs, which inevitably puts us at a disadvantage in price competition, but domestic subsidies offset this. In fact, Geely Automobile advertises that the domestic selling price of ‘Se-A’ is 39.8 million won, but ‘if you receive small business subsidies in Geochang, Gyeongnam, you can buy it for 12.7 million won.’ On the other hand, the Ministry of Environment prepared a draft reform plan favorable to domestic electric vehicles in response to the U.S. Inflation Reduction Act (IRA) early this year, but adjusted the differential amount of subsidies due to opposition from the imported car industry, including the U.S. and China.
Experts point out, “We need to review whether it is appropriate to provide electric vehicle purchase subsidies with the goal of ‘carbon neutrality’ to cars that use lithium iron phosphate (LFP) batteries, which have low recycling value and become waste.” Most Chinese electric vehicles use LFP batteries, which have a relatively low battery density of 400 Wh or less, resulting in a short driving range and low price. It is difficult to find companies that recycle LFP batteries in Korea. This is because it is virtually impossible to recover raw materials other than lithium from LFP batteries using the waste battery processing technology currently used, making it less economical.
Kim Pil-soo, professor of Daelim University’s Department of Future Automotive, said, “Even in China, environmental pollution problems are emerging as LFP waste batteries are landfilled instead of recycled. If LFP waste batteries are not recycled, it will be a big problem.” There is a trend overseas to strengthen waste battery recycling regulations. The European Union (EU) Parliament, the world’s second largest electric vehicle market, passed the ‘Sustainable Battery Act’, which mandates recycling of core battery raw materials such as lithium and cobalt.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.