This article was published on Aug. 6, 2025, at 3:56 p.m. on the ChosunBiz MoneyMove site.
Thanks to subsidies, the second-quarter performance of PLINE MOTORS, an electric bus import and sales company that had been soaring, has turned to a loss. PLINE MOTORS, which infiltrated the domestic market with affordable Chinese electric buses, is recording operational losses, deepening concerns among investors.
According to the investment banking (IB) industry on the 6th, shareholders who invested hundreds of billions of won in PLINE MOTORS are reviewing ways to recover their investment funds. However, after failing to pass the listing review by the Korea Exchange earlier this year and withdrawing the initial public offering (IPO) due to worsening performance, it seems inevitable that handling losses will become difficult for the time being.
Previously, investors converted all convertible bonds (CB) and redeemable convertible preferred stocks (RCPS) issued by PLINE MOTORS into common stocks. PLINE MOTORS initially committed to guaranteeing an internal rate of return (IRR) of 10% while attracting investment but pushed for common stock conversion, arguing that they needed to eliminate obstacles in the listing process. The only beneficiary of the common stock conversion is PLINE MOTORS, which significantly reduced its debt ratio while lowering its liability burden. As of the end of 2023, PLINE MOTORS lowered its debt ratio, which had reached 2,776%, to around 200%.
Not only the recently invested Cheongdam Investment and Deep Dive Investment, which invested 50 billion won in PLINE MOTORS, but also existing investors such as Smilegate Investment, Shinhan Asset Management, and others converted all of their held CBs and RCPS into common stocks over seven transactions from October to December last year. As a result, they effectively placed a bet on the possibility of successful listing early this year, anticipating the performance through the last quarter of the previous year.
Initially, investors executed their investments seeing the explosive growth of PLINE MOTORS. The company's sales revenue grew significantly from 36.5 billion won in 2021 during the Moon Jae-in administration to 115.2 billion won in 2022 and 172.3 billion won in early 2023 under the Yoon Suk-yeol administration. Last year, PLINE MOTORS recorded 222.6 billion won in consolidated sales and 10 billion won in operating profit. However, it posted a net loss of 3.4 billion won. At one point, the company's corporate value was cited as being as high as 300 billion won.
Investors assessed last year's losses as short-term deficits due to interest expenses from domestic factory construction and the depreciation of the won. This led them to agree to convert to common stocks, giving up the stable recovery of the principal and interest income of 10% per annum. However, as PLINE MOTORS turned to a loss in the second quarter, the atmosphere has changed. An industry official noted, "This loss of PLINE MOTORS is due to the reduction of government subsidies."
PLINE MOTORS is considered the second-largest player in the domestic electric bus market after Hyundai Motor. It quickly dominated the market with a strategy of selling electric buses produced by the Chinese manufacturer Higer at lower prices compared to domestic ones. In fact, PLINE MOTORS, which has recorded high sales volumes of electric buses, is reported to have received national subsidies every year. Last year, it received the full amount of 70 million won for large models, which is the maximum allowed. Over the past three years, it sold 1,054 electric buses in Korea.
The period when PLINE MOTORS experienced explosive growth was during the Moon Jae-in administration. The Moon government made supporting electric buses a key agenda item by implementing the Green New Deal policy to promote eco-friendly vehicles. The Ministry of Environment executed 285.7 billion won in electric bus subsidies in the capital area from 2021 to 2023, of which 145.4 billion won (50.9%) was used to purchase Chinese electric buses.
However, with the Yoon Suk-yeol administration, the guidelines for electric bus subsidies changed, negatively impacting PLINE MOTORS' performance. Last year, the Ministry of Environment revised guidelines to provide differentiated subsidies based on factors like range per charge, battery density, and recycling levels. The subsidy for Chinese electric buses using lithium iron phosphate batteries was reduced from 100% to 70%, while domestic buses received 100%.
Investors believe that since PLINE MOTORS has dominated the domestic market based on government subsidies, the impact of the reduction in national subsidies will be significant. An industry official stated, "As the Chinese electric buses, which have lower production costs and thus lower selling prices, dominate the domestic market while also receiving government subsidies, the impact of subsidy reductions is bound to be significant," adding that "selling minority equity in a loss-making company is difficult and that the Korea Exchange has raised scrutiny hurdles, making it difficult to retry listing."
President Lee Jae-myung, whom investors had been secretly hoping for, has also effectively 'cut ties' with Chinese electric buses. Earlier, during a Cabinet meeting, President Lee criticized, "China only provides subsidies for Chinese products, but Korea grants subsidies to Chinese products, causing domestic electric bus companies to collapse." In response, the Ministry of Environment and other policy authorities are preparing a revision of the electric low-floor bus subsidy scheme.
PLINE MOTORS plans to expand its business areas with specialized vehicles this year and challenge the listing again next year. The fact that the investment period of Deep Dive Partners, which invested during the same period as Cheongdam Investment, is relatively short at just over a year also had an impact.
In this context, PLINE MOTORS stated, "Since last year, the Ministry of Environment has been delaying subsidies solely for the reason of being Chinese without legal grounds," and added, "As this damage continues into this year, the working performance for the first half did not meet expectations, but we will overcome this through ongoing domestic production."
It added, "As a small corporation, it is realistically impossible to produce domestically, so we have outsourced production through Chinese companies," and explained, "Starting in the second half of this year, we will begin domestic production of electric buses and also start domestic production of new models currently undergoing certification procedures by early next year."
Currently, PLINE MOTORS' largest shareholder is CEO Kim Man-yong, who holds about 24.11% equity. The second-largest shareholder is Cheongdam Investment (16.49%). Existing investor ST Leaders PE has some of its old shares sold and now holds 16.42% equity as of the end of last year. Other shareholders include 'Athenian First Special Purpose Company' at 7.91%, 'Eco Piti No. 1 New Technology Investment Association' at 7.33%, Smilegate Quicksilver No. 1 Private Equity Investment Partnership at 6.39%, and Shinhan Asset Management at 4.38%.