Concerns are growing for Korea corporations that have entered the U.S. electric-vehicle charger market. With the slump in the EV market continuing, the Donald Trump administration recently signaled it would tighten the criteria for paying subsidies to EV charging infrastructure companies, raising the likelihood that profitability will worsen.
According to the industry on the 15th, the U.S. Department of Transportation announced last month that it would tighten the criteria for paying subsidies under the National Electric Vehicle Infrastructure (NEVI) program, a policy to expand EV charging infrastructure. The plan is to raise the share of U.S.-made parts used in EV charging stations from the current 55% to 100% and make U.S. production mandatory.
Korea corporations that entered the U.S. EV charging-station market and have grown on the back of federal subsidies have been put on alert.
SK Signet, an affiliate of SK Group, initially built a manufacturing plant in Plano, Texas, taking into account the NEVI program's requirements. The Texas plant can produce more than 10,000 fast chargers a year to meet stringent standards such as a U.S.-made parts ratio of at least 55%.
SK Signet currently holds the No. 1 market share in the U.S. EV charger market. About 20% of the chargers installed at EV charging stations funded by NEVI subsidies last year were SK Signet products. Charge point operators (CPOs) purchase chargers made by SK Signet and install and operate them across the United States. CPOs include Electrify America, EVgo and Francis Energy.
If federal subsidies are cut, building new EV charging stations is also expected to become difficult. When the U.S. government created the NEVI program in 2021, it allocated a total of $5 billion (about 7.344 trillion won) in subsidies. The federal government covered up to 80% of construction costs, with the remaining 20% borne by private operators or State Governments.
At the time, the Joe Biden administration paid not only construction costs but also the expense of connecting to the power grid and the expense of operations and maintenance for the next five years. If federal subsidies are cut, companies building EV charging stations will inevitably face a sharp increase in expenses.
Following SK Signet, EVSIS, a subsidiary of Lotte Innovate, also built a charger manufacturing plant in California. However, its market share is still minimal. Chaebi considered building a plant in the United States but did not actually proceed.
Korea charger manufacturers such as SK Signet and EVSIS, an affiliate of Lotte, reportedly have conveyed multiple times to the U.S. government that raising the local content ratio for parts to 100% is realistically impossible.
An industry official said, "There won't be a single corporations that can meet a 100% U.S.-made parts ratio," noting, "The government has set unrealistic production standards for corporations with the aim of eliminating federal subsidies."
However, some say the Trump administration may adjust the localization ratio in consideration of opposition from State Governments and the industry. In Feb. last year, when the Trump administration scrapped the existing NEVI guidelines and halted approvals for already approved State Government implementation plans, State Governments joined forces to file lawsuits.