As the eligibility for electric vehicle purchase subsidies to be applied in the second half of this year is overhauled, the math for consumers preparing to buy cars has also become complicated. China's electric vehicle maker BYD, whose sales have surged by nearly 560% this year, will lose hundreds of thousands of won in state subsidies, making immediate price increases unavoidable. In contrast, Sweden's Polestar has newly become eligible for subsidies.
According to the Ministry of Climate, Energy and Environment on the 30th, 10 companies were selected in the passenger car category among those eligible for electric vehicle purchase subsidies to be applied starting July 1. ▲ Hyundai Motor ▲ Kia ▲ KG Mobility ▲ Renault Korea—four domestic brands currently selling EVs—all made the list. Among import brands, ▲ Tesla Korea ▲ Mercedes-Benz Korea ▲ BMW Korea ▲ Volkswagen Group Korea ▲ Volvo Car Korea ▲ Polestar Korea—six companies—were selected.
Electric vehicle purchase subsidies are divided into state subsidies and local subsidies provided by local governments. The manufacturers selected that day are eligible for state subsidies. For passenger cars, up to 5.8 million won per vehicle is provided, and if the price is under 53 million won, the full subsidy is granted. If the price is 53 million won or more and under 85 million won, half is granted, and EVs priced over 85 million won receive no subsidies.
On top of that, subsidies are further adjusted based on driving range and battery capacity. The models currently receiving the most subsidies are Hyundai Motor's midsize sedan "The New Ioniq 6" and Kia's compact SUV "The New EV6," both receiving 5.7 million won in state subsidies. Local subsidies are paid separately.
China's EV maker BYD was excluded from eligibility for state subsidies. BYD Korea had pushed up its sales for January–May this year (7,023 units) by 558.8% year over year by leveraging price competitiveness combined with subsidies, but it failed in this round of evaluation.
Until now, BYD's midsize SUV Sealion 7, with a sticker price of 44.9 million won, could be purchased in the 42 million won range when combining existing state and local subsidies. However, starting in July, the 1.52 million won state subsidy will disappear. In addition, the midsize sedan Seal rear-wheel-drive model and the small hatchback Dolphin will also no longer be able to receive the existing 1.69 million won and 1.09 million won state subsidies, respectively.
With BYD excluded from state subsidies, the industry is watching closely to see whether this will affect sales. A person at an import brand said, "For customers considering BYD, price competitiveness is one of the most important factors," adding, "If state subsidies worth hundreds of thousands of won disappear, sales will inevitably take a hit."
On the other hand, another person said, "Since this year, BYD's image has been changing positively, and demand for EVs is rising due to the war in the Middle East, so demand above a certain level will be maintained," adding, "Even without state subsidies, BYD's sticker prices are still competitive."
Attention is also on whether BYD will allocate its own subsidies to replace state subsidies. BYD Korea has previously maintained price competitiveness through its own subsidies. On this, a BYD Korea official said, "Nothing has been decided yet on whether to provide our own subsidies in July," but added, "We are reviewing various measures so that customers can purchase under more reasonable conditions."
Meanwhile, Sweden's EV brand Polestar was newly included among those eligible for state subsidies this time. Until now, when purchasing the midsize SUV Polestar 4, buyers received a 150,000 won local subsidy in Seoul and a 1.9 million won in-house subsidy from Polestar Korea, but going forward, the in-house subsidy will disappear and be replaced by state subsidies.
This measure takes effect immediately on July 1. Accordingly, consumers who purchased vehicles from manufacturers such as BYD that were dropped from subsidy eligibility need to check the delivery status of their vehicles. The government said it plans to provide subsidies for cases that have been applied for and received by today, if they are selected as eligible according to procedures.