From now on, Chinese-made electric buses will find it harder to receive government subsidies. The Ministry of Land, Infrastructure and Transport changed the low-floor bus subsidy payment rules so that vehicles with low battery energy density cannot receive subsidies.
On Apr. 6, according to a compilation of ChosunBiz reporting, the Ministry of Land, Infrastructure and Transport (MOLIT) recently notified local governments that it will overhaul the guidance related to subsidies, which had been paid as a flat 87 million won per low-floor bus. Going forward, it will pay up to 90 million won per bus, but vehicles with low battery energy density will be excluded from eligibility.
As a result, Chinese-made electric buses are expected to have a harder time getting money. Many Chinese-made electric buses are said to use lithium iron phosphate (LFP) batteries. LFP batteries are inexpensive but are said to have low energy density. Ternary batteries mainly used by domestic companies are more expensive but have higher energy efficiency.
The domestic market share of Chinese-made electric buses is about 34% as of last year. These companies are said to have received 23% of the low-floor bus subsidies the Ministry of Land, Infrastructure and Transport (MOLIT) paid last year. The ministry commissioned a research project in the second half of last year to change the criteria for paying low-floor bus subsidies.