EV subsidy registrations begin amid concerns of shortage

Amid rising concerns that the government could run out of subsidies for green cars, registrations for electric vehicle subsidies began at 156 provincial governments nationwide, the Ministry of Environment said Thursday.

A total of 16 models made by seven local and foreign carmakers are qualified to receive subsidies of up to 12 million won ($11,160) per electric vehicle from the central government, and between 4.4 million and 11 million from provincial governments this year.

The amount of subsidy differs depending on the performance of the electric vehicle evaluated by the ministry.

The area that receives the highest subsidy is Yeosu in South Jeolla Province, where drivers can receive a maximum of 23 million won.

This year, the government has increased support for electric vehicles by some 30 percent on-year to 240 billion won across 20,000 units, the ministry said. 

Due to a drastic rise in demand, however, preorders of electric vehicles have already surpassed 20,000 units, sparking concerns among drivers waiting for electric vehicles to be rolled out later this year.

The electric version of Hyundai’s compact sport utility vehicle Kona had reached nearly 16,700 units in preorders as of Wednesday, the company said.

Preorders for some 5,000 units of the Chevrolet Bolt EV, which has a driving distance of 383 kilometers per charge, were also sold out in three hours last month.

According to the ministry, electric vehicle sales are expected to total 49,630 units this year, compared to 13,826 units sold last year.

“The government estimation for this year’s EV demand was way off. It should have lowered the 12 million won maximum subsidy from the central government to about 9 million won. This way, 500 more cars could have received benefits,” said Lee Ho-geun, a professor of automotive engineering at Daeduk University.

He added that rather than sticking to a first-come, first-served basis in subsidy distribution, the government could consider other options, such as holding a draw in the first and third quarters for drivers planning to make purchases later in the year.

If electric vehicles are not delivered within two months after drivers are selected for support, the government will cancel the subsidies, starting this year.

Kia Motors is scheduled to release the Niro EV in the second half of this year along with Jaguar’s first electric sports car I-Pace and Nissan’s best-selling EV New Leaf.

Regarding the possible budget shortage, Finance Minister Kim Dong-yeon said during a meeting with Hyundai Motor Vice Chairman Chung Eui-sun last month, “If necessary we will look into securing additional budget for EV subsidies.” 

By Kim Bo-gyung (lisakim425@heraldcorp.com)