Ensure EV subsidy policy supports domestic car manufacturers
Tesla Motors, which drastically expanded its share of Korea's electric vehicle market in the first half of the year, is expected to account for half of the government-issued EV subsidies. According to the Korea Automobile Manufacturers Association, the U.S. carmaker sold 7,080 EVs in Korea in the first six months, pushed its market share up to 43 percent, and took 90 billion won ($75 million), ― nearly half of the total 200 billion won ― in subsidies from the central and local governments.
The comparable market share for Tesla's Korean competitors ― Hyundai Motor and Kia Motors ― stood at 29 percent and 14 percent, respectively. While the domestic automakers faltered because of the delayed release of new models and other reasons, their foreign rivals increased their market share. It is not necessarily wrong for foreign carmakers to take the lion's share of subsidies. Korea should not set up discriminatory barriers running counter to global standards. However, at stake is how to upgrade the quality of local electric vehicles to be chosen by consumers in competition against imported products.
That said, the government needs to weigh its subsidy policy carefully. Policymakers should check whether the system is attaining the original goal of popularizing environment-friendly cars and creating harmony with the domestic industrial ecosystem. For example, some EV models of Tesla, Mercedes Benz, Audi and Jaguar are priced at 100 million won or more. It is questionable as to whether the government should be offering subsidies for such expensive cars. Officials should consider limiting them to mid- or low-priced models and inducing consumers to buy homemade EVs.
China, Germany and France are implementing their subsidy system in ways to benefit models made by their domestic companies. This year, the central and local governments will spend 1.2 trillion on subsidies for environmentally-friendlier cars. The government should operate the system more flexibly to promote the domestic industry and advance the popularity of environmental vehicles. Officials should ensure that massive amounts of taxpayers' money do not end up fattening only the pockets of foreign companies instead of creating jobs and promoting the industry.
Tesla Motors, which drastically expanded its share of Korea's electric vehicle market in the first half of the year, is expected to account for half of the government-issued EV subsidies. According to the Korea Automobile Manufacturers Association, the U.S. carmaker sold 7,080 EVs in Korea in the first six months, pushed its market share up to 43 percent, and took 90 billion won ($75 million), ― nearly half of the total 200 billion won ― in subsidies from the central and local governments.
The comparable market share for Tesla's Korean competitors ― Hyundai Motor and Kia Motors ― stood at 29 percent and 14 percent, respectively. While the domestic automakers faltered because of the delayed release of new models and other reasons, their foreign rivals increased their market share. It is not necessarily wrong for foreign carmakers to take the lion's share of subsidies. Korea should not set up discriminatory barriers running counter to global standards. However, at stake is how to upgrade the quality of local electric vehicles to be chosen by consumers in competition against imported products.
That said, the government needs to weigh its subsidy policy carefully. Policymakers should check whether the system is attaining the original goal of popularizing environment-friendly cars and creating harmony with the domestic industrial ecosystem. For example, some EV models of Tesla, Mercedes Benz, Audi and Jaguar are priced at 100 million won or more. It is questionable as to whether the government should be offering subsidies for such expensive cars. Officials should consider limiting them to mid- or low-priced models and inducing consumers to buy homemade EVs.
China, Germany and France are implementing their subsidy system in ways to benefit models made by their domestic companies. This year, the central and local governments will spend 1.2 trillion on subsidies for environmentally-friendlier cars. The government should operate the system more flexibly to promote the domestic industry and advance the popularity of environmental vehicles. Officials should ensure that massive amounts of taxpayers' money do not end up fattening only the pockets of foreign companies instead of creating jobs and promoting the industry.
![[K-POP INTERVIEW] What are MOMOLAND's comfort foods? [VIDEO]](http://img.koreatimes.co.kr/upload/thumbnailV2/210122_MOMOLAND_WEB_4d864d902f7b.jpg/dims/resize/178/optimize)
![[INTERVIEW] Model-turned-actress Jang Yoon-ju talks about becoming fearless on screen](http://img.koreatimes.co.kr/upload/thumbnailV2/454e2a41b53c4fd7b4271150638b21b6.jpg/dims/resize/178/optimize)
