 |
| A Tesla vehicle / Korea Times file |
By Kim Bo-eun
Attention is growing over a local policy incentivizing car manufacturers to produce more eco-friendly vehicles, as Tesla is known to be lobbying the government in an attempt to benefit from the program.
The policy requires local carmakers to increase the portion of eco-friendly vehicles they produce. The program fines companies that fail to meet the required percentage of green cars, but rewards those that do by providing incentives.
The U.S. tech company claims the policy is unfair because it only applies to car manufacturers that sold at least 4,500 vehicles here as of 2009. Tesla does not fall under this category.
The company is known to have stated the policy goes against the national (equitable) treatment principle under the Korea-U.S. Free Trade Agreement (KORUS FTA). The principle requires governments to treat local and foreign businesses equally, given products of the foreign business have entered the local market.
While details of the policy have yet to be laid out, companies that fill the yearly requirement of eco-friendly vehicle production are expected to be able to trade excess credits in the market with other firms. If Tesla becomes subject to the program, it is expected to reap considerable profits from trading excess credit.
The government states it did not intend to give unequal treatment to foreign businesses, as the German carmaker Mercedes-Benz does has become subject to the policy.
"The purpose of the policy is to encourage conventional carmakers to make the switch to green vehicles, and therefore including a company that only produces electric cars wouldn't be aligned with the aim of the policy," an environment ministry official said by telephone. "If an EV company were to become subject to the policy, however, the policy would need to be complemented accordingly."
The official said the government is aiming to lay out the specifics of the policy by the end of the year.
Carmakers will be assessed on eco-friendly vehicle production based on figures for 2022, and fines will be imposed starting 2023. The government is aiming for the financial contributions from fines to be used to set up infrastructure for eco-friendly cars.
Local carmakers have been making efforts to increase EV production to capture demand as the global market for EVs is set to grow by 20 percent each year through 2030.
Meanwhile, there are concerns that a conflict with the U.S.'s greatest EV company may grow into a trade feud between the two countries. Tesla, which entered the Korean market in 2017, saw its sales spike to 11,826 vehicles in 2020, from 2,439 in 2019.
Tesla Korea was unavailable for comment on the issue.
![Biden-Harris inauguration is taking shape [PHOTOS]](http://img.koreatimes.co.kr/upload/newsV2/images/Y2021011903591_6fa7a9348d345.jpg/dims/resize/268/optimize)
