Hyundai, LG backing gov't green vehicle drive

Prime Minister Chung Sye-kyun, fifth from left, poses with Hyundai Motor Group Chairman Chung Euisun, fourth from left, and other participants of an MOU signing ceremony on an electric vehicle battery leasing business at Hyundai Motor Group's research center in Hwaseong, Gyeonggi Province, Thursday. From left are Hyundai Glovis President Kim Jung-hoon, Hyundai Motor President Kong Young-woon, Trade, Industry and Energy Minister Sung Yun-mo, Chairman Chung, Prime Minister Chung, LG Energy Solution President Kim Jong-hyun and KST Mobility CEO Lee Haeng-yeol. Courtesy of Hyundai Motor Group

By Nam Hyun-woo

Hyundai Motor and LG Energy Solution (LGES) agreed Thursday to jointly promote an electric vehicle (EV) battery leasing business here, in a bid to create an ecosystem for the industry and support President Moon Jae-in's drive to develop it as one of the country's next growth drivers.

The two sides signed a memorandum of understanding (MOU) during a visit by Prime Minister Chung Sye-kyun to the Hyundai Motor Group research center in Hwaseong, Gyeonggi Province, where he detailed the government's mid-term goals for the expansion of eco-friendly vehicle use nationwide.

According to Hyundai Motor and the government, the agreement is aimed at operating a feasible EV battery leasing program, which could be used for electric taxis; and reusing EV batteries for energy storage systems (ESSs). The MOU was also signed by the Ministry of Trade, Industry and Energy, logistics firm Hyundai Glovis and taxi operator KST Mobility.

Hyundai Motor will sell Kona Electric taxis to KST Mobility, which will immediately sell its ownership of the batteries in the EVs to Hyundai Glovis. KST Mobility will then pay a monthly rental fee to Hyundai Glovis, which will manage the leasing of the batteries. Hyundai Motor said this arrangement is tantamount to KST Mobility buying vehicles without batteries, thus enabling it to purchase the EVs at a lower price.

When the batteries are swapped after extensive use, Hyundai Glovis will sell the used batteries to LGES which will assemble them into ESS units designed for fast charging, after analyzing their safety and residual charging capacity. LGES will then sell the recharging units to KST Mobility to charge the batteries of its EV taxi fleet.

The Ministry approved this business model in October last year as part of its "regulatory sandbox program" to foster the domestic EV business.

Twenty Kona Electric taxis will be used in a pilot program starting next month.

The government wants the firms to expand the battery leasing program to hydrogen buses next year. If the business is commercialized and expanded to individuals, Hyundai Motor said it will allow customers to purchase EVs at lower prices.

"The battery leasing business bears extra significance as it completes the EV ecosystem," Chung said during his visit. "This has simultaneous advantages in expanding EV use, creating new businesses and cutting emissions. This will not be realized by the sole efforts of one company or ministry, it is important for everybody to be a stakeholder."

The same day as Chung's visit to the research center, the government announced its mid-term goals for EV use expansion here. The administration has pledged a 24 percent reduction in vehicle greenhouse gas emissions by 2030, aiming to have 7.85 million eco-friendly vehicles in use nationwide. Also, it promised to support an increase in the number of eco-friendly vehicle exports to 830,000 by 2025, up from 280,000 last year, as well as allowing the introduction of vehicles powered by solid-state batteries by 2030.

Solid-state batteries, which are under development by a number of battery makers around the world, are expected to outperform the current lithium-ion batteries in energy density, while having less of a risk of exploding or igniting.

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