By Park Jin-hai
The government plans to provide subsidies for people who buy plug-in hybrid electric vehicle (PHEV) as early as next year.
The Ministry of Environment said Monday that it has been taking steps to provide a maximum of 6 million won in subsidies for PHEV buyers in order to boost demand for the environmentally friendly, but expensive vehicle.
A PHEV can either run on a battery for short distances or on an internal combustion engine for longer journeys. It has better fuel efficiency, because the range it can travel on its battery is further than that of a hybrid car.
According to the ministry’s draft, it will request a total of 30 billion won to give financial support to buyers of 5,000 cars.
The ministry has given 1 million won in subsidies to hybrid car buyers, 15 million won for EVs, and 27.5 million won for fuel cell electric vehicles.
But PHEV buyers, although the prices of their cars are more expensive than hybrid cars, have not received financial support from the government.
Due to the lack of guidelines for subsidies, Hyundai has put off the launch of the Sonata PHEV until the second half of this year. It has not disclosed what the price will be.
Foreign carmakers are also measuring the timing of delivering their PHEVs.
To be eligible for the subsidy, PHEVs should run 30 kilometers purely on batteries and emit less than 50 g/km of carbon dioxide.
However, the kind of subsidies provided for EV customers to build private charging stations ― a maximum of 6 million won ― will not be offered to PHEV owners.
“We are taking steps to phase out those kinds of subsidies we are giving to EV customers. Either for EVs or PHEVs, we think automakers and importers should bear the expense,” said an environment ministry spokesman.
GM Korea CEO Sergio Rocha, during a recent announcement that it will launch PHEV Volt next year, said that the Volt is eligible for subsidies given to EVs because the car can run as far as 80 kilometers solely on its battery.
The ministry said that it will finalize the draft after reviews with experts and carmakers within this month, before going under the scrutiny of the ministry of strategy and finance and the National Assembly.
“We seek to finalize the plan within this year and provide subsidies for PHEVs delivered from January,” said the official.