Prices of South Korean electric vehicle chargers have dropped by more than half in just two years.
Competitions have become super competitive as South Korean Government public enterprise are simply looking for products with lowest cost. Although businesses that order electric vehicle chargers will be able to reduce their budget through below-cost bidding, some point out possible dangers of safety and quality using Chinese products that are not verified by markets yet.
Price of a charger was bid for $11,510 (12.8 million KRW) during a bidding made by Korea Electric Power Corporation on the 31st of October for rapid charger (50kWh). Price of a fast charger, which used to cost $23,442 (26.07 million KRW) in 2015 based on winning bid by Public Procurement Service, was reduced by more than half of its previous price in just two years. Compared to average winning bid ($18,164 (20.2 million KRW)) of a fast charger in 2016, it is still about 40% lower.
Even biddings that were carried out by Ministry of Environment’s Korea Environment Corporation this year, average winning bid of a fast charger was about $14,387 (16 million KRW) excluding electric work cost. This price is also 39% and 21% lower respectively compare to average price in 2015 and 2016.
Korea Electric Power Corporation and Korea Environment Corporation are the largest owners of fast chargers and they have ordered at least 90% of fast chargers that are set up in South Korea. Their regulations are based on lowest price bidding method and they set up so that any company can participate in a bidding as long as it has minimum requirements that are needed to supply chargers. Ultimately their current bidding systems incite excessive competitions based on low price.
“We are worried about decline in quality of chargers as we have no choice but to use low-cost parts since we continue to lower unit price while there is no reason to reduce production cost.” said a representative for a charger manufacturer. “Because fast chargers operate at voltage that is 10 times higher than normal electricity, any problems can lead to huge accidents.
Number of charger manufacturers decreased from four to two as companies are competing to sell their products at the lowest prices, and some of these companies even enter biddings with products made by different companies. Many companies participated in biddings either with their products or low-cost Chinese products rather than products made by South Korean charger manufacturers and successfully won biddings for large-scale supplies.
Electric vehicle and charger industries are pointing out that competitions need to be formed based on quality rather than low cost since chargers supplied by Korea Electric Power Corporation and Korea Environment Corporation are used for public charging infrastructures.
“Using Chinese products has become generalized as companies are competing to sell their products at the lowest prices.” said a representative for a different manufacturer. “Biddings should do away with cheapest products and be based on technical skills, installation capabilities, experiences in supplying chargers, and A/S support so that there is some kind of credibility with these manufacturers.”
Korea Electric Power Corporation and Korea Environment Corporation decided to change their bidding systems so that they are based on credibility of products due to recent controversy on unverified Chinese products.
“Although we decided to change bidding method, it is likely that new bidding method will be applied early next year since we are still preparing detailed standards.”
Staff Reporter Park, Taejoon | gaius@etnews.com