Germany and Norway decided not to pay out subsidies for Tesla’s electric vehicles. They have decided to lower amount of subsidy, which has been given collectively for electric vehicles, depending on weight of a car and to not pay subsidy for luxury vehicles at all. Their intent is to support efficient electric vehicles while supplying more electric vehicles with limited budget. Electric vehicle experts from South Korea argued that South Korean Government’s policies on subsidies for electric vehicles also need to consider road and driving conditions, mileage, and price of a car and do away with even distribution of subsidy.
According to electric vehicle industries on the 6th, German Government recently decided to limit its subsidy for electric vehicles on vehicles that cost less than $70,750. (60,000 Euros). Norway, which is the number one country in the world based on diffusion ratio of electric vehicles, is going to apply new policies that reduce benefits of reduced and exempted taxes on mid-sized electric vehicles that weigh more than 2 tons starting from next year.
They are planning to increase efficiency in managing their budgets through economic electric vehicles with excellent economic feasibilities such as purchasing and operating costs by using limited budget for more electric vehicles. Tesla’s electric vehicles that cost more than $91,000 (100 million KRW) and weigh more than 2 tons are affected by these new policies the most.
“Looking at road and driving conditions in South Korea, South Korean Government needs to see if electric vehicles that thoughtlessly have many batteries are absolutely necessary.” said Chairman Kim Yong-geun of KAMA (Korea Automobile Manufacturers Association). “It seems that we need improvement in our policies on subsidies that consider efficient execution of budget and electric vehicle industries just like Germany and Norway.”
Germany has decided not to pay subsidy of $4,716 (4,000 Euros), which was given to all electric vehicles, for electric vehicles that cost more than $70,750 (60,000 Euros). Including Tesla’s ‘Model S and X’, some of luxury electric vehicle models from Benz, BMW, and Porsche will not be receiving subsidies.
Norway Government is going to exclude various tax system benefits such as exemption of road tax on electric vehicles that weigh more than 2 tons and it is also going to leave out surtax that corresponds to 25% of price of an electric vehicle and tax benefits for imported electric vehicles.
Industries in Norway estimated that price of Tesla’s ‘Model S’, which used to be around $74,288 (63,000 Euros) due to subsidy, will rise to about $94,334 (80,000 Euros).
Chinese Government is also going to stop providing subsidies for electric vehicles with mileages of less than 150km starting from 2018. Although it tends to give out more subsidies for vehicles with higher mileages, it has set up an upper limit at 300km in order to not encourage any electric vehicles with mileages more than necessary amount.
“Collectively paying subsidy to luxury electric vehicles or low-efficient electric vehicles that weigh more than 2 tons without any standards does not help in expanding electric vehicle markets and promoting electric vehicle industries.” said President Choi Young-seok of Charzin. “We need improvement in policies so that many people and many efficient electric vehicles can benefit from limited budget.”
Weight of Tesla’s ‘Model S (90D)’, which is being sold in South Korea, is 2,148kg and it can drive up to 4.2km (based on South Korean standards) with 1kWh of electricity. Compared to GM’s ‘Bolt’ and Hyundai Motor Company’s ‘IONIQ Electric’ that can drive up to 6.38km and 6.82km respectively with 1kWh of electricity, its mileage is at least 30% lower.
Staff Reporter Park, Taejoon | gaius@etnews.com