Controversy has arisen over the Ministry of Environment turning to a specific company for their charger subsidy business. This is because a certain company has secured 20% of the government subsidy budget this year. Although the Ministry of Environment introduced an evaluation system for business operators this year to restrict the participation of companies only seeking subsidies and to improve service quality, critics say that this was meaningless.
The Ministry of Environment announced that it closed applications for subsidies from June 16 to 30, and approved all applications received on the 7th of this month. Previously, among the 40 companies that applied for government subsidy business licenses, the Ministry of Environment selected 25 companies through evaluations, such as charger installation performance. Afterwards, based on the evaluation results, subsidies were to be distributed differently for each of the five grades.
However, it was finally decided to approve all the submitted applications when the application, which closed on the 30th of last month, reached KRW 50 billion, which was shy of the government's budget (KRW 60.5 billion). In the end, it was the same as the previous first-come-first-served payment system, except that the evaluation system was introduced and the number of companies was reduced to 25 from 40.
Charging company A, which submitted 8,100 applications, received subsidies worth more than KRW 10 billion. Based on the number of applications received, the company secured 20% of the KRW 50 billion government budget.
Company A is being criticized by customers for doubling charging fees on the same day of the government approval. The company raised the price from a minimum of KRW 110 and a maximum of KRW 178 per kWh to KRW 269 (from 09 to 23:00).
A CEO of charging company said, “We are executing a budget that is three times bigger than last year, but the application period was 11 days (business days), so there was physically not enough time," adding that, “There were mentions that the Ministry of Environment would approve all applications if the budget was not met or that the upper limit would not be applied, but it was not regulated.” Another company CEO emphasized, “In the end, the subsidy policy has returned to the first-come-first-served basis, and the government has broken its promise with the industry for a convenient budget execution.”
In response, the Ministry of Environment said that there was no problem with the regulations as it had sufficiently communicated with charging service providers in advance. An official from the Ministry of Environment's Future Air Strategy Division said, "We approved all applications because the KRW 60.5 billion budget was not exhausted, and this was sufficiently communicated with the industry," and, “The annual budget for supplying chargers was already pointed out (by the Ministry of Economy and Finance) as the year passed."
Since 2017, the Ministry of Environment has invested more than KRW 200 billion to supply more than 90,000 slow chargers. It has the world's highest penetration rate for chargers among the Organization for Economic Cooperation and Development (OECD) countries. However, consumers do not realize these figures. This is because chargers were installed indiscriminately to obtain subsidies regardless of consumer accessibility. In addition, similar problems occur every year, such as impersonation of a government agency, allegations of illegally removing chargers, poor construction, and bribery. Improvement of subsidy policy seems urgent.
[Table] Subsidy business for electric vehicle chargers from 2017~2022 (Source: Ministry of Environment)
※Partial inclusion of outlet (2020~2022) and portable chargers (2017~2019) in the budget.
By Staff Reporter Tae-jun Park gaius@etnews.com