Built with100% government subsidies,
Facility replacement/removal is possible after 2 years of construction
Industry sets up sales organization to 'intercept customers'
Exploiting increase in number
The competition to intercept customers from other companies has begun in the Korean electric vehicle charging service industry. This phenomenon is like a mobile 'device change' or number transfer. Although this phenomenon has a dimension of securing stable fixed customers, it is interpreted as an intention to increase a company’s value by increasing the number of chargers. These are operated by large companies that recently started to invest in the charging industry. It is criticized that some companies are trying to inflate their values by taking advantage of charging facilities built by and operated with government fund.
According to the multiple outsourced charger sales industry on the 12th, P.C.H company and other companies that are designated as charging service companies by the Ministry of Environment are forming an external sales organization to take over the chargers of third party nationwide.
The chargers are built with 100% government subsidy. After two years of installation, the facilities can be replaced or removed at the discretion of the site provider, such as apartment owners, whom are in charge of the charging facilities. Targeting this idea, the charging industry has expanded its business through device change sales, mainly focusing apartments that are more than two years old. This is an abnormal condition occurring only in Korea, where the government supports all construction and operation costs, including charger products, from the early days of the electric vehicle market.
Although the investment for the charging business was invested in the government subsidy business rather than self-investment, the charger change business, which has a relatively low investment cost, expects to flourish as the government subsidy budget ends early for this year.
If these companies only spend a couple hundreds of thousands of won per charger through outsourcing companies, they do not have to spend 1 million won in construction costs and 500,000 won in payments to Korea Electric Power Corporation (KEPCO). The companies can easily increase the number of operating units by simply replacing the charger that costs between 300,000 and 600,000 won. It is advantageous in profitability advancement since the facility has been used for more than two years and able to know previous usage rate of customers in advance.
An industry official said, “Although it is not illegal to change the charger, it can be a waste of money to take away the right to operate by replacing a fully functional facility. Several companies are already preparing for equipment change market because it is possible to choose with highly used facilities while minimizing investment costs such as construction costs and KEPCO payments.”
The charging industry is expecting a gradual acceleration of intercepting customers. The charging companies are eager to increase their company values by increasing the number of chargers. This phenomenon is occurring because it does not violate government regulations, and large domestic companies start to enter the market this year.
An official from the Ministry of Environment said, “There is no way to impose sanctions, since the maintenance period for chargers installed with state subsidies was two years until this year. In order to prevent various side effects that may rise, the mandatory maintenance period for charging facilities supplied from this year has been extended to five years.”
By Staff Reporter Tae-jun Park
(gaius@etnews.com)