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🇰🇷 South Korea /Technology

Ioniq 5 price could drop to 20 million won with new battery subscription pilot

From Hankyoreh · (4m ago) Korean Positive tone

Translated from Korean, summarized and contextualized by DistantNews.

TLDR

  • Hyundai Motor is launching a pilot program for its battery subscription service for the Ioniq 5 electric vehicle, initially targeting corporate taxis.
  • This service, inspired by models like China's Nio, allows customers to buy the car body separately and lease the battery, potentially lowering the initial purchase price significantly.
  • The initiative aims to reduce EV purchase barriers and address concerns about battery degradation, with plans to expand to individual consumers later this year.

South Korea is taking a significant step towards making electric vehicles more accessible with Hyundai Motor's launch of a pilot battery subscription service for the Ioniq 5. This innovative approach, spearheaded by Hyundai Capital, initially focuses on corporate taxi fleets, a segment that experiences high mileage and rapid battery degradation. By allowing customers to purchase the vehicle's body and lease the battery separately, the program aims to dramatically reduce the upfront cost of EVs, potentially bringing the Ioniq 5 within reach for around 20 million won (approximately $14,500 USD) after subsidies.

This move mirrors successful models seen internationally, such as China's Nio, which has already demonstrated the viability of Battery as a Service (BaaS). The Korean government had previously attempted to implement similar measures in 2022, but regulatory hurdles, specifically the inability to separate battery ownership registration under the Automobile Registration Act, stalled progress. However, a recent approval from the Ministry of Land, Infrastructure and Transport for a mobility regulatory sandbox has paved the way for this pilot program.

The pilot program will comprehensively verify the potential for cost reduction and vehicle operation period extension during EV operation.

— Hyundai MotorExplaining the goals of the battery subscription service pilot for Ioniq 5 corporate taxis.

The implications for the Korean automotive market are substantial. By decoupling battery costs, which typically account for 30-50% of an EV's price, Hyundai aims to alleviate a major purchasing deterrent. This is particularly relevant as concerns about battery performance decline and replacement costs have been a significant barrier for potential EV buyers. The pilot program will rigorously assess the cost-effectiveness and vehicle lifespan extension benefits of this model, gathering crucial data before a planned expansion to individual consumers in the latter half of the year. This initiative underscores Korea's commitment to fostering a more robust and accessible EV ecosystem.

The separation of battery ownership registration is not possible under the current Automobile Registration Act.

— HankyorehHighlighting the regulatory challenge that previously hindered the implementation of battery subscription services.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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