Seoul Metropolitan City gives you up to 3.5 million won when you buy an eco-friendly motorbike. I and my friend made this joke over a drink that we buy 10 electric scooters to make money out of it. On our calculations, we could save quite a lot considering each unit costs around 1.5 to 3.44 million won and we start selling when the subsidy ends.
Subsidy goes way too generous when it comes to eco-friendly cars like electric or hydrogen. You can receive up to 13.5 million won when buying an electric car and up to 35 million won when buying a hydrogen car. If you buy an eco-friendly taxi, you can get up to 18 million won. For exact amount of subsidy, visit www.ev.or.kr
The reason government gives out this seemingly ‘wow’ subsidies for eco-friendly car buyers comes from its target to supply 430,000 electric cars and 65,000 hydrogen cars which must be on the road by 2022. What is more? 1 trillion won is to be poured into manless cars within the first half of next year and generous sum of subsidy will also be poured into car parts companies.
In line with the central government, local governments are giving out attractive subsidies. Daegu Metropolitan City, for example, has allocated around 99.85 billion won budget to electric cars out of its 430.82 billion won budget for small and medium enterprises and industries; around 92.21 billion won of the 99.85 billion won is the subsidy for buying electric cars.
Subsidy is nothing but good news for ordinary people. What is more, South Korea already has proved its capability of producing high functional electric cars and the companies can make a lot of money by targeting the South East Asian market which is huge.
The only drawback for people to still hesitate to buy eco-friendly cars seems to be the long charging hours. If I add two more drawbacks, they are the lifespan of the battery alongside and the lack of charging stations. Yet the government already announced plan for increasing charging stations so there seems to be not many reasons for us not to own an eco-friendly car while a lot of benefits are given. It will be a matter of time for quick services to change the pollutant motorbikes to eco-friendly first.
The battery capacity?
CJ Logistics has announced to start ‘battery-share electric scooter makeover’. Like the smartphone charging kiosk, electric scooter drivers are now able to swap the exhausted battery with a new one at changing polls located here and there in the city. The system was first introduced in Taiwan in the name of ‘Gogoro’ and spread fast to Germany, France, Spain and the Netherlands.
Gogoro lets the scooter drivers know the status of the battery on their smartphone so that they can find the nearest battery swapping station to change the run-out battery to a ready-to-use battery; around 600 Gogoros are set up in gas stations and convenience stores. What makes this battery-changeable electric scooter more charming is that it is quiet, noise-wise.
Considering the fact that many South East Asian countries are using scooters as their main mobility, it is urgent for electric scooter makers to supply them to the market foremost. Vietnam, for example, is registered with around 38 million motorbikes while the populations are 90 million. If we calculate the numbers except children, we can assume that almost all Vietnamese has at least one motorbike.
The age of personal mobility
Today, it is not rare to see people ride electric bicycles, electric wheels and electric kickboards on the street or park. There are three reasons for this. A, it is convenient when moving a short distance. B, riding this new mobility has become a trend. C, the price has gone down so some parents buy one as a gift for their children. These ‘fancy devices’ are called ‘eMobility’. Also coined term is ‘Smart Mobility’.
The difference is that the latter is one level upgraded version of ‘eMobility’. Some experts call it ‘Micro Mobility’ due its relatively small size. Whatever the name we call them, they share some same values: eco-friendliness, money for value and government subsidy if applied.
Small electric cars
We have witnessed that electric bicycles, electric wheels and electric kickboards have become a trend. So what is new? We are now witnessing more small electric cars on the road. What does ‘small electric cars’ mean? They are bigger than just above mentioned but smaller than the cars we see a lot on the road. What makes them charming? They are charming because of their cute and unique and compact designs as well as great value for money.
According to the industry specialists, around 20 models will be released on the market globally this year with China, Sweden, Canada and Japan taking the lead. What about South Korea? WID-U of Saean Motors is a good example. An official of this leading small electric car maker says that WID-U runs 350km at a single charge with price around mid-20 million won.
With subsidy, it will cost around mid-10 million won. Here is the wow factor: due to its excellent energy efficiency and value for money, they made grand debut at home shopping channels. Who can use this small electric car or single-person electric car? They are just perfect for commuting or driving around the town.
What’s new about electric cars?
When new things come out to the market, they seem to sell like hot pies but the demand goes downside when reaching to a certain point. Businessmen call this ‘chasm’ or ‘death valley’. What is interesting is that there were electric cars 130 years ago and up until now they are still in the death valley. POSCO Research Institute’s leading researcher Jaebum Park believes that the year 2019 will be the first year of getting out of the death valley. It is reported that 1.97 electric cars were sold globally last year and this year is expected to see the number around 4 million.
China and the US
China is the country where electric cars sold most on earth. 1.23 million electric cars were sold in China alone last year. It is 40% of the whole units sold globally last year. The US marked the second place with 760,000 units. Back to global figures, a total of 370,000 electric bus and 250 million two-wheeled electric vehicles were sold.
If we see the sales figure alone, Norway marked 39% followed by Iceland 11.7% and Sweden 6.3%. Interestingly, the vehicle powerhouse Germany seemed to be missing but the country announced to dip its whole body, instead of one foot, in the global electric car market in earnest from this year. It means that the market is expected to be more heated up than ever. BMW, for instance, announced to release 25 electric car models by 2023, a two year earlier than its original plan of 2025.
Subsidy and mandatory
Public awareness on climate change and the governments’ subsidy are playing a great role to increase sales of electric cars. No doubt, China offers the best government subsidy and promotion policy followed by Norway. If China is the No.1 in terms of unit sales, Norway is the No.1 in terms of sales figure. The European Union, on the other hand, is to introduce the CO2 Emission Targets 2030, so more and more countries are joining the introduction of mandatory number of electric cars on the road.
China and some states of the US are already putting this mandatory selling into practice while South Korea and Japan ignited their plans last June by introducing the related policy bills. South Korea especially is focusing on production and selling of eco-friendly cars including hybrid in addition to electric and hydrogen cars while Japan on improving fuel efficiency to 32% by 2030 and China on strengthening the regulation on carbon emission.
A number of prospect reports on electric cars released by various research institutes are nothing but rosy. The Electricity Vehicle Outlook published by Bloomberg New Energy Finance, for example, predicts a sharp rise of electric vehicles between the years 2025 and 2030 with 33% share of global car market by 2040. It means that 8 million barrels of oil a day is altered by electricity.
A report published by U.S. AlixParteners, for another example, sees the production of electric, plug-in hybrid and 48 volt hybrid will keep rising for the next 15 years with a share of the whole market by 35 to 40% in 2025 and more than 65% in 2030. In terms of battery price, it will draw the down line from 2025 and electric car makers will have secured price competitiveness backed up by this government subsidy.
What about South Korea? The Korean car giant Hyundai published a report that the sales figure of eco-friendly cars in South Korea increased by 31.5% as of May this year selling 42,417 units of which 13,575 were electric cars, a 72.2% increase on the same period last year.
The diesel era is dimming
The diesel gate of Volkswagen in September 2015 shocked the world and raised a greater alarm on carbon emission and climate change. In fact, when it comes to carbon emission, Volkswagen is not the only one to blame but almost all cars on the road on earth emit CO2 and nitrogen oxide more than the emission standards.
If we see this on the Total Cost of Ownership’s point of view, fossil fuels are still more efficient than electricity for the next 10 years. But the fossil fuels are facing the global CO2 Emission 2030 which makes the fossil fuels have no choice but start to pack up and leave the stage.
*Total cost of ownership (TCO) is a financial estimate intended to help buyers and owners determine the direct and indirect costs of a product or system. It is a management accounting concept that can be used in full cost accounting or even ecological economics where it includes social costs.
What is more? Experts predict that the battery price will goes down and charging infrastructure will goes up from 2025. What it tells us is that driving eco-friendly cars are no longer an option but a must as tougher regulations are imposed on the fossil fuel engines and more advantageous policies on the eco-friendly.
The Korea Automobile Manufacturers Association reported that the sales of electric vehicles, hybrid electric vehicles, plug-in hybrid and fuel cell vehicles last year increased by 24.5% last year, selling a total of 93,050 of which 30,000 were pure electric vehicles. This year, the South Korean government has more to offer than last year so those who have in mind to buy an eco-friendly car are encouraged to hurry before the subsidies and benefits dry out.
What powers electric cars?
HEV(Hybrid Electric Vehicle): HEV is powered by petrol engine and electric motor and battery. Petrol can be gasoline, diesel, liquefied petroleum gas and natural gas. We do not need to charge battery on hybrid which can run about 5km by electricity. HEV runs on petrol on highway and electricity when the speed in not required such as in city. The fuel efficiency is very good and it emits less pollutants.
PHEV(Plug-in Hybrid): PHEV is the same as HEV. The difference is that it can charge battery. Why is it called plug-in? Because we charge the battery by inserting the plug. The battery capacity is higher than HEV and it runs more distance than HEV on electricity.
BEV(Battery Electric Vehicle) and EV(Electric Vehicle): They both run only by electricity. So there is no petrol engine in the cars. The battery capacity is huge for the cars to run a long distance as well as a short distance. We charge the battery by plug-in.
FCEV(Fuel Cell Vehicle): Hyundai Motors NEXO is exactly the model of FCEV. The hydrogen is mixed with oxygen in the fuel cells to generate electricity to move FCEV. The hydrogen tank of NEXO is made with 10 times strengthened carbon fiber plastic and passed the tests on high temperature, high altitude drop, rupture and bullet shooting. Also proved by test is that it does not explode in blast furnace and 7,000 meter underwater high pressure.
Design and performance
There are many sizes and models of eco-friendly cars on the market and more are to come yet. However, recent trend tells that there is increasing level of attention to personal electric cars. One factor seems to ascribe to the government’s policy to allow personal electric cars on the road alongside the unsparing subsidy. Design also seems to be playing a part.
U-1: This Swedish made mini electric car is expected to be released on the market this year. The body is made by reusable carbon fiber and the interior materials with eco-friendly. The output is 40 horsepower and a single charge can run up to 300km but 200km after just 30 minute charging. It takes 3.5 seconds to reach to 80km per hour. The design is futuristic and we can choose a model for single person, couple, four or five.
i-TRIL: Just get ‘WOW’ by this ‘galaxy far away-like electric car’ made by the Japanese car giant Toyota. The wheels move up and down to balance the incline of the body while running. The driver’s seat is in the center with seats for two or three behind. A single charge takes you more than 200km away.
D2: This one is the most popular model in Europe. Two golf bags go into the truck. A single charge runs for 150km. The maximum talk is 90Nm and the battery capacity is 17.3kWh.
WID-U and ED-1: The former is the model of the Korean mini electric car leader Saean Motors. Recently set up its headquarters in La Vegas, US, Chairman John Lee announced to sell its electric fancy car model ED-1 from 2020 alongside its already established the mini electric car model WID-U. Lee said that Saean Korea will focus on R&D and Saean Japan on forklifts while Saean USA controls the overall business.
Thinner wallets cheaper cars
An official of the EV Trend Korea 2019 said that 475 out of the total 508 people surveyed answered that they are considering a purchase of an electric car. The lack of charging infrastructure still plays drawback but good news is that the government is pushing harder than last year to install more stations. CU also joined hands with STraffic to supply battery chargers to 13,000 CU stores nationwide staring this year. Some of us might have thought of this idea of charging or swapping batteries at convenience stores, but it seems to become ‘real’ faster than we imagined.