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China Excludes S. Korea in New List of EV Subsidy Beneficiaries Again
Reflected Benefits to Japan
China Excludes S. Korea in New List of EV Subsidy Beneficiaries Again
  • By Jung Min-hee
  • September 6, 2017, 02:00
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Chinese government announced on Sept. 1 a new list of green car subsidy beneficiaries, excluding Korean companies such as Samsung SDI and LG Chem while including Japanese manufacturers.
Chinese government announced on Sept. 1 a new list of green car subsidy beneficiaries, excluding Korean companies such as Samsung SDI and LG Chem while including Japanese manufacturers.

 

On September 1, the Chinese government announced a new list of green car subsidy beneficiaries. According to the list, its subsidies are provided for 273 electric vehicle (EV) models manufactured by 95 automakers. None of the models comes with a battery supplied by a South Korean company such as Samsung SDI and LG Chem. The same has been repeated since December 29 last year.

On the contrary, vehicles equipped with batteries supplied by Japanese manufacturers began to be included in its lists in mid-2017. The Chinese government has released a total of eight lists since December 29, 2016, and those equipped with AESC’s batteries have been found on the four latest while those with Sanyo Energy’s have been found on the two latest.

China’s EV battery shipments skyrocketed from 0.66 GWh to 28.04 GWh between 2012 and last year and the amount is estimated to reach 151.6 GWh in 2021. Nonetheless, EV battery export from South Korea to China is on the decline due to discrimination. Specifically, the amount fell from US$1.576 billion to US$1.002 billion between 2012 and 2016. China’s EV battery import from Japanese manufacturers, in contrast, increased 13.4% from US$580.71 million to US$658.56 million between 2015 and 2016. Panasonic’s new vehicle battery manufacturing plant has been in operation in Dalian since April this year.

According to the Korea International Trade Association, South Korea and Japan had a similarity index of 57.5 points in the Chinese import market in 2015, when the index was much higher than that between South Korea and the U.S. (32.7) and that between South Korea and Germany (29.8) in the same market. This means Japanese companies can benefit the most from a decline in South Korean companies’ exports.

During the first seven months of this year, Hyundai Motor Company and Kia Motors sold 500,964 cars in the Chinese market, down 45.5% from a year ago, while the sales of Toyota, Nissan and Honda in the same market increased 11%, 11.2% and 23.2%, respectively.

According to the Korea Tourism Organization, a total of 281,263 Chinese tourists visited South Korea in July this year, down 69.3% from a year earlier, whereas 780,800 Chinese tourists visited Japan during the same period, showing a year-on-year increase of 6.8%. Under the circumstances, the sales and operating profits of South Korean cosmetics manufacturers such as Amore Pacific and Able C&C dropped in the first half unlike those of their Japanese counterparts.