Driven to Giving UP
The Chinese government has yet to loosen its grip when it comes to electric car batteries manufactured by Korean companies. All eco-friendly car models with Korea-produced batteries were excluded from receiving subsidies for the ninth time this year.
According to related industries on October 10, the Chinese Ministry of Industry and Information Technology (MIIT) announced on the 30th of last month its targets for green vehicle subsidy payouts for the ninth time this year. The MIIT selected 251 models of electric vehicles (EV) and plug-in hybrids (PHEV) from 95 companies, but electric cars equipped with batteries produced by LG Chem, Samsung SDI, and other Korean companies reportedly were omitted from the list.
The Chinese government’s restrictions on subsidies for cars with Korean car batteries has been bubbling under the surface since the end of last year, five months after Korea agreed to the THAAD deployment.,
In the morning of December 29 last year, the Chinese government announced that it would be giving subsidies to 498 electric car models from 95 companies, including the models equipped with electric car batteries produced by LG Chem and Samsung SDI. But that afternoon, the ministry suddenly retracted its support for five models equipped with Korea-manufactured batteries and made another official announcement listing 493 models.
Since then, the MIIT has updated the list in its entirety nine times between January and September of this year, but only the car models utilizing Korean batteries have failed to make the list even once. A total of 2,789 models from 199 different companies received subsidies in 2017 alone.
As the situation persists, Chinese automobile companies are giving up on applying for subsidies on cars with Korean batteries. For Chinese electric car makers, subsidies make up more than half of the price of the vehicle. If companies cannot receive government aid, the possibility of selling these cars is slim to none. An Industry official said, "Chinese car companies with Korean batteries will think ‘it’s no use to try’ so they will not continue applying for subsidies,” fearing, "If the situation continues, it will solidify China’s move away from Korean products.”