Hyundai Motor Looks to Bolster Presence in China with EV Models Eligible for Subsidies

The Hyundai Motor electric vehicle Encino, which is the Chinese version of the Kona, has made the list of electric vehicles eligible for subsidies from the Chinese government as it was loaded with Chinese-made batteries.

The Korean carmaker used batteries from CATL, a Chinese battery maker, in an electric car launched in 2017 after electric cars powered by Korean-made batteries were excluded from the list due to the Terminal High Altitude Area Defense (THAAD) incident.

Developed by Beijing Hyundai, the Encino EV was approved by the Chinese government in May. Buyers of the model can receive electric vehicle subsidies from the Chinese government, industry sources said on June 2. Considering that it will take about two months to launch a new model after its certification in China, the Encino EV is scheduled to go on sale in China next month at the earliest.

Automobile production in China fell 4.2 percent last year, the first time in 28 years, but sales of new cars such as electric cars surged 62 percent to 1.62 million units, making China the only country in the world where annual electric car sales surpassed one million units.

Beijing Hyundai took the wraps off its Encino EV and the Lingdung PHEV (the Avante AD in Korea) at the Shanghai Motor Show in April and announced that it would launch the two models in the second half of this year.

Hyundai Motor loads LG Chem's batteries in the Kona EV for sales in Korea or exports abroad except China. The Korean automaker was forced to use batteries from CATL for sales in China due to the battery subsidy issue. The Chinese government’s battery subsidy list already included the Uedung EV, the local model of the Avante HD, in February last year as it was powered by CATL batteries. Previously, this model had been equipped with Korean-made batteries, as well.

However, as China is expected to abolish its EV subsidy policy after the end of next year, industry observers forecast that foreign-made batteries will be also used in Chinese electric cars in the future.