Seoul Excludes Expensive EVs from Subsidies
Tesla has called for the South Korean government to change its low-emission car expansion plan, claiming that the plan discriminates against itself and violates the principle of national treatment of the KORUS FTA.
The plan implemented this year is to maintain a certain green car manufacturing ratio in each car seller, impose fines on those failing to reach it, and provide incentives for the others. The plan is applied to every automaker that sold at least 4,500 cars in 2009. Tesla is not one of them.
According to industry sources, tens of billions of won a year is likely to be added to Tesla's profits once the plan is applied to it. This is because the incentives are provided in the form of credits and the credits are market-tradable. Given that the fine is likely to be three million won per vehicle, each credit is estimated at three million won. If so, Tesla's additional annual profit will be at least 30 billion won or so.
According to the government, the plan is not discriminatory at all, and it is related to previous FTA revision talks. Three years ago, South Korea and the United States decided to apply less strict emission rules in their FTA for 2021 to 2025 to each company selling less than 4,500 cars a year. "The U.S. government requested exceptions for smaller sellers such as Cadillac and its demarcation was 4,500 units,” the government explained.