Far Afield
The Hyundai Motor Group announced on Nov. 12 that it would increase the number of its eco-friendly vehicle models from seven to at least 22 between this year and 2020.
“It is expected that hybrid cars will account for more than 60 percent of the eco-friendly car market by 2020,” it said, adding, “We will triple the number of hybrid models to 12 by that year.”
Hyundai is going to release the New Sonata Hybrid next month before using the technology in various SUVs and compact and small cars. It will launch a hybrid-only model to compete with the Toyota Prius next year, too. A plug-in hybrid electric vehicle (PHEV) version of the Sonata will make its debut in 2015 as well, while five more such models will follow it by 2020. At the same time, the group is planning to release more electric vehicles (EVs) to enrich the lineup of the Soul and Ray, while continuing to work on new hydrogen fuel cell electric vehicles (FCEVs).
Limited Demand Potential Problem
However, expert consensus is that the market demand for EVs and hydrogen FCEVs is rather limited. The National Assembly Budget Office recently expressed a negative view regarding EV subsidies, mentioning that its cost, a lack of charging facilities, and the low budget execution rate for the past four years were unappealing.
“The price gap between EVs and internal combustion engine vehicles is 19.9 million won to 29.52 million won [US$18,143 to $26,916], and thus a subsidy of 15 million won is of no use,” the office explained, continuing, “More specific measures have to be taken first for the provision of the subsidy, in view of price competitiveness and technical challenges.” In the first half of this year, EVs represented just 0.11 percent of the new cars purchased during the period.
The hydrogen FCEV market is in a far more dire position. Hyundai Motor Company began the mass production of the Tucson FCEV in February last year, but has sold only 26 units to public organizations since then. The model is priced at approximately 150 million won (US$136,731), and is still expensive even after the 60 million won (US$54,708) government subsidy is accounted for. Besides, hydrogen charging stations are difficult to find, and some say a safety risk because of the volatility of hydrogen.
“FCEVs overwhelm other types of green cars when it comes to eco-friendliness,” an industry expert remarked, adding, “However, they have no chance of survival for now, due to their high price and safety concerns.” In the meantime, green cars accounted for no more than 44 percent of the vehicles used in public institutions in Korea last year.