The South Korean government announced that it would modify the law to permit battery subscription services for electric vehicles (EVs) to reduce EV prices by almost a third from their current levels and increase sales, as reported by The Korea Herald on August 1. The amended law, expected to take effect this year, will permit separate ownership of an EV and its battery by different owners. Under the amended law, manufacturers or financial institutions can own EV batteries and rent them to EV buyers who then pay for the service on a monthly basis.
According to industry experts, a separate battery pack might drastically lower the price of EVs, which would encourage more people to buy them. The South Korean government has been collaborating with domestic firms to provide EV battery leasing services. Last year, the country’s Ministry of Trade, Industry, and Energy signed a partnership agreement for battery service for EV taxis with LG Energy Solution [373220:KS], Hyundai Group, Hyundai Glovis [086280:KS], and KST Mobility. As part of the agreement, Hyundai will sell EVs to KST Mobility, which will then transfer ownership of the batteries to Hyundai Glovis. After that, KST Mobility pays Hyundai Glovis a monthly lease charge, and Hyundai Glovis sells the spent batteries to LG Energy Solutions for recycling. South Korea sold 68,528,000 EVs in the first half of this year, an increase of 73.5% YoY.