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Jeju cranks up EV incentives

Carmakers compete to secure generous electric vehicle incentives in Jeju

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Published : 2014-01-05 19:42
Updated : 2014-01-05 19:42

BMW i3

California, boasting generous incentives and wide charging networks, is one of the most favored destinations for carmakers to introduce their electric vehicles. But more recently a growing number of global players are piling onto Korea’s Jeju island, which promises even more attractive benefits.

BMW will debut its first full-electric compact, the i3, in May in Korea, while Nissan’s Leaf, the best-selling electric car globally, is finalizing its entry plan to sell cars from as early as in the first quarter. Other carmakers such as California’s Tesla Motors are also eying the Korean market, especially Jeju.

Tesla Model S

“Korea may not be an attractive market for electric cars considering their lukewarm sales. But for Jeju alone it is a whole new different story,” said a Jeju official.

There are some 300,000 vehicles on the roads in Jeju, while the provincial government aims to replace all the cars with electric vehicles by 2030. The 190-kilometer-long road around the island is within the driving range of most electric vehicles on a single charge.

And one of the most intriguing factors that have enhanced Jeju’s affinity for EVs is its lavish cash incentives ― the highest-level around the world.

Jeju provides a combined 23 million won ($21,800) in rebates for EV purchase. The amount is almost double those in other countries. The United States and Japan ― the two top-seller markets of electric cars ― offer up to $10,000 and $13,300 (or 1.39 million yen), respectively.

In a market dominated by Korean-made models such as Kia Motors’ Ray, GM Spark EV and Renault Samsung’s SM3 Z.E., foreign brands, equipped with more powerful lineups, are expected to secure price competitiveness to become a direct threat to the less sexy, high-priced Korean competitors.

Adding to concerns of Korean players, carmakers are fixing their car prices lower than expected. The BMW i3 compact is sold at 34,950 euros ($45,900) in Germany, almost the same level of the cheapest BMW 1 Series, while the Nissan Leaf is priced at $28,800 in the United States. 

Nissan Leaf

People in Jeju, including the soaring number of travelers there, also seem willing to adopt electric vehicles for their commutes.

Last year Jeju issued some 160 rebates on EV purchase and a total of 472 people applied to win the benefits. This year, the provincial government plans to issue some 500 rebates to speed up electric mobility.

“Jeju is a perfect test bed for electric vehicles,” said the Jeju official. “We plan to maintain the highest-level of incentives to lure more global brands.”

With Hyundai Motor, the nation’s largest carmaker, focusing more resources into fuel-cell vehicles, BMW, the best-selling foreign car brand here, is the leading player in spurring the electric car market overall.

BMW Korea, which has hosted several academic conferences on electric mobility, has signed an agreement with the Jeju government more recently to support charging infrastructures for electric vehicles.

“Unlike other carmakers that redesign their existing models, BMW has come up with a whole new concept for their electric cars,” said BMW Korea CEO Kim Hyo-joon. The company is pinning high hopes on the new car in Korea.

Making Korea a more attractive destination for electric models is the nation’s two battery makers ― Samsung SDI and LG Chem ― that are supplying their lithium-ion batteries to global carmakers.

When Tesla held its first investor relations event in Seoul in November, Jeff Evanson, IR vice president, also hinted that the electric sports carmaker was in discussions with the Korean battery makers, calling Korea “an exciting market.”

By Lee Ji-yoon (jylee@heraldcorp.com)

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