No other industry player may be more dismayed by the result than South Korea’s leading automaker Hyundai, which had registered 1,164 orders for its FCEV model NEXO in presales as of April 4. (Image: Yonhap)
SEOUL, April 6 (Korea Bizwire) — The omission of an additional increase in subsidies for fuel cell electric vehicles in the government’s supplementary budget proposal announced yesterday has left the FCEV industry disappointed by the lack of support.
No other industry player may be more dismayed by the result than South Korea’s leading automaker Hyundai, which had registered 1,164 orders for its FCEV model NEXO in presales as of April 4. A midsize SUV that emits no pollutants and is equipped with the latest in car tech, the Nexo’s selling point was that an eco-friendly car of high caliber could be purchased at a reasonable price with the help of both central and local government subsidies.
However, with no additional funds allotted for subsidies, the government only has the resources to help cover the cost of 240 Nexos (22.5 million won per vehicle), meaning buyers of the other 924 will not be receiving financial assistance and will likely walk back their commitment to purchasing the SUV.
Though it was reported that individual administrative regions such as Ulsan Metropolitan City had been deliberating on expanding FCEV subsidies, inaction on the part of the central government effectively made such deliberations pointless. As the subsidies in question are funded equally by the central or local governments, for one side to act alone is not a viable option.
As the news of the government’s supplementary budget proposal spread, industry insiders have been left disheartened when taking into account South Korea’s position as a global leader in FCEV technology and the environmentally-friendly impact of having more green cars on the road.
Among eco-friendly, next-generation car technology, FCEV is the only category in which South Korea has taken the lead. However, should supply be unable to keep up with demand domestically because of a lack of sufficient government support, the worry is that South Korea would eventually be overtaken by other countries.
President Moon Jae-in testing out the Nexo (Image: Yonhap)
That the government is penny-pinching in providing support for FCEVs, which have a more positive impact on the atmosphere than electric cars, has rubbed manufacturers the wrong way.
According to Hyundai, one Nexo can purify enough air for 43 adults. If 1,000 Nexos were on the roads, they could eliminate particulate matter generated by 2,000 diesel cars.
Lina Jang (linajang@koreabizwire.com)
