SEOUL, Jan. 4 (Korea Bizwire) — Despite the agreement between the Chinese and South Korean governments made last October to resume normal ties, it appears domestic electric car battery manufacturers are still feeling the brunt of China’s ill feeling, as the Chinese government once again excluded EVs equipped with South Korean batteries from its list of vehicles qualifying for subsidies.
According to industry watchers, China’s Ministry of Industry and Information released the list on December 29 last year.
As subsidies can cover up to half the cost of environmentally-friendly cars in China, omission from the list makes the prospect of conducting business for auto companies a difficult proposition.
The blacklist for South Korean electric car battery producers Samsung SDI and LG Chem goes back to December 29, 2016.
At the time, the Chinese government disclosed its list in the pre-noon hours, which included four different models carrying South Korean electric car batteries. In the afternoon, a revised list was published, with the four models nowhere to be seen.
Since then, EVs with South Korean battery tech have been absent from all similar lists.
Compounding matters, Samsung SDI and LG Chem have failed to be certified by the Chinese government since it began an inspection program in 2016.
Both firms applied for and were disqualified in June 2016. Though they have been preparing for the next round of inspections, the Chinese government has not accepted their applications, leaving them hanging in the balance.
As Chinese EVs with South Korean batteries continue to be missing from the lineup of cars subsidized by the Chinese government, those inside and outside the industry are concerned that Samsung SDI and LG Chem are losing ground in the vital Chinese market.
One industry insider said, “Though South Korea and China have stitched up the rupture in their relationship caused by the THAAD dispute, it seems as though it will take more time for the battery industry to benefit from the diplomatic arrangement.”