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Gov't scrambles for solution as Chinese electric buses take lead in Korea
2024-02-16
Newly registered Chinese-made electric buses outnumbered their Korean counterparts last year despite the government's attempt to limit its penetration into the local market.
 
As Chinese-origin buses have been increasing their presence on Korean streets — despite reduced subsidies for buses equipped with low-efficiency batteries — the government is likely to continue to suppress their market presence this year, utilizing a subsidy scheme.  
 
Of the 2,815 newly registered electric buses last year, 1,522 were from China, according to the Korea Automobile Manufacturers Association's report released Feb. 6. The remainder — 1,293 buses — were from Korean automakers.
 
Last year was the first time in which the number of newly registered Chinese electric buses exceeded the number of Korean buses.
 
Increasing calls for sustainability in the automotive industry sparked demand for electric buses.
 
In 2019, only 550 electric buses were cataloged in the registry. Back then, 145 buses were from China.
 
The overall count of electric buses quadrupled over four years, reaching 2,815 last year.
 
Chinese buses have gained a noticeable presence in Korea, with 352 in 2020 and 480 in 2021. In 2022, a total of 868 electric buses were imported from China.
 
Chinese electric buses are marching into the Korean market with a low price tag.
 
An electric bus made by Korean automakers is sold at around 350 million won ($262,800), while a Chinese bus is priced around 250 million won.
 
Korean automakers use nickel-cobalt-manganese (NCM) batteries, which can make higher levels of horsepower while driving. On the other hand, Chinese manufacturers use lithium iron phosphate (LFP) batteries, which are cheaper than NCM batteries.
 
Chinese electric buses also demonstrate improved driving performances.
 
Chinese-made BYD's eBus-12 can travel 503 kilometers (312 miles) on a single charge. The model is in use for intracity buses in Seoul.
 
On the other hand, Hyundai Motor's Elec City can drive 420 kilometers.
 
"There is not much difference between the two models when it comes to actual driving," an official from the transportation industry said.
 
The Chinese company scaled up the battery volume to extend the driving distance.
 
BYD's buses are equipped with 383 kilowatt-hour LFP batteries and Hyundai's model comes with 290 kilowatt-hour NCM batteries. The larger battery capacity enabled Chinese buses to travel longer distances.

The Korean government will maintain its policy to counter Chinese-origin electric buses by downsizing the subsidies available for buses with low-efficiency batteries.
 
The Ministry of Environment on Feb. 6 announced a benefit plan, which is favorable for EVs with a higher energy density and recyclable batteries.
 
Generally, the energy density level of NCM batteries is higher than that of cheaper LFP batteries.
 
The domestic transportation industry is introducing hydrogen electric buses and developing overseas export markets to deter Chinese automakers' aggressive marketing in Korea.
 
Hyundai Motor plans to begin mass production of mid-sized electric buses while placing efforts into boosting its hydrogen vehicle portfolio.
 
Seoul Metropolitan Government aims to replace some 1,300 buses with hydrogen-powered vehicles, though its expensive price tag poses a challenge.
 
KGM Commercial plans to produce its self-developed mid-sized electric buses at its Gunsan plant in North Jeolla this year. It is also devising a way to export its half-assembled models to Southeast Asian countries.
 
Experts advised that governmental funds should not fall into the wrong hands even when they cannot restrain the expansion of Chinese electric buses in the Korean market.
 
"Using LFP batteries for intracity buses will not cause any significant inconvenience because they operate over short distances," Lee Hang-gu, head of Jeonbuk Institute of Automotive convergence Technology, said. "The government should establish a flexible system by thoroughly monitoring how subsidies are channeled into automakers, not only focusing on policies."
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