Renault-Samsung inks contract with South Korea’s Environment Ministry to promote EVs

Renault-Samsung has signed a memorandum of understanding (MoU) with the South Korean Ministry of Environment and six other companies to promote the use of electric vehicles (EVs) in the country, reports Yonhap English News.
The automaker will price its EV below KRW45 million won (US$40,378) and the environment ministry will provide subsidies to companies and public offices to buy EVs.
Renault-Samsung and the government will also work together to set up the necessary infrastructure for EVs, such as charging stations. Other details of the MoU were not revealed.
Meanwhile, GM Korea CEO Sergio Roch announced that the automaker’s next-generation EVs to be produced in South Korea would be slightly bigger than its Spark EV. The next-generation models would use a new design unlike the Spark EV, which was based on an existing gasoline engine model. GM Korea started production of the current generation of the Spark EV in South Korea this month for export to the U.S. market.
The MoU comes as Renault-Samsung gears up to sell its SM3 Z.E., a compact EV, in the second half of this year. Renault-Samsung is hoping the release of its new electric car will partly offset falling sales as it has been suffering due to a lack of smaller, fuel-efficient vehicles marketed in the country.
Simultaneously, many automakers such as BMW, Volkswagen, and GM Korea have announced plans to make headway in the EV market. However, despite the government’s best intentions, demand for EVs is still sluggish in the country, owing to lack of widespread infrastructure and high costs. Even public organizations, which have been in the forefront with support of the central government for the past year, have themselves been slow to adopt EVs.
To add to this, the South Korean government last November went back on plans to offer a tax benefit of up to KRW4.2 million (US$3,769) on the purchase of every electric car that falls short of the subsidies offered by the other governments, which will act as a further deterrent to EV sales.
(April 1, 2013)