Is South Korea Excluding Chinese Electric Buses? The New Battery Rules Change Everything

South Korea has updated the criteria for incentives dedicated to electric buses with new rules that directly affect the technologies used by manufacturers. The revision, requested by the Ministry of Land, Infrastructure and Transport, substantially modifies access to public subsidies for transport operators, as reported in a source.

The financial contribution remains high, at a maximum of about 90 million won per vehicle (around 60 thousand euros), but the key parameter has changed: the energy density of the batteries comes into play. Models that do not reach certain levels can no longer obtain full funding, consequently reducing their competitiveness in the local market.

The new threshold for accessing full incentives is set above 500 Wh/L, a value that favors NCM batteries produced by South Korean companies. Conversely, batteries with a density equal to or less than 365 Wh/L receive a reduced coefficient, resulting in a significant cut in the contribution. This difference directly penalizes LFP batteries, widely used by Chinese manufacturers.

Brands most affected include BYD, along with other Asian producers, who in recent years had gained space in the country, covering about 34% of the electric bus market. The new rules make purchasing these vehicles less advantageous for public transport operators.

The change also fits within a broader context related to the perception of battery safety. After a fire involving a Mercedes EQE electric sedan with cells produced by the Chinese company Farasis Energy, the government requested greater transparency from manufacturers regarding the origin of the batteries. This incident has affected consumer trust and has also influenced industrial choices.

Some brands are already adapting their strategies. Porsche has announced that it will sell electric vehicles in the South Korean market equipped exclusively with local batteries, considered more reliable by a segment of the public.

The new guidelines strengthen the position of national manufacturers, including Hyundai and KGM Commercial, and mark a significant shift in the global competition for electric mobility technologies, where political choices increasingly impact market dynamics.