Enemy at the Gate: France and Germany form battery alliance, South Korea may stop subsidizing Chinese cars

This year's transition period for the new policy on new energy subsidies is approaching, and the domestic new energy vehicle industry chain will face a "reshuffle" of elimination competition, but this is only an internal worry; now, the external worries facing my country's power battery industry chain are becoming increasingly obvious.

France and Germany form a multinational battery alliance to reduce dependence on Asian batteries

According to a recent report by Reuters, a German official said that France and Germany asked the European Commission to approve state subsidies for their multinational battery alliance, which includes automaker PSA Group and its German unit Opel, as well as French battery maker Saft.

It is reported that France and Germany have allocated a total of US$1.9 billion to support the electric vehicle battery alliance, thereby reducing European automakers' dependence on Asian power battery suppliers and protecting the impact on employment caused by reducing the use of internal combustion engines .

South Korea calls on the government to stop subsidizing Chinese electric vehicles because of battery subsidies

Recently, a South Korean automaker lobbying group called on the South Korean government to stop subsidizing Chinese-made electric vehicles, arguing that subsidies for Chinese-made electric vehicles could pose a threat to South Korean local automakers, while electric vehicles equipped with Korean batteries in the Chinese market are excluded from subsidies.

Chinese automakers may push forward plans to export electric vehicles to the South Korean market due to declining subsidies and the Sino-US trade war, the chairman of the Korea Automobile Manufacturers Association said.

South Korean officials said that South Korea's current subsidy policy for electric vehicles remains high.

Jeong, head of a lobbying group representing Hyundai, Kia and other South Korean automakers, said that although Chinese automakers are increasing electric vehicle sales in the South Korean market, electric vehicles equipped with South Korean batteries are not eligible for Chinese subsidies in China. China has created an unfair competitive environment for foreign brands, and if China refuses to subsidize electric vehicles equipped with South Korean batteries, then South Korea should also refuse to subsidize Chinese-made electric vehicles.

According to Korean industry survey data, last year South Korea's electric vehicle subsidies for foreign automakers were about 110 million yuan, and Chinese automakers including BYD received 40% of the share.

The appeal of the Korean automakers' lobbying group seems reasonable, but judging from the amount of subsidies, the annual subsidy amount for foreign automakers is limited; in addition, Korean automakers have received investment and tariff concessions in traditional auto businesses and other consumer battery businesses. In fact, with the Foreign Investment Law about to be implemented and my country's further expansion of opening-up efforts, Korean battery manufacturers have begun to make continuous moves in China. At the Shanghai Auto Show not long ago, South Korea's SK Innovation displayed batteries produced domestically. Therefore, it is only a matter of time before Korean battery manufacturers' batteries are installed in cars domestically. Interestingly, this lobbying group only has automakers, but no support from battery manufacturers.

After major European automakers such as Volkswagen, Daimler, Mercedes-Benz, and BMW have successively made efforts in the field of new energy vehicles, adhering to the strategy of "keeping the wealth within the family", they will inevitably drive the rise of European power battery companies; while old Japanese and Korean companies are eyeing them covetously. Domestic battery manufacturers are under internal and external troubles as subsidies are declining, and they feel a sense of crisis that the enemy is at the gates and winter is coming. In this context, it is best for companies to work together to discuss major plans. To this end, OFweek will hold the 2019 OFweek New Energy Vehicle Industry Conference in July after the subsidy transition period. At that time, academic experts and big names in the industry chain will be invited to attend the "Huashan Sword Contest" on current hot topics and cutting-edge technologies. Registration for the event will be launched soon, so stay tuned.