South Korea to Pilot EV Battery Subscription Service in October, Slashing Vehicle Costs

South Korea will launch a pilot program for an electric vehicle (EV) battery subscription service in October 2024, initially covering 2,000 EVs. Under this model, consumers will purchase only the vehicle body without the battery and lease the battery on a monthly basis. The standard version of Hyundai’s Ioniq 5 currently sells for approximately 47.4 million KRW (about RMB 263,300), with the battery accounting for roughly 20 million KRW (about RMB 111,100). With the battery subscription model—and combined with national and local government subsidies—the vehicle body price drops to 19.4 million KRW (about RMB 107,800). This initiative stems from 16 agenda items, including the “EV Battery Ownership Separation-Based Subscription Service,” recently approved by South Korea’s Eighth Mobility Innovation Committee under the Ministry of Land, Infrastructure and Transport. Current regulations under the Automobile Management Act previously required unified ownership of both the vehicle body and battery. The new policy introduces a regulatory sandbox system, allowing companies to conduct phased pilots for up to four years, enabling separation of battery and vehicle ownership. Under the plan, Hyundai Motor will participate in the project and retain full responsibility for vehicle safety, including recalls. Battery leasing companies will manage battery operations, maintenance, and end-of-life recycling to establish a circular resource system and help control subscription costs. Although some public concerns have been raised that long-term subscriptions could increase user burdens, authorities emphasized that existing consumer protection and safety management frameworks will remain unchanged. Additionally, the committee approved several measures to accelerate the commercialization of autonomous driving, including expediting the development of Gwangju as a demonstration city for autonomous vehicles.