BYD Electric Vehicle Purchase Subsidies Suspended… Fails to Qualify as 'Electric Vehicle Promotion Project Operator'

*This content was translated by AI.

China's largest electric vehicle manufacturer, BYD (BYD), will face a complete suspension of domestic purchase subsidies for its electric vehicles. The Ministry of Climate, Energy and Environment announced the final results of the 'Selection Evaluation for Electric Vehicle Promotion Project Operators,' which was introduced for the first time this year. A total of 35 manufacturers and importers participated in this evaluation, and 27 companies were ultimately selected as project operators. BYD, which had been accelerating its efforts to penetrate the domestic market, was excluded from the final list of selected operators in the passenger electric vehicle category. BYD is the only importer among those registered on the Integrated Non-Polluting Vehicle Website as eligible for electric passenger vehicle subsidies this year that failed to qualify.

As a result of this measure, starting from July 1, domestic consumers will no longer be able to receive purchase subsidies provided by the government and local governments when buying BYD electric passenger vehicles. However, the government will continue to provide subsidies according to procedure for existing subsidized vehicles, but only for applications and registrations completed by June 30.

Zeekr Korea, which established its domestic legal entity this year and had announced the launch of premium electric vehicles, was also excluded from the list of project operators. It is analyzed that Zeekr Korea was not included in the evaluation targets because it has no official vehicle delivery records or subsidy application history in the domestic market yet. As a result, the domestic electric passenger vehicle market has effectively implemented an exclusionary measure akin to a 'reset strike' targeting Chinese direct-entry brands.

In contrast to the strict stance in the electric passenger vehicle market, a large number of companies importing and selling Chinese-made electric buses passed the evaluation, creating a sharp contrast. Companies such as Beomhan Motors and P-Line Motors, which import Chinese batteries and chassis for assembly or direct import in Korea, were named as project operators. While the government tightened restrictions on Chinese brands in the passenger vehicle sector citing supply chain contributions and after-sales management (AS), it maintained support for the bus market, where Chinese brands already hold a high market share. This has led to some confusion within the industry.

Despite the government relaxing certain qualitative evaluation items that were unfavorable to foreign manufacturers last May and significantly lowering the passing criteria, BYD still failed to cross the final threshold. Major importers including Tesla Korea, Mercedes-Benz, BMW, Volkswagen, Polestar, and Volvo, as well as domestic brands such as Hyundai Motor, Kia, Renault Korea, and KCG Mobility, were all selected as operators in the passenger vehicle sector.

It is clear that this subsidy suspension will deal a significant blow to BYD's future sales strategy as it seeks to fully enter the domestic passenger vehicle market. Chinese electric vehicles, which had relied on price competitiveness, will see their price advantages greatly diminished if they are ineligible for subsidy benefits. The Ministry of Climate, Energy and Environment plans to enhance the soundness of the domestic electric vehicle market through this policy implementation and to build an ecosystem centered on operators with strong performance and after-sales management capabilities. Detailed information, including the confirmed national subsidy amounts by vehicle model, can be verified on the Integrated Non-Polluting Vehicle Website.

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*This content was translated by AI.