'Separate Ownership of Vehicles and Batteries,' Seminar Hosted by National Assembly Member Son Myeong-soo Held at the National Assembly

*This content was translated by AI.

Hosted by National Assembly Member Son Myeong-su (Rep.)'s office and organized by the Korea Automotive Mobility Industry Association (KAMA), a seminar titled "Separating Electric Vehicle Battery Ownership, Opening a New Mobility Market" was held on the 22nd at the National Assembly Conference Center.

In addition to Professor Lee Jong-wook of Korea University of Technology and Education, attorney Kwon So-dam, and Eom Seong-bok, director of the research institute under the Korean Automotive Safety Association, designated panelists included government officials from the Ministry of Land, Infrastructure and Transport, the Ministry of Trade, Industry and Energy, and the Ministry of Climate, Energy and Environment. Experts from LG Energy Solution, Hyundai Capital, POEN, and the Korean Electric Vehicle Users Association also participated.

The seminar emphasized the need to pass a revision to the "Automobile Management Act" at the National Assembly that would separate ownership of vehicle bodies and batteries to promote electric vehicle adoption and enhance consumer benefits. The discussion proceeded by presenting grounds for why vehicle body and battery ownership must be separated, as the current system does not allow such separation.

As the seminar was hosted by National Assembly Member Son Myeong-soo's office, a corresponding bill has also been prepared. The bill includes provisions for introducing the concept of leased traction batteries, registering separate ownership of vehicle bodies and batteries, indicating battery lessors in automobile registration records, setting entry requirements for leasing businesses, and establishing consumer protection standards. It was explained that once batteries transition from being "vehicle components" to "independent assets," consumers could purchase only the vehicle body while using batteries through subscription or lease models, significantly reducing initial purchase costs and mitigating risks related to battery performance degradation and declining used car residual values.

Attorney Kwon So-dam of Geumho Law Firm explained the legal basis for separating ownership of electric vehicles and batteries by citing cases from China, the United States, and Europe in the electric vehicle industry sector. While the core concept was clear, she noted that issues such as insurance coverage, consumer perceptions of electric vehicle ownership, and total cost of ownership perspectives remain future challenges. Professor Lee Jong-wook of Korea University of Technology and Education, despite being an academic, proposed seven business models: battery subscription (BaaS), banking, swap and capacity flexibility, mobile energy, V2G·VPP, diagnostics and valuation, and lifecycle recycling. However, from the essential perspective of revenue and financial viability within these business models, no clear solutions were identified.

In the subsequent discussion, participants reached a consensus that passing the bill is a critical prerequisite for activating the battery lifecycle industry. The main theme of this seminar, organized by KAMA, which advocates separating ownership of vehicles and batteries, aligns with Hyundai Motor Group's announcement on April 28 that Hyundai Motor and Hyundai Capital will jointly launch a pilot project for an electric vehicle battery subscription service targeting corporate taxis whose warranty periods expire during the first half of this year.

On the other hand, some pointed out potential pitfalls and adverse effects regarding the separation of vehicle body and battery ownership, which is a key discussion point of this seminar. If monthly subscription fees and financial costs accumulate while purchasing vehicles at lower prices, consumers may end up paying more in total over the long term compared to fully owning a vehicle outright. Additionally, concerns were raised that from an ordinary consumer's perspective, contract structures could become overly complex regarding insurance coverage for battery damage in accidents, transfer of subscription contracts when selling used cars, and battery repossession in cases of default, potentially leading to unforeseen consumer harm or disputes.

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*This content was translated by AI.