A new Korean policy is hoping to incentivize local car manufactures to build more electric vehicles (EVs), though the policy won’t help every car company on the market, at least in its current state.
On Thursday, Korea Times reported that Tesla is claiming the Korean policy to be unfair, due to a clause that states benefactors must have sold at least 4,500 vehicles in the country as of 2009 – which certainly is not the case for Tesla.
Tesla claims that the policy goes against the national equitable treatment principle under a Free Trade Agreement between Korea and the US (KORUS FTA). This principle mandates that the government must treat local and foreign businesses equally, since foreign products will have entered Korea’s market.
SOUTH KOREA: Tesla protests against Korea's green car incentive program #PoliticalPolicyResistance https://t.co/ar82mR1DU5
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Details of the policy have yet to become public. However, it is known that companies that reach yearly requirements for eco-friendly vehicle production will be able to trade surplus credits with other companies.
If Tesla were to be included, it would undoubtedly reap a huge revenue share from the trading credits – perhaps one reason why the policy was created without Tesla’s inclusion.
One official from the country’s Ministry of the Environment told reporters on the phone, “The purpose of the policy is to encourage conventional carmakers to make the switch to green vehicles, and therefore including a company that only produces electric cars wouldn’t be aligned with the aim of the policy.”
The official continued, “If an EV company were to become subject to the policy, however, the policy would need to be complemented accordingly.”
