Government Policy for Nurturing the Electric Vehicle Industry

3

EV market formation stage

- (EV stock) At the end of 2014 : 3,044 units

* EV sales are closely related with the government’s purchasing subsidy.

- (Major Players) EV : Kia, GMK, RenaultSamsung, Nissan

* HEV : Hyundai, Kia, Toyota, Ford, Honda, Benz

- (Chargers) 3,201 (Slow 2,964, Fast 237)

2014 2015 2016 2017 2018 2019 2020

The number of EV(000)

3 6(3)

16(10)

46(30)

86(40)

136(50)

200(64)

Public fast charger(cumulated)

232 432 532 632 830 1,000 1,400

Driving range(km) 160 200 230 230 270 270 300

< Figure > Government’s New Development Plan of EV Industry

4

< Kia Soul > < BMW i3 >

< GMK Spark > < RS SM3 >

Sales in 2014 : Kia Soul(414), SM3(309), Spark(70)

5

Small EV platform development consortium

- The government is supporting the development of a practical, small EV platform to be shared among EV players and invite new EV players into the market.

- Project led by engineering company and 16 SMEs in consortium for part supply and cooperative development

- A-seg. Front wheeler platform for passenger cars was developed

- A-seg. Rear wheeler plat-form is to be developed fortruck and van variants.

Competition among OEM, SMEs and Imported EVs willaccelerate from 2016.

6

< Cony, Light Commercial Vehicle ‘TX500e’ 2016 >

< Powerplaza Roadster YebbujanyR2016>

Individual SM Electric Vehicle Companies are being formed in cooperation with suppliers and investors.

- Passenger Vehicle ⇒ Light commercial vehicle & Roadster

- SMEs are planning to produce EVs in 2017.

- Producing own models and converting models

7

The government’s new sales promotion program

- Dissemination of 200 thousand units by 2020

- Providing purchasing subsidy by 2020

* Subsidy will be reduced gradually.

- Electric Car : Max. 15 mil. Won

- Electric bus : Max. 100 million Won

* Subject to grants : Ray, Soul, Spark, SM3, Leaf, i3, Rabo Peace

< Figure > Government’s Purchasing SubsidyUnit : tens of thousand Won

2014 2015 2016 2017 2018 2019 2020

Federal 1,500 1,500 1,500 1,200 1,200 1,000 1,000

Municipal 1.5 mil. Won(Seoul) ~ 7 mil. Won(Jeju)

8

Tax reduction within 4.2 mil. Won(individual consumption tax, purchasing tax)

Support installation of a slow charger for EV buyers : 6 mil. Won(Stand & Wall type) 1 mil. Won(Mobile type)

Province EV Charger Province EV Charger

Seoul 736 708 ChungBuk 6 6

Busan 103 101 ChungNam 16 16

Daegu 50 50 JeonBuk 10 10

Incheon 13 13 JeonNam 100 100

Ulsan 50 50 GyoungBuk 43 28

Gwangju 100 100 GyoungNam

210 210

Gyeonggi 104 74 Jeju 1,515 1, 515

Gangwon 34 34

< Figure > Government’s Distribution Plan(2015)

Source : MOE Note : Charger is a slow charger.

9

(Gov’t Procurement) Make 25% of EV purchase mandatory for new purchase or car rent

- Municipal governments are actively purchasing electric-powered vehicles for public use.

Hybrid Vehicle 1 million Won + Tax exemption max 3.1 mil. Won

- Less than 97g/km CO₂ emission* Subject to grants : Sonata, Prius, Prius V, Lexus CT200h, Fusion

Subsidy(mil. Won)

Units Budget(bil. Won)

Tax Reduction(mil. Won)

Others

EV 15 3,000 78.8 4.2 Charger

HEV 1 30,000 30.0 3.1 -

FCEV 28.5 33 1.9 - Only for Public

Institutes

PHEV n.a n.a n.a 3.1 -

< Table > Purchasing Subsidy and Tax Reduction(2015)

10

MEV ConsortiumSoul EV

(Kia)

SM3 ZE(Renault

Samsung)

Spark EV(GMKorea)

Rabo Peace

Models

Size Mini Small Small Mini Pick-up

Maximum speed 140km/h 145km/h 135km/h 145km/h 95km/h

One-time charge mileage

130km 148km 135km 135km 67.5km

Battery 15.1kWh 27kWh 26.6kWh 21.4kWh 17.8kWh

Price(ten thousand Won)

2,500 4,250 4,190 3,990 3,790

< Table > Comparison of Electric Vehicles

More than 10 municipal governments expand their purchasing budgets of electric power vehicles in 2015.

- Jeju Special Self-Governing Province declare to be a carbon free island by 2030.

- 852 units sold in 2013 and 2014 : 1,515 units(2015)

11

Construction of Charging Infrastructure

- Expand public rapid charging infrastructure

* The government will build at least 632 EV charging stations to make EV charging available at any time and at any place by 2017.

* Public Fast charging station : 237 at the end of 2014.

- Build 1,400 charging stations through cooperation between

government and private sectors.

• Established Charging SPC : 10 participating companies including Hyundai, LG CNS, KT, KEPCO

• Charger Manufacturers :

- Fast(4)- KODI∙S, PNE, SIGNET, HABA

- Slow(6)- LS, LG CNS, KODI∙S, PNE, SIGNET, HABA

12

< Figure > EV Charging Infra.

Seoul 915

Daejeon/Chungnam170

Others 679

Gwangju/Chunnam373

Kyeongnam 271

Jeju 793

EV charging stations are concentrated in Seoul and Jejuand operate alongside the express highway.

- The government supports the private sector to lead EV charging business via SPC participation.

Municipal governments actively introduce electric-power vehiclesfor public use and build charginginfrastructure.

- Metropolitan cities are introducingbattery electric taxis, buses and CNG hybrid buses for publictransportation.

* EV: 140 taxis, 60 buses, 30 trucks

* 300 CNG Hybrid Buses in 6 Metropolitan cities.

13

Developing various business models for EV.

- Nurturing the private sector leads charging service business and battery lease business(2017)

- (Private charging business) Provide a paid EV charging service that is available for 24 hours, like a gas station.

- (Battery lease) Allowance of battery lease business for public entities, capable of going long distances including EV buses, taxis and rental cars.

* Taxi and bus companies pay for the price of only the car body and battery lease companies pay for the battery price

providing lease, maintenance and charge services.

- (Formation of ecosystem) of used E.V. insurance and repairing.

- Promote start-ups and SMEs in electric-power vehicle industry.

14

(Investment) OEMs and SMEs are starting to accelerate

EV development and commercialization

- Hyundai will launch the Sonata PHEV in the second half of 2015 and Avante EV/Hybrid in 2016.

* Hyundai will introduce 12 HEVs, 6 PHEV, 2 Evs, and 2 FCEV by 2020.

- GMK renewed the Spark EV and will launch the Volt in 2016.

- RenaultSamsung will introduce the mini Twizy EV of

Renault for a test-drive in Korea.

- Kia will introduce the K3 EV in 2016.

- Nissan is accelerating sale of the Leaf in Jeju island.

- Toyota is introducing various hybrid models to compete

with European diesel in the Korean market.

15

Building Infrastructure for successful commercialization

of FCEV.

- Test beds & proving grounds in metropolitan areas.

- FCEV parts cluster and SME

supporting center in Chung-

nam and Gwangju.

- Supply of by-produced

hydrogen from Ulsan, Chung

-nam and Chunnam.

- Collaboration and differen-

tiation

☞ 72 units in 2015.

FC Town

FCEV Proving ground

Tech. Supporting Center

< Figure > FCEV Infrastructure

FC

MakerPlace

FC Parts

Cluster