[2020 National Audit] "Electric Two-Wheeler Subsidies Only Enrich Chinese Importers... 16.8 Billion Won Over 2 Years"

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[Asia Economy Reporter Kim Bo-kyung] Criticism has arisen that the government's current electric two-wheeler subsidy policy only benefits Chinese importers. Over the past two years, subsidies provided to Chinese products have exceeded 16.8 billion KRW.

On the 7th, Kim Seong-hwan, a member of the National Assembly's Industry, Trade, Energy, Small and Medium Enterprises Committee from the Democratic Party of Korea, urged inter-ministerial cooperation and the establishment of industrial measures during the Ministry of Trade, Industry and Energy’s audit, stating, "The distorted electric two-wheeler policy is only fattening Chinese electric two-wheeler importers."

Analyzing data from the Ministry of Trade, Industry and Energy and the Ministry of Environment, Representative Kim pointed out, "Subsidies paid to Chinese imported finished products or so-called 'rebranded' products?Chinese-made items imported and only superficially altered?amounted to 14.3 billion KRW, which is 52% of the total 27.5 billion KRW subsidies last year." In 2018, about 2.55 billion KRW was also provided to Chinese products, making the total subsidies to Chinese products over two years approximately 16.85 billion KRW.

Representative Kim criticized, "The reason Chinese products have come to dominate the domestic electric two-wheeler market stems from the failure of the subsidy policy." For example, a Chinese model sold locally for 1.77 million KRW receives a domestic subsidy of 2.3 million KRW as of last year. Due to unreasonable subsidies, even 'free' electric two-wheelers have appeared, he pointed out.

He further criticized, "Exploiting loopholes in the subsidy payment process, some sellers and companies illegally receive subsidies through document forgery without actual transactions, share the subsidies, or commit crimes such as receiving subsidies under another person's name and reselling the electric two-wheelers online to gain profits again."

Unlike automobiles, two-wheelers have lax chassis number management. Subsidies can be received with documents alone without physical verification, and there is no obligation for regular inspections or reporting periods upon scrapping, resulting in inadequate management throughout the 'production-sale-operation-disposal' process. It is impossible to know whether subsidized electric two-wheelers are actually in use or are ghost vehicles. Some cases have been reported to the police and are under investigation.

Representative Kim criticized, "Subsidies should be expanded in conjunction with the growth of manufacturers, but without industrial measures and only subsidies being provided, the market is being lost to foreign countries and various illegal activities are rampant." He added, "Although there are 2.24 million registered two-wheelers domestically, representing a huge market worth over 8 trillion KRW, the Ministry of Trade, Industry and Energy does not even have a dedicated team and is neglecting this sector."

He emphasized, "The transition to electric two-wheelers is an essential policy to respond to the climate crisis and reduce urban fine dust." He urged, "If improving the subsidy policy is difficult, mid- to long-term measures should be established, including considering a shift to emission regulation policies."

This content was produced with the assistance of AI translation services.