Hyundai Motor Group to launch battery subscription service next year

A memorandum of understanding (MOU) ceremony among Kia Corp., Shinhan EZ General Insurance Ltd., and the Seoul Taxi Association for the battery subscription service at the headquarters of Hyundai Capital Services Inc. in Seoul on July 3. [Photo provided by Kia]

South Korea’s auto giant Hyundai Motor Group will start selling vehicles without batteries, which account for 30 to 40 percent of the price of an electric vehicle (EV), helping consumers to purchase a new EV for less than half of the current price with subsidies.

Kia Corp. announced Monday that it signed a memorandum of understanding (MOU) with Shinhan EZ General Insurance Ltd. and the Seoul Taxi Association at the headquarters of Hyundai Capital Services Inc. in Seoul to verify and demonstrate the battery subscription service.

Battery subscription is a service that allows customers to pay only the price of the vehicle, excluding the battery, at the time of initial purchase and pay a monthly subscription fee for the battery. Battery subscription not only saves the cost of purchasing an EV, but also reduces vehicle maintenance costs by paying only for the value of the battery during the subscription period.

In addition, battery-only insurance can be purchased, including commercial vehicles such as taxis that are currently not eligible for insurance policies that cover financial losses involving one’s own car in the event of an accident.

Kia plans to launch the full service in the second half of next year after about a year of demonstration.

“The battery subscription service is a product specialized for commercial vehicles such as taxis,” said a Kia official. “When the service starts next year, it will be installed first on the Niro Plus, a model dedicated to taxis.”

The automotive industry sees that although Hyundai Motor Group will launch the battery subscription service for commercial vehicles next year, it will expand the service to general consumers as soon as the relevant infrastructure, such as battery maintenance companies, is in place.

The battery subscription service was made possible in August last year when the Ministry of Land, Infrastructure and Transport prepared a plan to improve regulations in the area.

Once the battery subscription service is in full swing, the biggest advantage for the average consumer is the initial cost savings. The EV9, a semi-large sports utility vehicle (SUV) recently released by Kia, is priced at 76.85 million won ($59,252). If you subtract the subsidy of 4.03 million won and the battery price of about 28 million won, the final purchase price of the EV9 drops to 44.82 million won.

Niro EV can be purchased for 17.95 million won, less than 40 percent of the original price, after subtracting 8.6 million won in subsidies and about 21 million won in battery costs from the current price of 47.55 million won.