Hyundai Motor's IONIQ 5 flagship electric vehicle / Courtesy of Hyundai Motor

Hyundai Motor Group’s battery subscription model for electric vehicles (EVs) is expected to significantly lower upfront costs and accelerate broader EV adoption across the nation, once the carmaker proves the project's economic feasibility, industry officials said Wednesday.

The automaker plans to launch the demonstration project in the first half of this year, targeting corporate taxi fleets whose vehicle warranties have expired. Once it proves successful, the firm will then expand the range of the service to individual EV customers.

The program centers on separating EV battery ownership from the vehicle. For example, the price of Kia’s EV6 for corporate taxi use dropped to 18.6 million won ($12,700) last year when the battery cost was excluded. Customers instead pay about 1.4 million won per month as a battery subscription fee, which the carmaker says is lower than the typical monthly cost of LPG fuel.

Hyundai Motor Group will operate the pilot service with five IONIQ 5 taxis driving in the Seoul metropolitan area. The carmaker will focus on assessing the economic feasibility of the subscription model under the real-world environment.

The initiative will be jointly operated by Hyundai Motor and Hyundai Capital. Drivers or fleet operators will own the vehicle itself, while Hyundai Capital retains ownership of the battery.

Kia's EV9 large electric SUV / Courtesy of Kia

Industry officials said the key upside of the program is to reduce risks of battery degradation from the viewpoint of customers.

By shifting concerns over battery residual value from consumers to financial institutions, the model helps minimize uncertainty for buyers. In conventional EV ownership, declining battery performance directly impacts vehicle value, and replacement costs fall on the owner.

“The battery subscription model sounds unfamiliar to most Korean customers, but the program will be widely adopted once it proves to be more economical than expected,” an auto industry official said.

Source: Korea Times News