[THE INVESTOR] South Korea’s largest automotive maker Hyundai Motor may face a setback in China with its new plug-in hybrid cars as the issue surrounding battery certification remains unclear.

Samsung SDI and LG Chem, which supply car batteries to Hyundai and Kia Motors, have failed to win certifications in June and are yet to resubmit the applications.

If they fail to get their batteries certified in China, Hyundai Motor and its affiliate Kia Motors’ new plug-in hybrid cars may not receive subsidies up to $26,000, according to industry sources. 




The two automobile giants plan to roll out its Sonata PHEV in April and K5 PHEV in China -- both of them using LG Chem’s batteries.

The failure to get approval may deal a blow to Hyundai Motor’s plans to expand its eco-friendly car sales in the world’s largest electric car market. China recently vowed to raise the distribution of electrics vehicles to 5 million units by 2020.

“Even if the two battery makers win the certification, Hyundai may have to delay the launching dates if the Chinese government recognizes the batteries only made after the certifications,” said Choi Woong-chul, a professor of Kookmin University’s college of automotive engineering.

Hyundai said the subsidy issue in China is important to the company although it currently does not have plans to address it.

Industry watchers, however, said even if Hyundai does not get subsidies from the Chinese government, it may not significantly affect the company because the EV sales within the company is still very small.

”The battery issue may not strike a significant blow to Hyundai Motor, which appears to focus more on Europe and the US with its eco-friendly and premium brands than on China,” said Kim Kyung-yeon, an analyst from LG Economic Research Institute.

Hyundai Motor and Kia Motors have already rolled out their eco-friendly cars including Ioniq Hybrid and Kia Soul EV in Europe and the US while not launching any electric or hybrid cars in China yet.

“Internally, we do not expect much profits from the EVs in China because the portion is expected to be very small. Launching such cars in China is due mainly to manage the company’s brand and to catch with the market trend rather than gaining profits from the nation,” a source from Hyundai said.

By Shin Ji-hye/The Korea Herald (shinjh@heraldcorp.com)