Separate Registration of EV Vehicle and Battery Ownership Proposed…Laying the Groundwork for Leasing and Subscription-Based Businesses

[산업일보]
As the cumulative number of registered electric vehicles (EVs) in South Korea surpassed one million in April this year, marking the country’s transition into the mass-adoption phase, a proposal has emerged to allow vehicle bodies and batteries to be registered under separate ownership. The proposal aims to lay the foundation for new businesses utilizing batteries beyond their role as automotive components while reducing consumers’ financial burdens.

Attorney Kwon Sodam of BKL (Bae, Kim & Lee) emphasized the introduction of a system allowing separate registration of EV battery ownership at the seminar “Separating EV Battery Ownership: Opening New Mobility Markets,” held on September 22 in Conference Room 4 of the National Assembly Members’ Office Building. The event was hosted by National Assembly member Son Myung-soo and organized by the Korea Automobile & Mobility Association (KAMA).

Attorney Kwon stated, “As the adoption of electric vehicles continues to increase, the end-of-life battery market (waste battery recycling) is also projected to grow to $208.9 billion by 2040. In South Korea, more than 100,000 end-of-life batteries are expected to be generated around 2030.”

She added, “Unlike other vehicle components, batteries can continue to be utilized even after a vehicle reaches the end of its operational life. In addition to remanufacturing, reuse, and recycling, Battery as a Service (BaaS) models—including battery leasing, residual value assessment, and condition monitoring—are being considered and introduced.”

She also pointed out that separating battery ownership could improve consumer benefits. Consumers would be able to purchase only the vehicle body, excluding the battery, which accounts for a substantial portion of an EV’s price, significantly reducing the upfront cost of purchasing an electric vehicle. In addition, battery subscription services, real-time monitoring, and flexible battery transactions could be introduced, potentially stimulating related downstream industries.

Attorney Kwon said, “The vehicle ownership registration system under the Automobile Management Act should be regarded as a distinctive system unique to South Korea. Among major automotive markets such as the United States, the European Union (EU), and China, most do not have a system that publicly discloses vehicle ownership through external registration.”

Against this backdrop, Attorney Kwon introduced examples from major overseas markets. The EU has announced plans for a digital battery passport system to track and manage battery histories. Chinese company NIO operates 61 battery-swapping stations not only in China but also in Europe, providing battery leasing and swapping services.

In South Korea, Hyundai Motor Company is providing a B2B subscription service for remanufactured batteries targeting taxis through regulatory sandbox demonstrations. The company is also preparing a subscription model designed to reduce the initial purchase burden for general consumers. Under the model, the vehicle itself would be sold at a price comparable to that of an internal combustion engine vehicle, while the battery would be provided through a monthly subscription fee roughly equivalent to fuel expenses.

Attorney Kwon diagnosed the current regulatory limitations, stating, “Under the vehicle registration system established by the current Automobile Management Act, components are understood to be subordinate to the vehicle, making separate battery registration impossible. Because battery leasing operators lack legal safeguards to assert ownership rights against third parties, it is difficult to promote related businesses.”

She continued, “The amendment to the Automobile Management Act, introduced by Representative Son Myung-soo in July, establishes a legal basis for separately registering battery ownership. It also explicitly stipulates that vehicle manufacturers will continue to bear responsibility for after-sales management, even when ownership differs.”

Attorney Kwon concluded, “If this amendment is passed during the upcoming regular session of the National Assembly, the most fundamental institutional foundation could be established. Subsequent tasks should include establishing the legal basis for subsidies and taxation resulting from separate ownership, as well as improving related insurance systems.”