China Accelerates Growth in Medium and Heavy Electric Truck Market

China is rapidly developing its medium and heavy electric truck market. Following the near cessation of subsidies for passenger vehicles, the government is expanding support in the commercial vehicle sector as a new growth driver. Analysts suggest that South Korea's medium electric truck market remains in its infancy, widening the gap between the two countries.

According to industry sources, the Chinese government has implemented a policy since last month that provides up to 140,000 yuan (approximately $20,000) in subsidies for replacing old trucks with electric models. This support covers more than half the cost of the vehicles, encouraging the transition to eco-friendly commercial vehicles.

Considering that BYD's 4.5-ton medium electric truck T5 starts at 185,800 yuan, the maximum subsidy amounts to about 75% of the vehicle's price.

China ended its electric passenger vehicle purchase subsidies in 2023 and has halved tax reduction benefits this year. In contrast, the government is strengthening support for commercial vehicles, shifting its policy focus.

On June 12, a ceremony was held at BYD's headquarters in Ping Shan District, Shenzhen, to deliver 100 units of 3-ton electric trucks to transport workers. [Photo by Oh Joo-seok]

The market is responding quickly. Medium electric trucks are becoming increasingly visible on Chinese roads. On June 12, a ceremony took place at BYD's headquarters in Shenzhen, where 100 units of 3-ton electric trucks were delivered to transport workers.

According to the International Council on Clean Transportation (ICCT), battery electric vehicles accounted for 17% of the medium truck market in China during the first half of last year, ranking second after diesel vehicles (76%). Notably, the share of zero-emission vehicles in the logistics and delivery utility vehicle sector has expanded to 25%, driving the electrification of commercial vehicles.

In contrast, South Korea's medium electric truck market remains in its early stages. The government has introduced subsidies for medium electric trucks for the first time this year, offering up to 40 million won (approximately $30,000) for 1.5 to 5-ton electric trucks and up to 60 million won (approximately $45,000) for vehicles over 5 tons. However, high vehicle prices and differences in manufacturers' cost structures are hindering market expansion.

Industry experts believe that electrifying medium and heavy commercial vehicles is essential for reducing logistics costs and achieving carbon neutrality. According to a report released by the Korea Automotive Research Institute this month, logistics costs account for 11.5% of South Korea's GDP, the second highest after China (14.2%). As of 2023, 92.7% of domestic freight transport is conducted via road.

* This article has been translated by AI.