[Insight & Opinion] Separate Registration of EV Battery Ownership: An Urgent Task That Can No Longer Be Delayed

"Battery Subscription" to Reduce EV Costs
Urgent Need for Institutional Innovation to Clarify Ownership and Responsibility

Park Taesung, Executive Vice President of the Korea Battery Industry Association

The government is intensifying its policy efforts to raise the national greenhouse gas reduction target (NDC) and expand the adoption of electric vehicles, aiming to accelerate the transition to a carbon-neutral society. However, many in the field assess that the spread of electric vehicles is not meeting expectations.

The primary reason is still the high initial purchase price. With increasing fiscal burdens, it is difficult for the government to endlessly expand electric vehicle subsidies. Now is the time to move away from subsidy-centered policies and seek structural solutions through institutional innovation.

One alternative that is drawing attention is the electric vehicle battery subscription service, with its starting point being the legal separation of battery ownership registration. This means that while consumers own the vehicle, the battery is separately owned and managed by the manufacturer or a specialized business entity, or provided in a subscription or rental format, with this structure legally recognized. It represents a fundamental shift from the traditional automotive management system, which has bundled the battery as an inseparable part of the vehicle.

This transition is necessary because the economic characteristics of batteries are fundamentally different from those of conventional internal combustion engine components. Batteries are high-value assets, accounting for about 40% of a vehicle's manufacturing cost. Even after the vehicle's lifespan ends, they retain 70-80% of their original performance. After use, they can be repurposed for energy storage systems (ESS) or reused and recycled in various industries. They are independent economic goods from which key minerals such as lithium and nickel can be recovered.

Nevertheless, the current automotive management system still treats batteries as components subordinate to the vehicle, like engines or transmissions. Although a battery identification number registration system is in place, it is only for safety history management and does not provide for the legal separation of ownership. These outdated regulations are hindering the emergence of financial products, subscription services, and data-driven innovative businesses based on batteries.

International cases provide clear insights. In particular, China has institutionalized battery-swapping electric vehicles by recognizing batteries not as "vehicle components" but as "assets subject to management."

Furthermore, China officially operates a variety of battery services (BaaS) within its policy framework, including battery subscriptions, condition diagnostics, and data-driven management. By proactively establishing systems for insurance coverage, residual value assessment, and battery tracking and management, China has fostered a robust battery service ecosystem and market. This clearly demonstrates that the separation of battery ownership is not a technological issue, but a matter of policy choice.

In contrast, in Korea, the Automotive Management Act, circular economy policies, and insurance and financial systems operate in a fragmented manner. Attempting to separate battery ownership simultaneously raises issues across multiple ministries, such as accident liability, performance degradation management, restructuring of automotive finance, and adjustments to electric vehicle subsidies. Due to the lack of a control tower and a clear roadmap, institutional reform has been slow despite widespread recognition of its necessity.

Now, decisive action is needed for innovative growth and the transition to a circular economy. Through amendments to the Automotive Management Act, a legal basis should be established for the separate registration, transfer, and collateralization of battery ownership, with clear delineation of responsibilities.

In parallel, financial and insurance products specialized for BaaS must be designed, and a history management system for the rational sharing of battery life, safety (SOH), and driving data should be established. Furthermore, promoting the use of electric vehicle battery assets for distributed power generation and the activation of V2G (Vehicle-to-Grid) integration is also a crucial task.

The separation of electric vehicle battery ownership is no longer an experimental idea. It is an urgent policy issue, with automakers such as Hyundai Motor Company, battery manufacturers, and startups all unanimously calling for its introduction. If the government and National Assembly accelerate institutional innovation, Korea's world-class battery manufacturing competitiveness will expand into the realms of finance, energy, and mobility services.