Hyundai announces battery leasing accord to trim down EV prices, coordinate reuse

Hyundai announces battery leasing accord to trim down EV prices, coordinate reuse

South Korean automotive giant Hyundai Motor Company has confirmed that it is looking into battery leasing as a way to bring down the prices of its electric cars as well as to ensure reuse of batteries. The South Korean automaker announced that is has signed a memorandum of understanding (MoU) with the government of the country and partner companies to create an ecosystem around EV batteries to decrease costs and help protect the environment by reusing already used battery packs.

KST Mobility, one of the partner companies that signed the MoU, will lease batteries from Hyundai for a fleet of its electric taxis. For the battery leases, the company will pay a monthly fee, which will help the manufacturer in bringing down upfront costs for the purchase of its EVs. After extensive usage, the EV manufacturer will recover the batteries and utilize them in energy-storage system for fast charging of EV taxis.

While Hyundai’s press release neither discussed the scale of the battery leasing business nor verified that the scheme is related to EVs built on its upcoming E-GMP platform, the manufacturer noted that it recently acquired a patent for a container capable of efficiently transporting large quantities of used batteries.

Environmental and health risks associated with vehicle emissions are prompting governments around the globe to phase out production and use of internal combustion (ICE)-powered vehicles in favor of EVs. But, the growing piles of EV batteries are also posing a significant threat to the environment. Thus, leasing the batteries and reusing them will help a lot in tackling that issue.

LG Energy Solution has also announced plans to convert used batteries for energy storage. Last year, Hyundai announced a battery-leasing partnership with SK Innovation.

Battery leasing is not a new idea as the industry has been regularly asking for it for around a decade. It will not only help protect the environment from the potential hazards of used batteries but also help a lot in keeping upfront costs for purchase of EVs in check.

The idea has also caught on Chinese automaker NIO, which aims to make battery leasing a key part of its business. A few months back, NIO announced a new business model with monthly battery lease fees, and discounts on EV purchase prices for customers who opt to lease the battery rather than purchase it outright.