Regulatory Mismatches Lead to Mass Closures... Micro Electric Vehicle Market Halved

Five Manufacturers Remain as Annual Sales Plummet to 319 Units
Small Business Ombudsman to Recommend Regulatory Reforms to the Ministry of Land and Transport

The micro electric vehicle sector, once considered a beneficiary of the domestic electric vehicle market's growth, has come to a standstill due to regulatory barriers. While safety standards have been strengthened, weight restrictions remain unchanged, increasing cost burdens for manufacturers and sellers. Industry experts argue that a comprehensive overhaul of the regulatory system is necessary, including the need to update the weight standards to reflect current realities.

Image of a micro electric vehicle. Photo by The Asia Business Daily DB

As of 2024, there are five companies manufacturing and selling micro electric vehicles in Korea, according to industry sources. The sector began with three companies in 2016 and peaked at eleven, but many have since left the market due to rehabilitation proceedings or closures.

Sales volumes have also plummeted. After exceeding 2,100 units in 2022, sales dropped sharply to 319 units in 2023. This contraction has been attributed to the simultaneous tightening of safety standards and the introduction of restrictions on driving on expressways during the same period.

The industry points to "weight regulation" as the core issue. Under the current Automobile Management Act, micro electric vehicles are classified as automobiles and are subject to the following weight limits: 600 kg or less for passenger vehicles, 750 kg or less for cargo vehicles, and 1,100 kg for special-purpose vehicles. These vehicles must also comply with safety standards on par with those for regular automobiles, such as crash safety, anti-lock braking systems (ABS), and airbags. The need to meet these high safety specifications while staying within strict weight limits imposes unavoidable design constraints.

Technological development is also progressing slowly. Because the total weight calculation includes the battery, it is difficult to increase battery capacity, which is a key factor in determining driving range.

Currently, micro electric vehicles are equipped with batteries in the 10–15 kWh range, requiring recharging after one or two trips at speeds of 50–60 kilometers per hour. Since adding more batteries or offering long-distance options is virtually impossible, it is difficult for manufacturers to secure product competitiveness.

Industry representatives insist that, at a minimum, domestic weight standards should be adjusted in line with upgraded safety requirements. A realistic alternative being considered is raising the weight limits for micro passenger, cargo, and special-purpose vehicles by 100 kg each compared to current standards.

In Europe, for example, the maximum allowable weight for micro cargo and special-purpose vehicles is up to 1,840 kg, and the weight calculation excludes some components such as batteries, allowing room for technological development. In contrast, Korea applies automobile-level safety standards while maintaining strict weight restrictions, which is said to undermine industrial competitiveness.

The Small and Medium Business Ombudsman plans to formally recommend improvements to the Ministry of Land, Infrastructure and Transport after gathering industry feedback. The ombudsman will convey the industry's position that easing weight regulations is necessary to foster module development and improve product quality, and will continue discussions to drive positive changes.

Choi Seungjae, the ombudsman, stated, "I have heard many stories about the difficulties the electric vehicle industry faces due to various regulations," adding, "We will work to review and improve all regulations, including weight restrictions, that hinder competitiveness in the electric vehicle industry."

This content was produced with the assistance of AI translation services.