Hyundai Motor signed the MOU with South Korea’s Ministry of Trade, Industry and Energy as well as Hyundai Glovis, LG Energy Solution and KST Mobility for the rental of electric taxi batteries and the sustainable reuse of EV batteries in energy storage systems (ESS). All involved parties will explore a new innovative business model combining EV purchase with battery lease and battery reuse.
With the commercialization of battery rental service, Hyundai Motor expects that customers will be able to purchase EVs at lower cost because they will only pay for the vehicle excluding battery cost.
Role of different stakeholders in the business model
– Hyundai will oversee overall business operations while selling battery electric vehicles to KST Mobility (a taxi company). Hyundai is also responsible for providing battery warranty and replacement batteries for vehicles that return batteries after use.
– KST Mobility, the taxi operator, will sell the ownership of batteries in newly purchased EVs to Hyundai Glovis, the battery lessor. KST Mobility then pays a monthly fee for battery usage. As a result, KST Mobility is able to have lower initial investment for EV purchases.
– Hyundai Glovis will operate a battery rental service and recover batteries after initial usage. Recently, Hyundai Glovis acquired a patent for a container that can efficiently transport large quantities of used batteries.
– LG Energy Solution will analyze safety and residual value by purchasing batteries after use. It will also install these batteries into ESS units for fast-charging service and sell them to KST Mobility to utilize the chargers for its fleet of EV taxis.
To save cost, ESS is charged in the middle of the night when electricity rates are lowest and then charges EV taxis during daytime when electricity is comparatively expensive.
– The driving and battery data from these EVs are shared with all parties under the MOU. The shared EV battery data will also allow other new business opportunities to be explored.
– The Ministry of Trade, Industry and Energy plans to actively support the project in consultation with relevant ministries.
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