Business lobby calls for splitting EV battery ownership from vehicles

South Korea's major business lobby on Wednesday proposed allowing electric vehicle batteries to be owned separately from vehicles to lower the upfront cost burden on customers.

The proposal is part of the Federation of Korean Industries' 100 regulatory reform recommendations submitted to the Office for Government Policy Coordination, based on input from its member companies.

By ministry, the proposals are distributed as follows: 26 to the Land Ministry; 13 to the Trade Ministry; 11 to the Environment Ministry; nine to the Financial Services Commission; six to the Labor Ministry; and five to the Finance Ministry.

Among the key recommendations is the introduction of a legal framework to separate EV battery ownership from the vehicles themselves. In Korea, EV batteries are currently treated as part of the vehicle and are effectively controlled by the automakers, even though battery suppliers manufacture them.

FKI argues that recognizing batteries as independent assets would allow consumers to purchase EVs at lower costs by excluding the battery price, while enabling rapid battery swapping through dedicated stations.

Such models — where independent operators own and manage batteries and users pay subscription or rental fees — have already gained traction in countries such as China and India.

An industry source noted that while a Battery-as-a-Service model could benefit consumers, it would face significant hurdles as it shifts the balance of power from automakers to battery manufacturers.

“With automakers pushing to internalize battery development — which accounts for up to 40 percent of an EV’s cost — handing over ownership to battery cell makers would mean giving up control over one of the most strategic vehicle components,” the source said.