‘EVs are great,’ but mechanics and gas stations are closing…and tax revenues are falling

Despite the achievement after 10 years of civilian supply, the crisis in the internal combustion engine-related industry is growing, such as the decline of auto repair companies. In addition, tax benefits for eco-friendly vehicles are expected to reduce local tax revenue in the long run.

This is a problem for Jeju Island, which is leading the way in the spread of electric vehicles.

According to the ‘Jeju Regional Vehicle Registration Status’ released by the Jeju Special Self-Governing Province on May 7, there were 35,020 electric vehicles registered in the province as of May. In the first five months of this year, 2044 electric vehicles were newly registered.

This is 8.5 percent of the 412,826 vehicles in the province.

The number of electric vehicles on Jeju Island was only 160 when it was first introduced in 2013, but it surpassed 10,000 in March 2018, 20,000 in August 2020, and 30,000 in October 2022.

A real fire drill is being conducted at the Hancheon 1 Reservoir in Jeju City to improve the ability of electric vehicles to extinguish fires. 2022.11.23/News1 ⓒ News1 Reporter Oh Hyun-ji

As the number of electric vehicle registrations in Jeju increases, industries related to internal combustion vehicles are shrinking.

The number of automobile repair shops decreased by 56 (10.3%) from 545 in 2014 to 489 in 2022, with one repair shop closing every 10 years.

While internal combustion vehicles consist of more than 30,000 parts, including more than 6,900 engines, electric vehicles have only 10,000 parts, one-third the number of internal combustion vehicles. Since electric vehicles do not have various oils such as engine oil and transmission oil, which are subject to light maintenance for internal combustion vehicles, or parts related to engines and transmissions, there is no demand for maintenance.

In addition, if something goes wrong with an electric vehicle, the manufacturer repairs it, not a general repair shop.

Since electric vehicles do not use gasoline or diesel fuel, gas stations are not immune to the impact.

As of 2022, there were 196 gas stations in Tokyo (including two closed). Eight gas stations have closed due to business difficulties since 2015, when the spread of electric vehicles began to take off. However, six have opened during the same period.

As for automotive LPG charging stations, one has been closed since 2015, leaving 38 in operation (including one closed).

Last year, the Korea Energy Research Institute estimated that the number of gas stations will decrease to 109 and the number of service stations will decrease to 64 if the number of electric vehicles in Jeju increases to 227,524 메이저사이트in 2025.

If the number of electric vehicles in the province increases to 377,217 in 2030, when the transition to electric vehicles is in full swing, it is expected that only 13 gas stations and 21 repair shops will remain.

In addition, tax benefits for eco-friendly vehicles are expected to reduce local tax revenue in the long run.

As of last year, the national individual consumption tax and education tax are reduced by up to 3 million won and 900,000 won, respectively, when purchasing an electric vehicle.

In addition, the local tax of taking and registration tax is also reduced by 1.4 million won (500,000 won for light vehicles), and the local development bond that must be purchased when registering a differential vehicle is also exempted.

Currently, if you want to purchase a vehicle with a displacement of 2000㏄ or more in Jeju this year, you must purchase a bond equal to 5% of the vehicle’s overvalued value.

In addition, the annual car tax is 100,000 won (20,000 won for business use) for electric vehicles, regardless of model and price. In addition, local education tax is charged at 30,000 won (exempt for business use).

On the other hand, internal combustion engines are subject to a car tax of 80 won per cubic meter under 1000 cubic meters, 140 won per cubic meter under 1600 cubic meters, and 200 won per cubic meter over 1600 cubic meters, depending on the displacement, for non-commercial use of passenger cars. In addition, a local education tax of 30 percent of the car tax will also be notified.

A Jeju Island official said, “We will prepare and promote a win-win cooperation plan to minimize damage to internal combustion vehicle-related industries due to the spread of electric vehicles.”

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