Gangnam Perspective: Will the “Half-Price EV” Model Succeed?

For an ordinary salaried worker, the biggest asset they own is a home. The next largest is a car. As home prices soared, the government’s answer was the land-lease apartment model. Under this system, the land remains public, while only the building is sold. It became known as the “half-price apartment.” A similar policy is now expected to be introduced to boost sales of electric vehicles, which also come with a high upfront price.
As part of its deregulation drive, the Ministry of Land, Infrastructure and Transport has decided to pilot an EV battery subscription service. Under the model, consumers buy only the vehicle body and lease the battery from a leasing company for a monthly fee. Since the battery accounts for about 40% of an EV’s total price, the model can effectively be called a “half-price EV.” The two models share the same basic structure: instead of full ownership, they offer partial ownership plus usage rights. Can an EV subscription model with a lower price barrier succeed?
The half-price apartment did not sell as well as expected. In Korea, the emotional resistance to real estate is strong, because many people feel uneasy about not owning the land itself. Ironically, the biggest psychological barrier to battery subscriptions is also price. Nio Inc. in China has established its Battery as a Service (BaaS) business model. Its dense nationwide network of battery-swapping stations is the key to its competitiveness. Instead of charging, drivers simply replace a depleted battery with a fully charged one. The business is expanding rapidly, but it is still too early to draw conclusions. Although the initial purchase price is lower, long-term owners may find that cumulative subscription fees exceed the cost of the battery itself.
The development of battery infrastructure and technology is another major variable. Renault once operated battery leasing services for EV models such as the Renault Zoe, but eventually returned to a battery-included purchase model. After real-world use showed that battery life was far longer than expected, consumers came to see little reason to rent one.
The expectation that subscription services will continue to expand also fuels consumer resistance. Cars are evolving into platform-based products. As vehicles move beyond hardware and become more software-centered, subscription models will likely become even more common. Automakers are moving away from the old one-time revenue structure of selling a car and walking away. Instead, they are preparing to build stable income streams through a range of subscription services. The battery is only the opening move in this shift. From the consumer’s perspective, buying a car may feel less like ownership and more like taking on an endless stream of bills.
Ultimately, the biggest barrier beyond price and technology lies in consumer psychology. The moment the battery, the core of an EV, feels like “someone else’s property,” it can create resistance to the car itself. This is known as psychological ownership. People feel a sense of ownership only when they can clearly control an object they want and identify with it. But once consumers become fixated on the fact that the battery belongs to a leasing company, they may feel they have lost control over the entire vehicle. To make them let go of that sense of ownership, companies must first offer a clear benefit that fills the gap.
Low-price marketing is a useful strategy for entering a market. But assuming that customers will automatically come just because the price barrier has been lowered is a mistake. Consumers are smarter now. The land-lease apartment is proof. The price was cut in half, but it also left the challenge of making up for the loss of full ownership with enough residential satisfaction.
The EV battery subscription service must go one step further. If, after a few years, the total subscription fees turn out to be more than the benefit received, it will only deepen consumer disappointment. Would buyers open their wallets easily if separating car ownership from battery ownership hurts resale value? Even after removing the price trap and filling the ownership gap, companies must still create a sense of value by making consumers feel, “This is how much I get for this price.” Only then can they truly persuade them.
jjack3@fnnews.com Reporter