The Chinese government has allowed subsidies for electric vehicles equipped with South Korean batteries, lowering the threshold for foreign battery makers.

According to the Korean Embassy in Beijing on Friday, Tesla’s China-made Model 3 EV sedan and Chongqing Jinkang’s pure electric SUV -- equipped with LG Chem and Samsung SDI batteries -- have been included on a whitelist for new energy vehicle subsidies announced March 6 by the Ministry of Industry and Information Technology of China.

Electric vehicles made in China and equipped with Korean batteries had been left out by the Chinese government since 2016, due to a diplomatic dispute over the US deployment of an anti-missile system here. Since then, Chinese battery makers -- including CATL and BYD -- saw rapid growth.

Electric vehicles with Korean batteries entered the subsidy list for the first time in December, including the Tesla Model 3 and Mercedes-Benz E-Class plug-in hybrid EV, powered by batteries of LG Chem and SK Innovation, respectively, making a total of four such models with Korean batteries on the whitelist.

According to industry sources, SK innovation and Panasonic have been receiving subsidies from automaker clients while Samsung SDI will be receiving them starting this year. Whether LG Chem received or will receive subsidies from Tesla is unknown.

“Though LG Chem can’t disclose whether it received subsidies from Tesla, vehicles in the whitelist will receive subsidies as they have met government requirements,” the company official said.

Currently, Chinese electric vehicles buyers can receive subsidies of up to 25,000 yuan ($3,500), down from 50,000 yuan for vehicles with a range of more than 400 kilometers in June last year.

However, despite China’s initial plan to completely phase out electric vehicle subsidies this year, MIIT chief Miao Wei said in January that a significant cut is unlikely.

The Chinese government is expected to eliminate the subsidy program in 2021.

By Kim Byung-wook (kbw@heraldcorp.com)