Tax breaks for LPG hybrid

The South Korean government will offer buyers of the new Hyundai Elantra LPI Hybrid rebates worth up to three million won per car -- roughly AUD $3000.

"In Korea, customers will receive a maximum benefit of 3.1 million won in tax breaks when they buy this car," says Ben Hershman, Hyundai Australia's Senior Manager Product Communications and Public Relations.

Hyundai plans to launch the Elantra hybrid, which is currently being evaluated for Australia too (more here), in South Korea on Wednesday July 8.

The existence of the Elantra LPI Hybrid prompts the question, how would Hyundai cope with marketing two alternative-fuel/drivetrain choices in the model range?

Where Toyota is solely committed to hybrids and Volkswagen is only marketing diesels in Australia, will Hyundai steer towards a future in which it offers both alternatives -- and other fuel systems to follow down the track? That would be a distinctly different path for the Korean company.

Would Hyundai's consumers be confused in the showrooms by the two alternative fuels? Hershman insinuates it's too early to tell -- particularly with the Elantra not signed off for Australia.

"We have driven the [Elantra LPI Hybrid], but we are very much in the feasibility study stage and in discussions with HMC [Hyundai Motor Company]," he says.

"It's just too early to confirm that the car will be sold in Australia, but my response is that that wraps into the feasibility study that we'll undertake. Certainly, we're right behind the CRDi [diesel] engine in Australia -- that's proving successful for us. "

On the subject of the rebate, South Korea -- like Australia -- has well developed LPG resupply infrastructure. The rebate is not an incentive to fuel your vehicle with LPG, it's rather an incentive to buy a hybrid-drive vehicle and is apparently available to petrol/electric hybrids as well as the LPG/hybrids from Hyundai and Kia.

"I don't have any [South Korean] pricing information," says Hershman, when asked what proportion of the car's new price would be offset by the Korean subsidies. Needless to say though, the Korean equivalent of $3000 would be a substantial sum of money encouraging buyers to purchase the hybrid Elantra.

Such a rebate in Australia could just about reduce the cost of the hybrid-drive vehicle to the same level as a petrol equivalent, if Hyundai were to price the hybrid at a premium level on par with the company's diesel i30, for example.

That's still very much up in the air of course, with the Elantra hybrid yet to be confirmed for Australian consumption. Even if it should be confirmed, there's by no means any guarantee that the hybrid Hyundai would be as relatively cost-effective to buy as the diesel i30. But the Honda Civic Hybrid provides a precedent of sorts.

The rebates reported by Hyundai also benefit its stablemate Kia (more here) and, in a way, throws money at the environmental fall-out associated with car ownership at the opposite end of the timeline from scrappage schemes (more here).

Despite the Australian government's commitment to its Green Car Innovation Fund (more here) and lip service to carbon emissions trading, there are no apparent plans for the feds to follow the South Korean model. There is, at least, the LPG rebate to motivate buyers of the LPI Korean cars in Australia -- for as long as that lasts.

The GCIF was established for the purpose of R&D efforts in Australia and cannot be channelled elsewhere, so importers offering hybrid-drive and electric vehicles in Australia are not supported by the government -- and consumers of such cars are currently early-adopting techno-savvy buyers, rather than typical mainstream car buyers.

Until either economies of scale can reduce the prices of these cars or the government finds the cash to motivate buyers, the migration to more fuel-efficient cars will be a long time coming.

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