South Korean automotive giant Hyundai is to create an electric vehicle (EV) battery leasing business with the aim of reducing the initial cost of buying an EV as well as providing services that enable eco-friendly re-use of the batteries beyond their useful EV lifespan.

Hyundai said it had signed a Memorandum of Understanding (MoU) with the South Korean Government, as well as LG Energy Solution and KST Mobility to demonstrate an EV battery leasing business, including for the rental of electric taxi batteries.

Under the plan KST Mobility will sell ownership of batteries in newly purchased EVs to Hyundai Glovis, the battery lessor. KST Mobility will then pay a monthly fee for battery usage, which will in turn ensure KST Mobility is able to reduce its initial investment on EV purchases.

The plan calls for batteries to be swapped out after extensive usage and reused in energy storage systems for the fast-charging of EV taxis.

LG’s role is to analyse the safety and residual value by purchasing batteries after use, before installing them into energy storage systems, and then selling them back to KST Mobility to utilise for charging their fleet of EV taxis.

The hopes for this new EV battery leasing venture is that customers will be able to purchase BEVs at lower cost, having only to pay for the vehicle excluding battery cost, which Hyundai Motor expects will lead to faster EV adoption.