Renault Samsung on Monday began producing a new electric vehicle, the SM3 Z.E., at its plant in Busan, the automaker said.
The vehicle is equipped with a lithium-ion battery and motor after ditching a gasoline engine from the existing SM3 sedan. It can run for 135 km on a single charge.
"Z.E." stands for zero emission.
Renault Samsung is the second local carmaker to manufacture an electric vehicle after Kia, which introduced the Ray EV last year.
It hopes to lead the domestic electric car market by producing 1,000 units of the new model this year and 4,000 next year. Parent company Renault is making a European version, the Fluence, at its plant in Turkey.
Although priced at W45 million (US$1=W1,072), consumers can buy the car for as little as W19 million as they can get tax benefits worth about W2.75 million as well as government subsides. The Ministry of Environment is offering a subsidy of W15 million and local governments in Jeju and Changwon of W8 million and W6 million to buyers of electric cars. They are also exempt from taxes for vehicle registration.
The same conditions apply to GM's Spark EV and the Kia Ray EV.
Hyundai and Kia are somewhat behind the competition in the electric car market. Kia produced 630 units of the Ray EV last year but only 90 units this year. Although the carmaker plans to release electric versions of the Soul and a compact EV sedan late next year, it has not decided production volume.