EV-phobia sweeps over South Korea after a high-profile fire

The electric vehicle industry is facing what local media is describing as “EV-phobia” in South Korea after a high-profile fire of a Mercedes-Benz Group AG (OTCPK:MBGAF) EV. The Mercedes-Benz (OTCPK:MBGAF) vehicles caught fire in an underground parking lot of an apartment complex in Incheon. The blaze went viral after it severely damaged more than 100 vehicles in the parking garage, and a few residents sustained minor injuries from the fire.

Mercedes-Benz (OTCPK:MBGAF) announced that it would provide compensation of 4.5 billion won ($3.4 million). “We are keen and eager to support wherever it is necessary and to help people here affected by the incident,” stated a top executive. The German automaker is also reportedly considering halting sales of the model that caught fire. However, Mercedes-Benz (OTCPK:MBGAF) has been criticized for its response, and there have been some reports of panic selling of EVs in general following the public outcry.

In response to the EV flareup, the South Korean Environment Ministry called an emergency meeting to discuss electric vehicle fire safety. The South Korean government is considering a new requirement that automakers must disclose their EV battery brands. Hyundai (OTCPK:HYMTF) and Kia have already released a list of EV battery brands they use to the public. Other automakers have offered free inspections of electric vehicles, while others, such as Audi and BMW Korea (OTCPK:BMWYY), have clipped prices on certain EV models.

The batteries from the Mercedes-Benz (OTCPK:MBGAF) fire in South Korea are believed to be sourced from Farasis Energy, which is an advanced lithium-ion battery technology company based out of China.

The largest EV sellers in South Korea by volume are Hyundai Motor Company (OTCPK:HYMTF), Kia (OTCPK:HYMTF), BMW (OTCPK:BMWYY), Mercedes-Benz Group (OTCPK:MBGAF), and Tesla (NASDAQ:TSLA).