ANN/THE KOREA HERALD – South Korea’s Ministry of Environment announced a reduction in the maximum subsidy for electric vehicles (EVs) to KRW5.8 million (USD3,950) this year, marking a decrease of over 10 per cent from last year.
Under the updated subsidy plan, support for midsized and large EVs will drop from KRW6.5 million to KRW5.8 million, while subsidies for small EVs will decrease by KRW200,000 to KRW5.3 million. The price cap for vehicles eligible for full subsidies has been reduced from KRW55 million to KRW53 million.
The programme aims to encourage manufacturers to lower production costs and offer discounts, easing the financial burden on consumers.
To support this, the ministry will cover up to 40 per cent of promotional discounts provided by manufacturers as an added incentive. The authority will also strengthen support for younger buyers aged between 19 and 34 purchasing their first EVs and families with multiple children.
The ministry has tightened safety standards for subsidies to address public concerns about EV safety following a fire in August last year that engulfed the underground parking area of an Incheon apartment complex and burned over 80 vehicles, after igniting from an EV.
EVs that do not provide battery state-of-charge information to charging stations will no longer qualify for subsidies, as overcharging was suspected to have contributed to the EV fire.
Manufacturers without product liability insurance also will be excluded from the programme as announced as part of the government’s plan to improve battery safety in response to the incident.
A detailed plan setting forth the subsidy amounts for each EV model is to be announced later in January.
By the end of the month, EV consumers are expected to begin receiving support as the government accelerates efforts to tackle declining market demand amid the unstable economy worsened by political turmoil.
“This year’s subsidy revision could be released a month earlier than last year, as discussions started in advance to address EV-makers’ requests to shorten the period that the subsidies are not given,” said an official. “We will take swift action to boost EV sales and improve the market by supporting vehicles with better quality and safety, while also supporting consumers.”
