Ministry of Environment: "National Subsidies for Electric Vehicles Released This Year, Including Ioniq 5, Already Secured"

Due to Increasing Demand for Electric Vehicles, 'Second Half Subsidies' to Be Executed Early

'Ioniq 5' (Reference photo)

[Sejong=Asia Economy Reporter Joo Sang-don] The Ministry of Environment announced on the 13th that it has already secured national subsidies for electric vehicles newly released this year. This is to alleviate concerns that those who pre-ordered the Ioniq 5 might not receive subsidies.

An official from the Ministry of Environment explained, "We have secured the national subsidy budget to achieve the 2021 electric vehicle supply target of 121,000 units, including 75,000 electric passenger cars," adding, "We have also secured subsidies for new models to be released this year and are currently consulting with local governments to secure additional local funds."

Depending on the nature of local government subsidy projects, the Ministry of Environment allocates national funds to local governments monthly. According to the Ministry, local governments such as Busan and Seoul plan to secure additional local funds through supplementary budgets sequentially and announce additional subsidy-eligible units.

Currently, the application rate (subsidy applications) is 21% and the delivery rate (subsidy payments) is 12% compared to the total announced units of electric passenger cars. By region, Busan and Seoul have relatively high application rates of 60.1% and 49.2%, respectively, while Incheon (8.1%) and Daejeon (11.2%) have low rates. Among cities excluding special and metropolitan cities, Yongin, which announced the largest volume, has an application rate of 18.2%, lower than the national average.

In response to the increasing demand for electric vehicles, the Ministry of Environment plans to re-survey demand by vehicle type for local governments starting this week and advance the subsidy execution schedule originally planned for the second half of the year. Based on the survey results, the Ministry will flexibly execute subsidies by adjusting volumes among passenger cars, cargo trucks, and vans, and reallocating national funds among local governments.

Kim Hyo-jung, Director of the Future Air Strategy Division at the Ministry of Environment, said, "We are continuously monitoring the status of local fund procurement and are closely consulting with local governments to secure additional local funds," adding, "The Ministry of Environment will prioritize appropriate subsidy allocation tailored to the actual demand for electric vehicles and will explore and implement various measures."