The government will increase the subsidy for purchasing electric passenger cars by 1 million KRW until the end of this year, providing support up to a maximum of 7.8 million KRW.
On the 25th, the Ministry of Environment announced this plan to expand subsidies for electric passenger car purchases to promote the distribution of electric passenger cars and revitalize domestic demand.
Specifically, the national subsidy will be applied differentially in proportion to the vehicle discount amount offered by the car manufacturer. This applies only to electric passenger cars with a base price under 57 million KRW, and the national subsidy available for these vehicles will increase from a maximum of 6.8 million KRW to up to 7.8 million KRW depending on the manufacturer’s vehicle price discount.
For example, if an electric passenger car manufacturer uniformly discounts the vehicle price by 3 million KRW for a model originally eligible for a 6.8 million KRW national subsidy, an additional 600,000 KRW subsidy will be granted, resulting in a total national subsidy benefit of 7.4 million KRW.
The Ministry of Environment stated, "Although the total number of electric vehicles distributed this year has increased compared to the same period last year, the distribution of electric passenger cars, which account for the largest share of electric vehicles, is stagnating," and added, "We have prepared a plan to expand purchase subsidies to promote the distribution of electric passenger cars."
According to the Ministry of Environment, the number of electric passenger cars distributed decreased by 5.7%, from 71,744 units in January to August last year to 67,654 units during the same period this year.
On the 9th, Hyundai's electric vehicle Ioniq 5 was exhibited at 'InterBattery and 2021 xEV Trend Korea' held at COEX in Gangnam-gu, Seoul. Photo by Jinhyung Kang aymsdream@
This expanded subsidy plan for electric vehicle purchases will be reflected in the ‘2023 Electric Vehicle Distribution Project Subsidy Processing Guidelines’ effective from today and will be applied until December 31 of this year. After reviewing the price reduction documentation submitted by participating electric passenger car manufacturers by model, the national subsidy for the respective models will be recalculated and supported.
The Ministry of Environment also plans to increase the number of vehicles eligible for purchase support for corporations and individual business owners. Previously, individual business owners were limited to one electric passenger car purchase support within two years (re-support restriction period), and corporations that received local government subsidies and have not passed two years (re-support restriction period) could not receive multiple subsidies at once. Now, multiple electric vehicle purchase subsidies can be received simultaneously. Additionally, electric vehicles used for testing and research purposes, which were previously not eligible for purchase subsidies, can now receive subsidies through local government subsidy programs.
The Ministry of Environment will form a ‘Special Task Force for Promoting Electric Vehicle Distribution’ including the Korea Environment Corporation, the National Institute of Environmental Research, and related associations to analyze market trends and the effects of expanded support measures, and to reflect these findings in future electric vehicle distribution policy directions.
Han Hwa-jin, Minister of Environment, said, "It is time for the government to play a catalyst role in securing the competitiveness of the domestic electric vehicle industry in response to the stagnation in electric vehicle demand," and added, "We will steadily implement the plan to expand purchase subsidies to maximize the distribution of electric passenger cars."
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