"Discussions Underway to Raise Next Year's EV Purchase Subsidy from 3 Million to 4 Million Won"

Average Subsidy for Electric Passenger Vehicles May Rise to 4 Million Won Next Year
Minister Kim Sung Hwan: "Discussions Underway with Relevant Ministries"

There is a possibility that next year's subsidy for purchasing electric passenger vehicles will be raised to an average of 4 million won, including the 'internal combustion vehicle transition support fund'.

On August 20, at the full session of the National Assembly's Environment and Labor Committee, Minister of Environment Kim Sung Hwan responded to a question from Park Jung, a member of the Democratic Party of Korea, regarding the need to expand subsidies for electric vehicles. He stated, "For next year, we are in discussions with relevant ministries so that the combined amount of the purchase subsidy for electric vehicles and the internal combustion vehicle transition support fund will be around 4 million won."

The internal combustion vehicle transition support fund is an additional subsidy provided when replacing an existing internal combustion engine vehicle with an electric vehicle. Although the government has maintained a policy of gradually reducing the unit subsidy amount, calls to expand subsidies have been gaining traction as the adoption of electric vehicles has been slower than expected.

The government has gradually reduced subsidies to enhance the price competitiveness of electric vehicles. For passenger cars, the subsidy was 7 million won in 2021, 6 million won in 2022, 5 million won in 2023, and 3 million won in 2024, with this year's subsidy also set at 3 million won. However, as the adoption rate has not met targets and demand has weakened due to concerns such as fire risks, the need to revise the policy has been raised.

Minister of Environment Sung-Hwan Kim Reporting the 2024 Settlement (Seoul=Yonhap News) Photo by Hwang Kwangmo = Minister of Environment Sung-Hwan Kim is attending the full session of the Environment and Labor Committee held at the National Assembly on the 20th to report the 2024 settlement. 2025.8.20 hkmpooh@yna.co.kr (End)

According to the Ministry of Environment, the number of newly supplied electric and hydrogen vehicles last year was 151,000, a decrease from 168,000 the previous year. In particular, as demand for electric vehicles has reportedly fallen into a 'chasm' (a period of stagnant demand), there have been continued calls to increase subsidies again.

At the meeting, Minister Kim officially confirmed that the government has postponed the deadline for submitting the '2035 National Greenhouse Gas Reduction Target (NDC)' to the United Nations to early November. Minister Kim stated, "We aim to prepare a draft by September, conduct a public discussion by the end of October, and submit it in early November."

Originally, the government planned to submit it in September in accordance with United Nations recommendations. However, due to the declaration of martial law and a change of administration, discussions have been delayed, making it inevitable to postpone the deadline.