1 Million Won Subsidy for Switching to Electric Vehicles... 2.3 Trillion Won Invested in Zero-Emission Vehicle Supply [Lee Administration's First Budget]

Electric Vehicle Transition Support Fund and Creation of Zero-Emission Vehicle Infrastructure Fund
3.2 Trillion Won Invested to Boost Tourism and Beauty Sectors

The government will include in next year's budget a program that provides up to 1 million won in transition support to those who scrap or sell their internal combustion engine vehicles and switch to electric vehicles, as part of efforts to expand the supply of zero-emission vehicles. In addition, 4.2 trillion won will be allocated to establish RE100 (100% renewable energy) industrial complexes and next-generation power grids. To boost K-tourism and beauty industries, the government will spend 3.2 trillion won, introducing initiatives such as the K-Tourism Transportation Pass.

Export vehicles parked at Pyeongtaek Port in Gyeonggi Province. Unrelated to the article content. Photo by Yonhap News.

Electric Vehicle Transition Support Fund and Zero-Emission Vehicle Infrastructure Fund

On August 29, the government held a Cabinet meeting at the presidential office in Yongsan to review and approve the '2026 Budget Bill.' The government announced a total expenditure of 728 trillion won for next year, an 8.1% increase from this year, with 7.9 trillion won allocated to accelerating energy transition and carbon neutrality. This is an increase of 1.9 trillion won compared to this year's related budget of 6 trillion won.

To achieve carbon neutrality, the government will introduce a new electric vehicle transition support fund next year. This fund will provide up to 1 million won to those who scrap or sell their internal combustion engine vehicles and switch to electric vehicles. The government also plans to establish a 100 billion won zero-emission vehicle infrastructure fund to promote the adoption of zero-emission vehicles. The total budget for the electric vehicle transition support fund and new purchase loans amounts to 2.2825 trillion won.

In the process of energy transition, the government will support the installation costs of energy storage systems (ESS) to strengthen the stability of power systems in saturated areas and build artificial intelligence (AI)-based distributed power grids. The budget for this initiative is 100 billion won. Additionally, 25 billion won will be used for the proactive construction of power grids necessary for establishing RE100 industrial complexes. To foster the next-generation power grid industry through microgrid demonstrations, 70.2 billion won will be invested.

3.2 Trillion Won to Boost Tourism, Beauty, and Related Industries

The government will allocate 5.7 trillion won next year to establish South Korea as one of the top five global cultural powerhouses. Of this, 1.8 trillion won will be used to expand and strengthen the export of K-culture. The government will support the expansion of content industry exports through policy finance, specialized support by genre, talent development, and AI-powered production.

A support program for young creators, including composers, playwrights, and visual artists, will provide 9 million won annually to 3,000 young artists for creative activities. In addition, a 5 billion won welfare fund for artists will be established. To build a global K-culture hub, 262.7 billion won will be allocated to create 11 high-quality experiential and exhibition global promotion centers. For convergence support linking content and beauty with the Korean Wave, 32.7 billion won will be invested.

To boost K-tourism, food, and beauty industries, the government has earmarked 3.2 trillion won. In the tourism sector, a new 'K-Tourism Pass' will be introduced, integrating transportation and admission fees. A total of 2.8 billion won will be invested to offer about a 20% discount on a five-day pass to 40,000 foreign tourists. In the beauty sector, a 22.5 billion won integrated program for global expansion, including consulting and marketing, will be launched.

Deputy Prime Minister and Minister of Economy and Finance Koo Yooncheol stated, "Building on the success of 'K-Pop Demon Hunters,' which is based on our culture, we will actively promote the global expansion of K-culture." He also announced, "We will comprehensively support flagship stores, distribution networks, and consulting to ensure K-food and beauty expand worldwide."