Korea ups EV subsidy by 1 million won to boost sales

Industry

Korea ups EV subsidy by 1 million won to boost sales

Published: 26 Sep. 2023, 10:42

SARAH CHEA
chea.sarah@joongang.co.kr

EVs are being charged at a charging station in central Seoul on Monday. [YONHAP]

The Environment Ministry is temporarily expanding the maximum electric vehicle subsidy by 1 million won ($746), making it up to 7.8 million won, if manufacturers offer additional discounts, in the latest efforts to boost EV sales in Korea.

Hyundai Motor and Kia are offering up to 4 million won additional discounts to their EVs to qualify for the subsidy, which allows consumers to buy an Ioniq 5 at around 4.8 million won reduced price in total.

The ministry said Tuesday it is offering up to 1 million won in additional subsidies to EVs that cost less than 57 million won, which qualifies for 100 percent of the initial government subsidy, depending on the manufacturers' amount of discounts on the vehicles.

Under the policy, the government offers an additional subsidy of 1 million won for EVs discounted by 5 million won, meaning consumers will pay up to 6 million won less.

Hyundai Motor said it will discount the Ioniq 5 and 6 by 4 million won and the Kona EV by 2 million won. Kia is offering a 3.2 million won discount for its EV6 and 1.2 million won for the Niro EV.

For instance, Seoul residents could buy an Ioinq 5 long-range model, whose original sticker price was 54.1 million won, at 45.5 million won, including subsidies of 6.8 million won from the government and 1.8 million won from the city, totaling 8.6 million won.

With the new policy, they are getting an additional discount of 4 million won for the same car and 800,000 won more in subsidies, meaning they will only have to pay 40.7 million won.

Subsidies from local governments vary by region.

The latest policy comes into effect on Monday. The additional discounts and expanded subsidies only apply to those who either buy the cars or get delivered their cars before Dec. 31.

With the measure, the government hopes to increase EV sales, which have slowed down this year.

A total of 67,654 EVs were newly registered in Korea this year through August, down 5.7 percent during the same period a year earlier.

In August alone, a total of 9,553 EVs were sold, down 34.1 percent on year.

The Korean government initially set its budget to subsidize 13,688 EVs this year. However, only 5,398 EVs received the subsidies as of Monday.

BY SARAH CHEA [chea.sarah@joongang.co.kr]