Korea courts young EV buyers with extra subsidies, toll discounts
Published: 15 Jan. 2025, 18:14
Updated: 15 Jan. 2025, 18:24
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- SARAH CHEA
- [email protected]
Audio report: written by reporters, read by AI
![An EV charging station in downtown Seoul on Sept. 6 [NEWS1]](https://koreajoongangdaily.joins.com/data/photo/2025/01/15/ec1fc44b-0cdb-4e8f-bdeb-7652592b1618.jpg)
An EV charging station in downtown Seoul on Sept. 6 [NEWS1]
If you are 34 or younger and getting an EV as your first car in Korea, you’ll be getting a 20 percent additional subsidy, or up to 1.16 million won ($793) off the payment.
All EV owners will be exempt from individual consumption tax and acquisition tax until 2026 and get a discount on highway toll fees until 2027.
These are just part of a pack of measures announced by the Ministry of Trade, Industry and Energy on Wednesday in a bid to revitalize slumping EV sales, which had declined for two consecutive years despite the growth of the global market.
Under the policies, all buyers aged between 19 and 34 who select an EV for their first car will be given up to 20 percent additional subsidy on top of the maximum 5.8 million won ($3.973) of existing subsidy that goes to all EVs that cost less than 53 million won.
The government also doubled its additional discounts from 20 percent to 40 percent. If a car company offers more than a 5 million won discount to a buyer, the government offers 40 percent of that excess amount as a subsidy.
The individual consumption tax of up to 3 million won will be exempted until 2026, and acquisition tax of up to 1.4 million won will be excluded by 2026.
![Acting President and Minister of Economy and Finance Choi Sang-mok speaks during a ministerial meeting on business tasks at the government complex in central Seoul on Jan. 15. [JOINT PRESS CORPS]](https://koreajoongangdaily.joins.com/data/photo/2025/01/15/9e9e35da-9144-4a4e-873f-e11c808aded2.jpg)
Acting President and Minister of Economy and Finance Choi Sang-mok speaks during a ministerial meeting on business tasks at the government complex in central Seoul on Jan. 15. [JOINT PRESS CORPS]
If a young customer intends to buy a 5.3 million won EV, they will have to pay some 5.6 million won after taxes. However, under the revised policies, they can get a total of 11.8 million won in subsidies or tax exemptions, which makes the payment 44.06 million won. Some will reach the 30 million won range after additional subsidies that vary from regional governments.
The Industry Ministry also vowed to install a total of 4,400 ultrafast EV chargers across the nation within the year.
The measures came as part of efforts to ease the “consumer burden to encourage EV sales” in Korea, the Industry Ministry said. Korea’s EV sales, which reached their peak of 164,000 in 2022, fell to 147,000 last year. Sales of hydrogen-powered cars also more than halved to 4,000 during the cited period.
The government will pour 720 billion won into expanding hydrogen fuel cell vehicles and related infrastructure.
Twenty-five percent of government-run express buses will turn into hydrogen-powered buses by 2030, according to its plan. The number of hydrogen gas stations for commercial vehicles will increase to 119 from the current 56.
“EVs and batteries are the future of the mobility industry; the government will spare no expense for Korea to actively respond to the current slowing down trend and regain its leadership in the rapidly changing global markets,” said Ahn Duk-geun, Minister of Trade, Industry and Energy.
Ahn also pledged 7.9 trillion won of state-backed financing dedicated to the battery industry that is losing ground to Chinese players in the global markets.
The government plans to add more battery and raw material-related technologies as national core technologies to protect them from leakage and strengthen infrastructure in industrial complexes.
The size of a state-run fund dedicated to stabilizing the supply chain will be doubled to 10 trillion won to help 22 battery and related firms diversify their supply chains and secure stable resources.
Acting President and Minister of Economy and Finance Choi Sang-mok also said on Wednesday he would establish a 400 billion won fund within the year intended to aid the biopharmaceuticals industry in discovering drug candidates to successfully develop new drugs.
Choi said the government will also run a program that selects promising biopharmaceutical startups to concentrate support from management to profit expansion.
A national biopharmaceuticals committee will be formed next week to initiate further discussions and strategies, Choi added.
BY SARAH CHEA [[email protected]]
with the Korea JoongAng Daily
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