Seoul: South Korea's industry ministry announced on Wednesday that the government will allocate 1.5 trillion won (US$1.02 billion) in 2025 to encourage consumers to purchase electric vehicles (EVs). This initiative is part of a broader strategy to stimulate domestic demand for EVs, which has been hampered by safety concerns and limited access to charging infrastructure.
According to Yonhap News Agency, the Ministry of Trade, Industry and Energy noted that as of the end of 2024, the total number of EVs and hydrogen fuel cell cars had reached 720,000, with EVs making up 680,000 of this figure. Domestic EV sales saw a decline of 9.7 percent year-on-year to 147,000 in 2024, marking a downturn for the second straight year. The drop in sales has been attributed in part to consumer safety worries following a significant fire involving a Mercedes-Benz EV in August, which resulted in damage to over 100 vehicles and the destruction of an underground apartment parking garage in Incheon, located west of Seoul.
The ministry emphasized the government's commitment to reducing the financial burden on consumers for eco-friendly vehicles while also working to enhance consumer trust. Starting this month, young individuals purchasing an EV as their first car will benefit from an additional 20 percent discount. Families with two children will qualify for a discount of 1 million won (US$685), while those with three or four children will receive discounts of 2 million won and 3 million won, respectively. In addition, South Korea will provide discounts on highway tolls for EVs until 2027.
The government also revealed plans to ensure that EVs constitute at least 10 percent of the vehicles utilized for tests at drivers' license testing centers by the end of 2025. To further support the EV infrastructure, the government will invest 375.8 billion won this year to install 4,400 fast-charging stations nationwide. Additionally, policies will be developed to encourage supermarkets and theaters to install chargers optimized for visits lasting two to three hours.