Republic of Korea

Major Developments in 2022

The Korean Ministry of Environment has been actively promoting subsidy policies over recent years and has laid the foundation for the popularization of electric vehicles (more than 70% of the annual number of electric vehicles sold are public and popular vehicles with a price of less than 417 thousand dollars), such as distributing 402,000 cumulative electric vehicles. In addition, subsidies were paid differentially according to performance, leading to the development and spread of electric vehicles (400km driving distance per charge) with excellent performance in a short period of time. With the increase in the supply of electric vehicles, expectations for not only vehicle performance but also safety and usage conditions have increased, and various roles, other than supporting the purchase of electric vehicles, are required from subsidies. In particular, it is necessary to go beyond strengthening differentiated subsidies according to performance of electric vehicles, towards providing subsidies for innovation in related core technologies such as battery technology.  

Outlook

In the transportation sector, the South Korean government has set a target of supplying 4.5 million electric vehicles by 2030, accelerating the transition to clean vehicles through the expansion of hydrogen and electric vehicles, expansion of charging infrastructure, and promotion of the scrapping of internal combustion engine vehicles. The government also plans to enhance support to increase the global market share of clean vehicles and raise Korea's market share from 5% (currently the 6th in the world) to 12% by 2030, by providing bold support for production, technology, demand, and other aspects of the ecosystem. To achieve this, the government will promote close support for land and related infrastructure, as well as easing regulations to ensure that more than about $72 billion USD of production investment plans can be implemented smoothly from this year until 2026. To alleviate the inconvenience of using electric vehicles and other clean vehicles, the government plans to expand electric vehicle charging facilities to 500,000 units by 2025 and hydrogen charging stations to 450 by 2025.