South Korea’s Environment Minister Kim Sung-hwan said on Wednesday that the government is discussing increasing subsidies for electric vehicle (EV) purchases, after successively trimming them in the past few years.
The Minister revealed it on the National Assembly’s Environment and Labor Comittee, prompted by Democratic Party lawmaker Park Jung, who urged for that higher EV subsidies.
According to local media outlet KBS, Kim said that the government is “coordinating between ministries so that the purchase subsidy and the internal combustion engine (ICE) transition support can be combined to reach about 4 million won [$2,860]” by next year.
This signals an increase from 3 million won (about $2,150), a value that the government reached after gradually reducing subsidies year over year.
Data from Carisyou Data Research showed that EV sales reached 25,148 units in South Korea in July. The figures were 67% up year over year and BEVs had their highest market share ever — at 16.7%.
The purchase of a passenger electric vehicle in 2021 granted the customer a 7 million won ($5,000) aid, which was lowered by 1 million won in 2022 and another million in 2023.
The measure was meant to promote a competitive market. However, lower sales figures and demand for electric vehicles, which are still overall more expensive than petrol cars, led the government to revert its policy.
In early 2025, the Environment Ministry introduced stricter safety standards that electric vehicles must meet in order to qualify for the subsidy — which from then on excluded vehicles that did not provide state-of-charge information to charging stations and manufacturers without product liability insurance.
The measures were introduced in response to consumer concerns about battery safety, following a fire exactly a year ago that destroyed more than 80 vehicles in the underground parking area of an apartment complex.
The fire began in a Mercedes-Benz electric vehicle, and authorities suspected that overcharging had contributed to the incident.
South Korea aims to deploy 4.5 million battery electric vehicles (BEVs) and fuel cell/hydrogen units (FCEVs) by 2030, according to the East Asia Foundation (동아시아재단).
The US International Trade Administration (ITA) wrote last month that South Korea’s “rapidly growing” EV market is “set to reach 20% of total vehicle sales by the end of 2025.”
Sales of Korean-manufactured electric vehicles overseas have shown strong demand in Europe — where Hyundai Group‘s Kia models are ranking in top places.
In July, it was the most registered brand in the Netherlands, with a 12.6% market share, with the Kia EV3 ranking first among electric vehicles, with a 9.1% market share in the segment.
In North America, however, sales are expected to slip with the introduction of Donald Trump’s import tariffs.
Negotiations between the two countries were tardy as South Korea was going through a Presidential Election, with the new President Lee Jaw Myung assuming office on June 4.
After Mexico, South Korea is the largest source of vehicles imported into the US, with data from S&P Global Mobility showing that 1.4 million passenger cars and light trucks entered the country in 2024.
In late July, the United States and South Korea have made a trade agreement, according to which the Trump Administration imposes a 15% tariff on imports coming from the country.
