South Korea to increase e-mobility subsidy budget for 2020

08 January 2020

South Korean Government is planning to allocate KRW950 billion (USD821 million) towards electromobility activities in South Korea, which is a growth of 54% as compared to allocation in 2019, Yonhap News Agency reported on 3 January, citing Ministry of Trade, Industry and Energy. The amount will be used to provide subsidies for buying eco-friendly vehicles and for setting more charging stations across the country. The government will additionally spend KRW204 billion to support research and development (R&D) by local companies.

Significance: Last month, it was also reported that public sector organizations of South Korea have ramped up the purchasing of environmentally-friendly vehicles in 2019. During 2019, nearly 70% of cars that were purchased by public organizations were eco-friendly, according to a survey conducted in 211 institutions by the South Korean Ministry of Trade, Industry and Energy (MOTIE). According to the report, exports of eco-friendly cars from South Korea, including electric and hybrid models, reached 249,000 units in 2019, which is a growth of 25% year-on-year (y/y).

There has been a strong focus of the government on hydrogen-powered fuel cell vehicles. Last year, the government said that it was aiming to increase production of hydrogen-powered fuel-cell electric vehicles (FCEV) in the country to 6.2 million units by 2040, up from just 2,000 FCEVs in 2018. Of these, 2.9 million will be for domestic use and 3.3 million units for export. By 2025, production is expected to touch 100,000 hydrogen vehicles.