Significantly cut government subsidies
Subsidy cut-off is expected to rise and the amount per unit to decrease
For electric vehicles over 55 million won, the standard subsidy will be cut in half
The government subsidy has been reduced from the maximum of 8 million won per unit to 6 million won.
Local governments are also reducing… Daejeon, reduced from 7 million won to 5 million won
Electric vehicle prices are expected to rise significantly next year. This is because the government is considering a plan to significantly reduce electric vehicle subsidies.
According to the industry on the 26th, the government set the target of new electric vehicles (including hydrogen cars) to 236,000 units in the budget for next year, more than double the 116,000 units this year. The subsidy budget (including chargers) has been raised from 1.6 trillion won this year to 2.8 trillion won next year.
However, the subsidy per electric vehicle is expected to decrease significantly from this year. First, the subsidy cut-off is high. The government paid 100% of the standard subsidy for electric vehicles under 60 million won this year. A 50% subsidy was provided for those who received more than 60 million won and less than 90 million won. There was no subsidy for more than 90,000 won.
Next year, it is considering a 100% standard subsidy for electric vehicles with less than 55 million won. For electric vehicles priced between 55 million and 60 million won, this means that the subsidy will be cut in half compared to this year. The non-subsidy provision for electric vehicles over 90 million won is expected to remain.
Subsidies per electric vehicle are also expected to decrease. The subsidy consists of national and local funds, and this year’s government subsidy amounted to a maximum of 8 million won depending on the performance of each vehicle type. The maximum amount of subsidies for local expenses differed by local government, such as Seoul 2 million won, Busan/Daegu 4.5 million won, Incheon 4.8 million won, Gwangju 5 million won, and Daejeon 7 million won. For car models with poor performance, the government subsidy is reduced, and the local subsidy is also reduced accordingly.
The government is first considering reducing the subsidy from the maximum of 8 million won per unit to 6 million won. The same goes for local governments. Daejeon plans to lower it from the maximum of 7 million won to 5 million won. Gwangju will be reduced from 5 million won to 4 million won, and Incheon will be reduced from 4.8 million won to 3.6 million won. Busan and Daegu plan to reduce the price from 4.5 million won to 4 million won.
However, Seoul will keep it at 2 million won, the same as this year. Seoul has already lowered the subsidy from 4 million won in the first half of this year to 2 million won in the second half of this year.
If you buy an electric car in Daejeon next year, you will have to purchase the same car up to 4 million won more expensive than this year. If the base price is 49.8 million won, the Ioniq 5 (long-range 2WD exclusive) could be purchased for 34.8 million won with subsidies this year, but it will be 38.8 million won next year.
If the basic price of an electric vehicle is between 55 million won and 60 million won, the increase is even greater. Tesla Model 3 (AWD long range, 59.9 million won) is a representative example.
Automakers are contemplating lowering vehicle prices in line with the change in electric vehicle subsidy policy next year. An industry official said, “We are considering ways to lower the burden on consumers as we have to meet our EV sales target.”
Correspondent Il-gyu Kim [email protected]
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