Seoul, Jan 15 (Blitz India Busienss) South Korea’s industry ministry said on Wednesday the government will spend 1.5 trillion won ($1.02 billion) this year to induce consumers to purchase electric vehicles (EVs).
The move is aimed at revitalising domestic demand for EVs amid sluggish sales driven by safety concerns and a lack of access to charging stations, according to the Ministry of Trade, Industry and Energy.
The accumulated number of EVs and hydrogen fuel cell cars stood at 720,000 as of end-2024, with EVs accounting for 680,000, reports Yonhap news agency.
Domestic EV sales dropped 9.7 per cent on-year to 147,000 in 2024, marking a decline for the second consecutive year.
Some consumers have expressed concerns about EV safety following a massive fire caused by a Mercedes-Benz EV in August, which damaged over 100 vehicles and destroyed an underground apartment parking garage in Incheon, west of Seoul.
“The government will seek to ease the financial burden on consumers for eco-friendly cars and enhance their trust,” the ministry said.
Starting this month, young people purchasing an EV as their first automobile will receive an additional 20 percent discount.
Families with two children will be eligible for a discount of 1 million won ($685), while those with three or four children will receive discounts of 2 million won and 3 million won, respectively.
South Korea will also offer discounts on highway tolls for EVs through 2027.
The government added it plans to ensure that EVs make up at least 10 percent of vehicles used for testing at drivers’ license testing centres by the end of 2025.
The government will spend 375.8 billion won this year to install 4,400 fast-charging stations across the country, and develop policies to encourage supermarkets and theatres to install chargers optimised for visitors staying two to three hours.