The government of South Korea has been considering further cutting electric vehicle (EV) subsidies by next year (2025), instead of using the funds to supplement insufficient charging infrastructure, sources said.
As per the sources, the government ministries overseeing electronic vehicle subsidy policy, which includes the finance and environment ministries, are discussing several ways to reduce EV subsidies for next year which is based on state budget guidelines for 2025.
During the discussions, the finance ministry has further stressed the need to strengthen the efficiency of subsidies for electronic vehicles while strengthening the supply of charging infrastructure, Yonhap news agency reported.
A finance ministry official said, "The direction of subsidy policy has been about increasing the number of recipients while reducing the volume of individual support.”
Another official stated, "By reducing the unit price, funds will be saved to be used for expanding charging infrastructure, which is still considered a weak point.
The government has further reduced the budget for the promotion of zero-emission vehicles from 2.56 trillion won ($1.89 billion) in 2023 to 2.31 trillion won this year. Last month, the environment ministry announced the revision to the electric vehicle purchase subsidy plan, reducing the unit subsidy for EVs from the previous maximum of 5 million won to 4 million won.
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Also, with the rise of the semiconductor industry in India, S. Korea will be proactively supporting the industry by accelerating the development of high-bandwidth memory and artificial intelligence chips to achieve the annual export target of USD 120 billion, said Industry Minister Ahn Duk-Geun. The move surfaced at times when India embarked on an ambitious semiconductor journey, with massive investments pouring in. About USD 26 billion worth of investment proposals are currently with the Indian government for semiconductor manufacturing in the country, according to industry sources.
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Inputs from IANS
