"High-Priced Electric Vehicles like Tesla to Be Excluded from Subsidies or Receive Differential Support Starting Next Year"

Tesla's 'Subsidy Sweep' Phenomenon... Ministry of Environment Prepares Measures
WTO Rules Prohibit Discrimination Between Domestic and Imported Car Subsidies
Setting 'Price' Criteria... Reflected in Next Year's Electric Vehicle Supply Guidelines
"Domestic Cars May Also Be Subject to Limits... Industry and Overseas Cases Under Review"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] The government is actively considering plans to eliminate or differentiate subsidies for high-priced electric vehicles such as Tesla starting next year. However, under World Trade Organization (WTO) regulations, it is not possible to discriminate subsidies between domestic and imported cars. The government is expected to restrict subsidies for electric vehicles above a certain price after comprehensively reviewing the domestic and international automotive industry situations and overseas cases.

On the 11th, Choi Jong-won, Director of Air Environment Policy at the Ministry of Environment, stated, "We will reform the electric vehicle subsidy system and decide on the guidelines for next year's electric vehicle supply project around October to November," adding, "As the supply volume of electric vehicles is increasing, there have been various controversies regarding subsidies for high-priced vehicles, so we plan to announce the guidelines earlier than usual."

The Ministry of Environment plans to completely overhaul the subsidy calculation criteria for electric vehicles and reflect this in next year's guidelines. While changing the support levels by vehicle type, subsidies for high-priced electric vehicles will either not be provided or will be differentiated.

Director Choi explained, "According to WTO regulations, discrimination between domestic and imported cars is not allowed, so 'price' will be the criterion," adding, "The extent to which subsidies will be restricted for vehicles within certain price ranges will be decided after collecting opinions from foreign cases and domestic and international companies. There is currently no set standard price." He added, "In foreign cases, subsidies are either not provided at all or are differentiated for vehicles above a certain price."

According to the Korea Automobile Manufacturers Association, Tesla's passenger car subsidy receipts in the first half of this year are estimated to be around 90 billion won, accounting for 43% of the total electric passenger car subsidies. As the Tesla craze sweeps the domestic electric vehicle market, effectively 'sweeping up' subsidies, the Ministry of Environment is moving to revise the subsidy system.

Asia Economy DB=Photo by Jinhyung Kang aymsdream@

Under WTO regulations, some domestic electric vehicles may also be included in the 'high-priced vehicle' category and become subject to subsidy restrictions. Director Choi responded, "Since various domestic vehicle models are expected to be released next year, there is a possibility that domestic cars will be included in the subsidy restriction targets."

The Ministry of Environment plans to continue discussions with local governments, experts, and associations until October, starting with a meeting of four automobile-related associations in August. They will review recent international electric vehicle trends and comprehensively analyze domestic market conditions and supply status to prepare a plan for reforming the electric vehicle subsidy calculation system.

Meanwhile, within this month, the ministry will announce adjustments to the electric vehicle supply budget for the second half of this year. They are considering converting the existing budget for electric passenger cars and ultra-small cargo vehicles to electric cargo vehicles and buses. The Ministry of Environment held a meeting with 11 automobile manufacturers and sellers yesterday, and on the 20th, it will hold a meeting with city and provincial electric vehicle supply project managers to discuss plans and suggestions for the second half of the year.

Director Choi said, "For the successful achievement of the Green New Deal, it is important to ensure the smooth implementation of electric vehicle supply," adding, "We will listen more closely to voices from the field and work closely with the electric vehicle-related industry and organizations."

This content was produced with the assistance of AI translation services.