Electric Vehicle Subsidy Reduction and Extension of Excise Tax Cut... Changes in Vehicle Policies This Year

[Image source=Yonhap News]

[Asia Economy Reporter Yu Je-hoon] From this year, the subsidy scale for electric vehicles will be reduced. In addition, the reduction of the individual consumption tax on automobiles, which was scheduled to end at the end of last year, will be extended for about six months until June.

According to the Korea Automobile Manufacturers Association (KAMA) on the 2nd, the government will extend the 30% reduction of the individual consumption tax on automobiles for six months this year, and also extend the reduction of individual consumption tax and acquisition tax for eco-friendly vehicles.

The acquisition tax reduction for electric and hydrogen electric vehicles (limit of 1.4 million KRW) will be extended for three years until the end of 2024, and the individual consumption tax and acquisition tax for hybrid vehicles (limits of 1 million KRW and 400,000 KRW respectively) will also be extended until the end of this year.

For compact cars, the acquisition tax reduction limit and period will be expanded from 500,000 KRW to 750,000 KRW until the end of 2024, and the individual consumption tax refund on fuel for compact cars will also be extended until the end of 2023, thereby strengthening tax support for compact cars.

In the automotive environmental sector, the electric vehicle subsidy will be reduced to a maximum of 7 million KRW this year, and the upper limit of the vehicle price eligible for the subsidy will also be lowered. For example, the upper limit for receiving the full subsidy will decrease from 60 million KRW last year to 55 million KRW this year. In addition, the discount on electric vehicle charging fees (basic rate 25%, usage fee 10%) will expire and be abolished in July next year.

Furthermore, to expand the supply of electric and hydrogen vehicles, the mandatory purchase ratio of zero-emission vehicles by public institutions will be increased from 80% to 100%, and purchase targets for zero-emission vehicles will also be imposed on large corporations and transportation operators. In addition, after revision work this month, the obligation to establish charging infrastructure is expected to be strengthened.

In the automotive safety sector, installation and operation standards for seat belt warning devices and pedestrian protection standards will be revised, and some rules related to strengthening automobile safety standards will be amended and newly implemented.

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