"Some Local Governments Exhaust EV Subsidies, Policy Supplementation Such as Extra Budgets Needed"

KAMA Releases Report on "Trends in Major Countries' EV Subsidy Policy Changes"

Sales Plummet after Subsidy Cuts, Major Countries Implement "Subsidy U-Turn" Policies

Korea Sees 167% Surge in EV Sales This Year Thanks to Expanded Subsidies

The Korea Automobile & Mobility Association (KAMA) announced on the 29th that it has published a report titled "Trends and Implications of Changes in Major Countries' Electric Vehicle Subsidy Policies for 2026," stating that changes in electric vehicle (EV) subsidy policies in major countries are having a significant impact on EV demand and market growth.

Through the report, KAMA analyzed that although the global EV market showed signs of slowing growth until 2024, it returned to an upward trend in 2025. The main reason for this turnaround is that governments in major countries have strengthened policy support by expanding or reintroducing subsidy policies to boost EV demand.

In fact, major countries have observed cases of slowing EV sales following the discontinuation of subsidies. In response, governments have taken various measures to supplement their policies, such as reintroducing subsidies or expanding tax incentives.

Furthermore, it was found that even in countries where EV adoption has surpassed a certain level, policies focusing on tax benefits and operational stage incentives are still being maintained. On the other hand, in the United States, after EV subsidies provided through the IRA were discontinued at the end of September last year, the country recorded the lowest growth rate among major countries, at only 1%.

In the case of Korea, the government maintained the EV purchase subsidy at last year's level for 2026, while newly introducing a transition support fund of up to KRW 1 million, resulting in the actual EV purchase support amount increasing compared to the previous year. Thanks to the effectiveness of these policies, domestic EV sales in January and February 2026 reached 41,000 units, representing a 167% increase compared to the same period last year and marking a strong growth trend.

However, due to excessive demand, some local governments have already exhausted their subsidy budgets. KAMA emphasized the urgent need for policy supplementation, such as securing additional supplementary budgets by local governments, to ensure that increased demand leads to actual EV adoption. In particular, as demand for livelihood-focused electric trucks is concentrated, the rate at which subsidies are depleted is much faster than for passenger EVs, making additional subsidy allocation urgent.

KAMA President Jeong Daejin stated, "Looking at major countries, support policies such as subsidies and tax incentives play an important role in expanding EV demand and market growth. In particular, to achieve the government's cumulative EV adoption target of 4.2 million units by 2030, it is necessary not only to maintain subsidies but also to implement extraordinary policies to stimulate demand."

President Jeong emphasized, "To maintain the competitiveness of Korea's EV industry amid global supply chain restructuring, both demand support and production base support are necessary. While the current EV purchase subsidies are effective for expanding demand, it is important to supplement them with domestic production promotion tax policies, similar to the EU's Industrial Acceleration Act or Japan's production tax credits, to strengthen the domestic production base."

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