The maximum passenger car incentives slightly decreased from KRW 7 million (Korean won) (USD 5 400) to KRW 6.8 million (USD 5 300) in 2023, though consumers can benefit from local subsidies as well. For electric LCVs, the incentives per vehicle
Significant fiscal incentives spurred the initial uptake of electric light-duty vehicles (LDVs) and underpinned the scale up in EV manufacturing and battery industries. The measures – primarily purchase subsidies, and/or vehicle purchase and registration tax rebates – were designed to reduce the price gap with conventional vehicles.
Apply new subsidy scheme in line with newly released vehicle models: Electric bus, hydrogen bus, and medium and large electric cargo truck, etc. Apply different subsidy according to EV performance in order to encourage performance improvement: Passenger cars based on the performance of driving range and battery.
Under the updated guidance published in the Federal Register, for a new clean vehicle to be eligible for the whole $7,500 IRA purchase credit and applicable battery manufacturing grant programs, it must not have any battery components manufactured or assembled by a FEOC beginning in 2024 and no critical minerals and their associated materials
Starting this year, the South Korean government will implement varying subsidies for domestically produced electric vehicles and imported electric vehicles. The decision is based on factors such as battery energy density, recycling value, and charging speed.
Significant fiscal incentives spurred the initial uptake of electric light-duty
How many electric cars have you noticed on Korean streets? Not a lot, but probably much more than in 2017. Electric cars in Korea can be easily spotted because of their light-blue license plates (at least the one’s registered since summer 2017). In this article I summarized the progress of electric cars in Korea based on statistics and my third-hand experience because my parents-in-law got an electric car.
Electric cars are still aliens on our streets. Many people still can’t imagine to switch to an electric car and issues like high purchase costs and limited diversity of models hinder a wide uptake.
Globally, there are over 5 million electric cars on the streets, mostly in China, Norway and North America. By 2018 there were a total of 59,600 electric cars on Korean streets. Nearly 34,000 electric vehicles have been sold in 2018 in Korea. It shows a steep increase. The market share of battery-electric and plugin-electric vehicles in Korea is at 2.21%. And there were over 9,000 public chargers in Korea.
All major electric car models (at least the one’s that I’m aware off) are in theory available in Korea but the demand is high and production volumes low. In the case of my parents-in-law they had to wait for 8 months until the vehicle was delivered. The interest in electric cars is very high and the waiting list is long.
It’s impossible to write an article about electric cars without mentioning Tesla. The front-runner on electric cars in North America and many other parts of the world was first seen on Korean streets at the end of 2016. Tesla started to sell the first cars in Korea around middle of 2017. At the beginning Tesla didn’t even qualify for the government incentives because Tesla’s battery needed more time to charge than what the Korean government included in their criteria for electric cars that are allowed to receive incentives. However, the criteria have been adjusted and a Tesla can receive purchase incentives and other benefits as well.
Korea provides a wide range of incentives for electric vehicles:
At first, the purchase incentives sound very amazing but there is an issue with them: There aren’t enough.
Last year the purchase incentives dried up very quickly and it was extended once, as far as I remember (I couldn’t find any sources during my research). The Ministry of Environment (which is in charge of subsidies for zero emission vehicles) supported the purchase of 32,000 zero emission vehicles in 2018 (almost identical to total sales numbers, no surprise). For 2019, it was raised to 57,000 vehicles and thus, we can expect that in this year more electric cars will be sold than in any of the years before.
A major general concern of electric car drivers is that they end up somewhere along the road without power. And a specific issue for Korea is that many people live in apartment complexes with shared parking. So where do they charge their vehicles?
First, let’s discuss the issues of home charging but living in an apartment. It might be possible to find normal electric sockets in a parking garage but it would mean that you are “stealing” the electricity as any electricity used in parking garage are paid by all apartment residents. However, there’s a solution by a company (I know the founder and inventor of this system) that allows you to plug-in an adapter that will keep track of how much energy you used and charge you, not the apartment community with the costs. Here’s a picture of the tech:
I see it as a good solution for Korea’s case. Of course, the plug-in adapter needs to be purchased and I’m not sure if it requires anything else in terms of preparations/installations. It will only allow slow charging which is normal for home-based, private chargers. Unless energy companies start to work together with construction companies and install a large number of electric chargers in apartment parking garages, this will be the only solution for apartment owners who want to charge at home.
Public chargers are more important in Korea than in many other countries (as we saw above). And yes, there exist plenty of public charging stations (fast and slow chargers) in Seoul and along major expressways. There is no issue in finding a public charging spot most of the times and as Korea doesn’t yet have a standard for electric sockets, charging stations provide sockets for all types.
Daegu even provides free charging for all people at their public chargers. It draws electric car owners from the nearby areas to Daegu. People buying a Hyundai Kona receive two years of free charging at public charging points. Imagine that someone would pay two years of gas for buying a new car?! It’s crazy and even though it’s a huge bonus point, I’m not a supporter of such incentives.
In the parking garage of the Lotte World Mall you can find Tesla Superchargers. Just a few Tesla’s superchargers exist in Korea but it’s expanding and more superchargers are being added nationwide.
Let’s take a very general look at the energy costs: According to the environment ministry, the costs of fossil fuel for a 100 km ride are in average 11,480 KRW (they do not specify diesel/gasoline). An electric car uses for 100 km electricity in the value of 4,970 KRW, that’s less than 50%! I find a lot of sources saying that the price per kWh charged at the public charging points is 173.80 KRW (please feel free to calculate the costs for your desired electric car and compare it to a conventional car).
Thus, if you look at total costs of ownership (let’s say 10 years), people with an electric car will save a lot of money in comparison to an owner of a fossil-fuel powered vehicle. Despite the subsidies, the purchase of an electric car is more expensive. However, over the years the costs for energy, expressway usage etc. are lower and very quickly you will see that you spent less money for a private vehicle.
But a major issue for me is that many of these incentives will induce people to drive more than before. A main reason why the global vehicle fleet has to shift to electric vehicles is due to the need to reduce carbon emissions and fossil energy demand. But, as Korea’s power sector still has low levels of renewable energy, the transport sector has to reduce the overall energy demand as well.
As described above, providing free charging and in conclusion free driving isn’t a favorable incentive. More driving will minimize the benefits of electric cars in Korea, which should be less air pollution, less noise and less greenhouse gas emissions.
There are only a few issues with electric cars that I would see as a particular issue for Korea: parking in lots for charging and the complexity of information.
There have been a few situations where a conventional car was parked in the charging spot for electric vehicles. I believe that many people just don’t really think that there will be somebody coming to charge his vehicle. The fine for parking in electric charging spots is 100,000 KRW. This issue might disappear with increasing awareness that electric cars exist.
The more severe issue is that it’s unbelievable complex to acquire any information about electric cars. It’s a bit more difficult than just buying a car because owners need to apply and receive a charging card to use the public charging points. And there are different public charging systems provided by different stakeholders.
As I wrote, my parents-in-law bought an electric car last year. It was the first electric car that the car dealer in their neighborhood had sold and so he didn’t know a lot and was barely a help. We received a lot of information from online communities of electric car owners in Korea.
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