The Korean government will temporarily offer more subsidies to customers purchasing electric vehicles (EVs), as part of policy incentives to revive slowing sales of the vehicles here. Details will be shared by relevant authorities early next week, officials said Friday.
The measure is aimed at driving up falling EV sales stemming from rising charging costs and decreasing subsidy benefits. According to data from the Ministry of Environment, EV sales here came in at 9,553 in August, down 34.1 percent from a year ago. This is also a drop of 26 percent from a month earlier.
Finance Minister Choo Kyung-ho recently shared the plans to enable more EV customers to attain subsidies, in a move to resuscitate sluggish demand for EVs.
An official from the finance ministry said details on the scope of the subsidy increase will be shared early next week.
"The finance and environment ministries are fine-tuning details over the temporary subsidy hike, and the result will be made public next week," a spokesman at the finance ministry said.
A spokesperson at the environment ministry also confirmed the government's push to increase the budget for the EV subsidy temporarily. The ministry is the competent authority handling the agenda.
"We cannot share specifics on the move for now, but the government will take the step to spur EV sales here," the official said.
In Korea, those who purchase EVs priced below 85 million won ($63,500) can receive the subsidy. When the price is lower than 57 million won, customers can receive full subsidy support from the government. But those in between the two prices attain only a half subsidy benefit. For instance, customers of EV sedans can receive a subsidy benefit of up to 7 million won.
Earlier, Choo underscored the dire need to drive up EV demand here amid toughening global competition in the industry.
"We are considering taking specific steps to rev up EV demand here, as falling EV sales will affect domestic consumption," he said in a meeting with reporters, Wednesday. "The government-wise support is also needed in that the global competition in the EV market is getting tougher."
Fewer customers turned out to have purchased EVs due to their relatively higher price tags compared to internal combustion engine cars or hybrid vehicles.
Data showed sales of hybrid cars soared to 28,735 last month, up 52.6 percent from the previous year. Hybrid vehicles are widely considered an alternative to EVs for a variety of reasons, including energy efficiency and engine noise suppression.