In the future, there will be no need to obtain the consent of local councils when installing electric vehicle chargers in public parking lots and other areas. New regulations will also be established to enable the introduction of medium-speed chargers in locations suitable for 2 to 3-hour stays, such as large supermarkets and theaters. The government has initiated infrastructure and institutional improvements to support the electric vehicle industry, which has seen a slowdown in growth due to a temporary demand stagnation known as a 'chasm.'
The government will provide 7.9 trillion won in policy financing to battery corporations. Additionally, to strengthen tax credit support for research and development and investments, the government has decided to add technologies related to core minerals for batteries to the national strategic technology scope.
On the 15th, the government held a Cabinet Meeting on National Affairs, the Economic Affairs Cabinet Meeting, and the Cabinet Meeting on Industrial Competitiveness Enhancement to announce the 'Measures to Strengthen Competitiveness of Eco-friendly Vehicles and Batteries'.
A Ministry of Trade, Industry and Energy official noted, 'The growth of eco-friendly vehicles has slowed recently due to the electric vehicle chasm and concerns about fire safety, which also affects the battery-related industries.' He further explained, 'These measures have been jointly prepared by the government to ensure that the eco-friendly vehicle and battery industries can withstand the crisis and secure a leadership position in the global market.'
◇ Focus on 'increasing electric vehicle demand'... Expanding consumer choice and alleviating charging inconveniences
The government announced that it would swiftly promote the restructuring of the electric vehicle subsidy system this year. Previously, on the 2nd, the Ministry of Environment announced measures to induce demand expansion, including an additional 20% subsidy for the first car of young people. Additionally, a support plan was mentioned that would allow automobile corporations to receive more additional subsidies the more discounts they offer themselves.
Specifically, for vehicles with a base price of less than 53 million won, if a corporate discount is applied, a subsidy of 20% will be provided for discount amounts up to 5 million won, and a subsidy of 40% will be provided for discount amounts exceeding 5 million won. For vehicles with a base price of less than 45 million won, a subsidy of 20% will be given for discount amounts up to 2 million won, and a subsidy proportional to 40% will be provided for discount amounts between 2 million and 4 million won for a limited period of 6 months.
In this meeting, new institutional and infrastructure improvement measures were introduced in addition to the previously announced subsidy policies. The government has added a plan to widen the scope of benefits for acquisition taxes and vehicle registration taxes by separating the fuel economy standards for medium and large electric passenger vehicles. Specifically, the existing fuel economy standard for medium and large electric passenger vehicles (3.7 km/kWh or more) will be subdivided into 4.2 km/kWh or more for medium-sized and 3.4 km/kWh or more for large-sized.
Evaluation criteria will also be established to allow driving tests to be conducted in electric vehicles. The government is considering deploying 10% of the test vehicles as electric vehicles this year. Additionally, it plans to distribute 4,400 rapid chargers at bottleneck charging points across the country. To eliminate charging blind spots in areas like apartment complexes and villas that lack parking spaces and charging power capacity, as well as at highway rest areas during peak holiday travel, a mobile charging initiative will also be implemented.
The government also announced measures to improve regulations for more rational installation and usage of chargers. The procedure requiring local council consent for installing chargers in public property, such as public parking lots, will be removed. The charging time for plug-in hybrid electric vehicles (PHEVs) has been reduced from 14 hours to 7 hours.
Plans will be made to promote the installation of medium-speed chargers of 30 to 50 kW in locations suitable for 2 to 3-hour stays, such as large supermarkets and theaters. Currently, charging facilities have only been classified into 'rapid chargers,' capable of charging more than 40 kW within an hour, and 'slow chargers,' which charge below 40 kW in 14 hours. The government plans to revise the eco-friendly vehicle implementation regulations in the first half of the year to establish standards for medium-speed charging facilities.
◇ Funding supplies for the battery industry... Supporting diversification of battery applications
The government also announced measures to assist battery corporations that have experienced financial difficulties due to the chasm. This year, the government plans to inject 7.9 trillion won, which is more than a 30% increase from last year, into policy financing for the battery sector.
Additionally, the government will support the construction of infrastructure such as electricity, wastewater, and roads in the four specialized battery complexes designated last July by allocating 25.2 billion won from the national budget this year. This is an increase of 6 billion won compared to last year's support amount of 19.2 billion won. Specifically, 7.2 billion won will be allocated to Pohang, 3.5 billion won to Ulsan, 3.7 billion won to Cheongju, and 10.8 billion won to Saemangeum.
The government plans to designate core mineral manufacturing and processing technologies for batteries as national strategic technologies, applying preferential tax credit rates for R&D and investment tax credits. The preferential tax credit rate for R&D will be between 30% to 50%, and for investment, it will be between 15% to 35%. A Ministry of Trade, Industry and Energy official explained, 'We plan to add key materials for manufacturing battery cathodes, such as metal compounds, to the list of national strategic technologies.'
In addition to electric vehicles, support for technology development will be strengthened to diversify battery applications. The government will allocate 25.4 billion won for the development of small solid-state lithium polymer battery technology for wearable devices from this year until 2028. Technology development aimed at creating demand for defense, urban air mobility (UAM), and maritime sectors will also begin next year.
Utilizing the supply chain stabilization fund, which has increased from 5 trillion won last year to 10 trillion won this year, the government plans to support the localization and diversification of battery materials and minerals for 22 leading companies in the battery supply chain. In particular, to stabilize the supply of high-risk economic security items, the government's 'Supply Chain Stabilization Support Program' will assist in domestic production, diversification of imports, and stockpiling. A Ministry of Trade, Industry and Energy official explained, 'The import diversification program provides a subsidy policy that compensates for price differences when items imported from countries like China are sourced from other countries.'
◇ Expanding demand for hydrogen vehicles and mass transit buses
The government will also expand the deployment of hydrogen vehicles, another pillar of eco-friendly mobility. Plans are in place to encourage the installation of maintenance centers based on the number of hydrogen buses deployed. Specifically, for one hydrogen bus or more, one maintenance center will be established; for 100 hydrogen buses or more, two maintenance centers; and for 500 hydrogen buses or more, three maintenance centers.
Furthermore, by the end of this month, a special safety inspection will be conducted on all hydrogen charging stations nationwide, and measures for hydrogen safety management will be established. The number of hydrogen charging stations for commercial vehicles located at garages, highway rest areas, and terminals will be expanded from the current 56 to 119 by 2027, and diverse types of charging stations, including mobile charging stations, will be created to enhance charging convenience.
By 2030, the government plans to convert 25% of metropolitan area buses to hydrogen buses and to support cost reduction measures such as increasing hydrogen fuel subsidies and extending natural gas fee reduction measures for hydrogen raw materials.
In addition, the government announced measures to strengthen advanced mobility technology capabilities and counter external uncertainties, such as the inauguration of a new government in the United States. To commercialize driverless level 4 autonomous driving by 2027, a 'Comprehensive Technology Roadmap for Autonomous Driving' will be prepared in the first half of this year. A basic plan to promote the activation of mobility materials, parts, and equipment (commonly known as 소부장) for systematically nurturing the future automotive industry ecosystem is planned to be established within this year.
The government plans to pursue free trade agreement (FTA) negotiations with countries such as Malaysia and Thailand to diversify export markets. Additionally, it aims to ensure that investments in new domestic electric vehicle factories are carried out as planned through a public-private joint 'Investment/Regulatory Relief Support Group.'
Minister of Trade, Industry and Energy An Deok-geun stated, 'Eco-friendly vehicles and batteries are the future of the mobility industry,' adding, 'The government will fully support the eco-friendly vehicle and battery industries to respond to the chasm and global environmental changes, enabling them to lead future markets.'