KAMA needs to develop the domestic EV industry... "More subsidies will lower the ratio of imported cars"

*This content was translated by AI.

On the 9th, the Korea Automobile Mobility Industry Association (Chairman Chung Dae-jin, hereinafter referred to as the 'Affiliation') held the 45th Automobile Mobility Industry Development Forum at the Automobile Hall in Seocho-gu, Seoul under the theme of "The Role of Local Governments to Achieve Electric Vehicle Supply Goals." During the discussion, Heo Se-jin, a senior expert at the Korea Productivity Headquarters, said, "The higher the local cost (local government subsidy) among electric vehicle subsidies, the higher the proportion of electric vehicle sales in domestic vehicles."

Heo's argument came while discussing the role of local government subsidies, which are essential in the purchase process of electric vehicles. In addition, Heo added that lower local government subsidies tend to increase the proportion of purchasing imported electric vehicles.

Heo's analysis is the result of analysis based on aggregate data from 17 cities and provinces by metropolitan city. The average amount of local expenses subsidized for electric vehicles in 2024 is 3.17 million won. At that time, the proportion of domestic and imported electric vehicles was 55.7:44.3. And in 2025, subsidies decreased, and the national average for local expenses was 2,843,000 won, with the overall share unchanged at 55.2:44.8. However, despite the reduction in payments (-326,000 won) in 2025 compared to 2024, the import car market share increased by 0.5%.

Above all, he said that the higher the average local cost by metropolitan city in both 24 and 25, the lower the ratio of imported cars. In particular, last year, the difference in the ratio of imported differences by metropolitan city and province was so high that about 90.7% could be explained by just one factor in the average local ratio, he said. In addition, the per capita income level is also significantly related, but it was not a direct variable as local expenses, he added.

Most of the participants in the seminar shared their will to foster and protect the domestic electric vehicle industry. In particular, Chung Dae-jin, president of the association, said, "The recent direction of subsidy policies in advanced automotive countries such as North America, Europe, and Japan is to protect their own industries.

Among the participants on this day, there was also an opposition to national priority protectionism. One participant said, "The reason Tesla sells well is because of its own product power such as Autopilot," adding, "We oppose the discriminatory structure that protects only domestic cars through subsidies."

Meanwhile, on the 23rd of last month, the Ministry of Climate (Minister Kim Sung-hwan) decided to introduce a 'national expenditure priority and post-settlement method'. It is a system in which state funds are provided first to buyers who cannot buy electric vehicles due to exhaustion of local expenses, and the overpaid state funds are settled with local governments later. In addition, the Ministry of Climate added that it is preparing to announce additional supplies by region in consideration of the rapid trend of subsidy exhaustion compared to previous years.

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*This content was translated by AI.