Chinese EVs that bypassed 45% EU tariffs now face a new alternative to South Korea's 8% tariff: 'Domestic Production Tax Credit'

*This content was translated by AI.

The National Assembly Mobility Forum, a research group of National Assembly members, held its second seminar of 2026 on the 18th in Conference Room 8 of the National Assembly Building, focusing on "Strengthening the Competitiveness of South Korea's Domestic Electric Vehicle Industry," and thoroughly reviewed comprehensive measures to protect the domestic automotive industry ecosystem.

Recently, the global electric vehicle market is rapidly shifting from competition between individual companies to a national industrial rivalry, as local firms backed by full-scale support from the Chinese government accelerate their overseas expansion based on low-price offensives. While major countries implement strong industrial protection measures—such as the United States imposing tariffs of up to 127.5% on Chinese-made electric vehicles, the European Union (EU) levying tariffs of up to 45.3%, and Japan strengthening support for domestic production linkages—South Korea currently lacks effective countermeasures beyond its 8% basic tariff, leaving its domestic production base under threat.

In this crisis where domestic automotive production bases and parts demand are exposed without defense against low-price offensives from Chinese products, the need to introduce a "Domestic Production Tax Credit" has emerged as a key defensive tool to directly support domestic vehicle production and parts demand while safeguarding employment and regional economies. Recently, the Minister of Economy and Finance nominee expressed an intention to gather opinions from relevant industries, raising expectations for the introduction of the system. Forum co-chairs Yoon Hu-deok and Yoon Han-hong (Rep.) agreed to actively push for supportive legislation and regulatory improvements covering not only tax credits for domestic production of electric vehicles but also technology development, supply chains, and charging infrastructure. Park Jung-kyu, President of the Korea Automotive Mobility Industry Association, also emphasized that government support and investment are essential since efforts by companies alone have limits.

Co-hosted by the Korea Automotive Mobility Industry Association and the Korea Mobility Society, this event was organized to reflect on-the-ground voices through legislation and policies that support corporate technological innovation and investment, enabling the future mobility industry to establish itself as a new growth engine. Following keynote presentations by KAIST Professor Park Jeong-kyu and Executive Vice President Yoon Kyung-seon of the association, numerous government officials from the Ministry of Economy and Finance, Ministry of Trade, Industry and Energy, and Ministry of Land, Infrastructure and Transport, along with major experts, attended in large numbers to deeply discuss effective legislative and institutional improvement tasks.

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*This content was translated by AI.