Localities face depleted EV subsidies as demand surges from price cuts, rising oil costs

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Localities face depleted EV subsidies as demand surges from price cuts, rising oil costs

Published: 08 Apr. 2026, 18:15 Updated: 08 Apr. 2026, 19:30

Audio report: written by reporters, read by AI

An EV charges inside a residential parking space in Seoul on March 30. [NEWS1]

Subsidies for EVs have been depleted in some localities far faster than expected this year as demand surges due to price cuts by automakers and rising oil prices, according to the Korea Automobile & Mobility Association on Wednesday.

Although applications for local government subsidies only opened in early February, funds for passenger EVs had already run out in 45 of the country’s 160 municipalities, and subsidies for commercial EVs were exhausted in 54 municipalities.

Even in areas where subsidies are still available, funds are close to depletion. Ninety percent of available subsidies for passenger EVs have already been distributed in 60 municipalities, while those for electric trucks have reached that threshold in 67 municipalities.

The rapid exhaustion of funds comes amid a sharp rebound in demand for EVs. Sales reached 83,000 units in the first three months of this year, up 150.9 percent from the same period a year earlier.

Although sales of EVs slowed down in 2023 and 2024, the market began recovering last year, with annual sales rising 50.1 percent to 220,000 units in 2025.

Automobile industry insiders attribute this year’s surge to a combination of aggressive pricing strategies and spiraling energy costs.

Carmakers, including Kia, Volvo and Tesla, have lowered prices, and China’s BYD has intensified competition with low-cost models.

EVs charge in the garage of a shopping mall in Seoul on March 30. [NEWS1]

At the same time, rising global oil prices due to the wartime closure of the Strait of Hormuz, through which Korea imports 70 percent of its petroleum, have made electric vehicles more attractive to consumers.

“As of April 2, subsidy applications had reached 71.3 percent of the allocated volume for passenger EVs, or 65,327 units, and 85.6 percent for commercial EVs, or 15,199 units,” said Kim Kyung-yu, a senior researcher at the Korea Institute for Industrial Economics and Trade. “Additional funding is necessary to ensure that increased demand can translate into actual adoption of EVs.”

Consumer advocates also warned of widening inequality in subsidy support across regions.

“Municipal-level shortages should not create disparities among consumers,” said Lim Ki-sang, the head of a civic group that advocates for better road and automobile regulations. “Supplementary measures are needed so that buyers can receive support without disruption.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KO SUK-HYUN [[email protected]]