Wedoany.com Report-Nov. 14, South Korea’s government said on Friday that it will raise subsidies for electric vehicles by 20% next year as part of a support package designed to help the country’s auto industry manage risks linked to U.S. tariff measures. According to the government’s announcement, passenger EV subsidies will increase to 936 billion won ($658.47 million) in 2026, compared with 780 billion won this year, with the goal of strengthening domestic demand for electric vehicles.

A Hyundai Ioniq 5 electric vehicle is charged at Chaevi Stay Charging Station in Seoul, South Korea, October 18, 2023.

The package also includes measures to assist auto parts suppliers. The government said it plans to provide policy finance at levels exceeding the 15 trillion won offered in 2025. In addition, South Korea will expand guarantee programmes for parts makers operating in overseas markets, including the United States and Mexico, offering long-term loans at low interest rates to improve their financial stability.

South Korea’s auto industry exported goods worth $70.8 billion in 2024, representing more than 10% of the country’s total exports of $683.8 billion. Hyundai Motor, together with its affiliate Kia Corp, forms the world’s third-largest automaking group by sales. Hyundai’s exports to the United States had been subject to a 25% tariff, affecting its largest overseas market, which accounts for about 40% of the company’s revenue. The tariff rate was reduced to 15% after a trade agreement between Washington and Seoul last month.

However, the adjusted 15% rate has not yet been applied to vehicles and parts produced by South Korean companies. Both countries are still in the process of preparing a joint fact sheet that would formalize the trade and security elements agreed last month. More than two weeks after the announcement by U.S. President Donald Trump and South Korea’s Lee Jae Myung that negotiations had concluded, no written document has been released.

South Korean Foreign Minister Cho Hyun requested U.S. Secretary of State Marco Rubio to support the prompt publication of the joint fact sheet. The request was made during discussions held on the sidelines of a meeting of G7 foreign ministers in Canada, according to a report from Yonhap News Agency on Thursday.

The government’s new subsidy plan and financial support measures reflect its intention to stabilize the auto sector and reinforce competitiveness as global market conditions evolve. South Korea aims to balance strong export performance with continued growth in domestic EV adoption, while assisting local suppliers in managing overseas risks and expanding long-term capabilities.