(By Observer Network, Zhang Jiadong, Editor: Gao Xin)

According to Reuters on November 14, the South Korean government said that as part of a comprehensive policy to help the domestic automotive industry cope with the risk of U.S. tariffs, it will increase the total amount of electric vehicle subsidies by 20% in 2026.

Reuters

According to a statement from the South Korean government, to stimulate domestic demand, passenger electric vehicle subsidies will increase from the current 780 billion KRW (about 3.79 billion RMB) to 936 billion KRW (about 4.56 billion RMB) by 2026. At the same time, pure electric, hybrid and hydrogen fuel cell vehicles will enjoy tax exemptions on consumption tax and purchase tax.

This plan will also include support for automotive parts suppliers, with the government pledging a level of policy financing higher than the 1.5 trillion KRW (about 73 billion RMB) provided in 2025.

South Korea will also strengthen its guarantee program for automotive parts manufacturers operating overseas (such as in the United States and Mexico), providing long-term low-interest loans.

In addition, the South Korean government will establish a new fund of 5 billion KRW (about 240 million RMB) and use an existing fund of 150 trillion KRW (about 730 billion RMB) to invest in next-generation automotive technology, aiming to achieve full localization production of autonomous vehicles by 2028.

In 2024, the export value of the South Korean automotive industry totaled 70.8 billion USD (about 502.39 billion RMB), accounting for more than 10% of its total exports. Currently, the Hyundai Motor Group (including Hyundai and Kia) remains the third-largest automobile manufacturing group in the world, while the United States is its largest overseas market.

According to statistics, Hyundai's revenue in the U.S. market accounts for about 40% of its total revenue. However, since the Trump administration announced additional tariffs on automobiles this year, South Korean automakers have been under a 25% tariff on exports to the U.S. for a long time.

Moreover, unlike the relatively smooth progress in tariff negotiations between the U.S. and Japan, it was only last month that the U.S. agreed to reduce the tariff on South Korean imported cars to 15%. However, both sides have not yet released any written agreement detailing the trade and security-related agreements reached last month.

Additionally, the South Korean government claims that the effective date of the tariff reduction will be retroactive to the finalization of the agreement, and after the submission of the 3.5 trillion USD (about 2.4 trillion RMB) investment bill to the U.S. to Congress, this means that Hyundai will still need to continue trading with the U.S. under the pressure of a 25% tariff in the near future.

As part of the conditions for the U.S. to lower car tariffs, South Korea will also remove the import limit of 50,000 U.S.-made vehicles, allowing these vehicles to enter South Korea without further modifications.

This article is an exclusive work of Observer Network. Reproduction without permission is prohibited.

Original: https://www.toutiao.com/article/7572506341727404584/

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