'Like US, Korea should provide subsidies to only locally-produced EVs': KAMA

Hyundai Motor IONIQ 6 / Courtesy of Hyundai Motor Group

By Kim Hyun-bin

The domestic automobile industry has requested that the government limit foreign automobiles from being included in the planned supply of 4.5 million eco-friendly vehicles ― including electric vehicles (EV) and hydrogen cars ― in the country to foster domestic production.

The purpose is to foster the domestic EV ecosystem while major domestic automakers are moving their production bases abroad due to the requirements stipulated in U.S. Inflation Reduction Act (IRA).

The Korea Automobile Manufacturers Association (KAMA) held a meeting at its headquarters in Seoul and discussed the 2030 National Greenhouse Gas Nationally Determined Contribution (NDC) implementation roadmap, which aims to strengthen the competitiveness of the domestic automobile industry.

During this month, the government will announce a detailed implementation roadmap for NDC, which includes a plan to supply a total of 8.5 million eco-friendly vehicles, including 3.62 million EVs, 880,000 hydrogen vehicles and 4 million hybrid vehicles.

“The domestic EV production base is greatly shrinking due to the expansion of protectionist trade policies in countries such as the U.S., which has implemented the IRA.” KAMA Chairman Kang Nam-hoon said. The NDC goal of 2030 is the golden time for the automobile industry to transform into future cars. (This decision) will determine whether or not to maintain the future car production base in Korea after 2030.”

Participants compared the tax credit rates for EV investment in the U.S. and Korea and requested the Korean government to expand support and the need for a groundbreaking investment support plan that surpasses the U.S.

"The U.S. is supporting the establishment of an ecosystem for the future of the car industry in the country by providing tax credits of up to 30 percent for investments in EVs through the IRA. In Korea, the tax credit for investments in EV production facilities is only 1 percent,” Kang added. "It is possible to achieve NDC while maintaining industrial competitiveness only when domestic EV production can be promoted."